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Industry Standard

Health care for the wired and uninsured

October 12, 1999
Web posted at: 10:59 a.m. EDT (1459 GMT)

by Todd Woody

(IDG) -- In the United States, there are more than 44 million people who have no health insurance. It's a problem the public and private sectors have been grappling with for years. Now Healtheon, the online health-care company, thinks it may have a solution: the Internet.

Last week, Healtheon and a little-known partner, Sacramento, Calif.-based Alternative Technology Resources, announced that by spring, consumers will be able to go online and schedule appointments with physicians offering discounted services to uninsured patients.

"If the uninsured have to access the health-care system, they have to pay full retail price. That doesn't make sense," says Steve Curd, Healtheon's COO. "With the Net, we're seeing the ability to create more perfect markets, and there's no reason why that can't be applied to health care."

The project's success in improving access to health care will depend on expanding Internet access to the working poor, who account for the largest group of uninsured and unwired people in the U.S.
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"If [the uninsured] had money for computers and Internet service, they probably would already have health insurance," says Melinda Paras, executive director of Health Access, a San Francisco group that campaigns for affordable health care. "I don't think this is really going to be a solution. But there could be a market for young workers and independent consultants who might find it attractive."

In fact, 30 percent of 18- to 24-year-olds did not have health insurance in 1997, according to the U.S. Census Bureau, while nearly a quarter of 25- to 34-year-olds lacked coverage. The underinsured also represent a potentially large market.

"There is a hugely underserved population out there," says ATR CEO James Cameron Jr. "Those who are the least capable of paying pay the highest."

Besides Net access, consumers will need a credit card to use the service. They'll register on Healtheon's site by paying a small fee probably less than $10, according to Cameron. They will then search for a doctor and fill out an online medical record. Physicians will be notified by e-mail or fax that they have a new patient. Cameron expects to negotiate discounts of 15 percent to 50 percent.

Santa Clara, Calif.-based Healtheon and ATR hope to lure physicians squeezed by health-maintenance organizations. HMOs typically pay doctors a small monthly fee per patient, regardless of the cost of medical treatment. A steady flow of cash-bearing patients could help doctors' bottom lines.

Says Kevin Sullivan, an administrator for a San Francisco medical practice: "The advantage is that we would be able to get cash up front and avoid the overhead associated with billing."

The immediate challenge for ATR will be to make good on its promise to sign up more than 300,000 physicians and other providers, nearly half of the nation's caregivers. Cameron says the company will announce its first agreements this month.

ATR has a tumultuous history. Previously called 3Net Systems, it began in 1989 as a developer of laboratory computer systems. When that effort failed, 3Net launched a new business recruiting overseas computer programmers, mainly from the former Soviet Union.

The struggling company earlier had lost its Nasdaq listing and at one point was trading for less than a penny a share in the over-the-counter market. In late August, the company's board installed Cameron, ATR's longtime majority investor, as CEO. In the 1980s, Cameron ran Occupational Urgent Care Health Systems, or OUCH, a company that created a health-care network providing discounted medical care to workers' compensation patients. He reportedly made about $50 million when he sold OUCH in 1992. Cameron says most of ATR's $6.2 million debt is owed to him and that he'll raise new capital for the medical venture.

Health Access' Paras expects to see similar efforts online and off as dissatisfaction with managed care grows: "I think everyone is going to be looking for ways the middleman can be cut out."

Bradley unveils $65 billion plan for universal health care
September 28, 1999
GOP proposes health care legislation for nation's uninsured
September 28, 1999

Health Insurance on the Web
(The Industry Standard)
Blue Shield pilots online policy sales
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Ruling may give temps new rights
Your benefits: Going beyond just an insurance plan
(NetworkWorld Fusion)
The Doctor Is Online: Health Care Goes Digital
(The Industry Standard)
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Year 2000 World
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