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eHealthcare and Technology Trends - Rick Krohn
 eHealthcare and Technology Trends - Rick Krohn
Mr. Krohn is a seasoned health care business development and management consultant who has guided physicians, health care systems, and HMOs in their transition to manage care. He is the President of HealthSense; a managed health care business development and management-consulting firm located in Guyton, GA. Client engagements have included strategic and business planning, market research, capital acquisition, single and multi-specialty network development, managed care contracting, risk based compensation plan development, operations management, finance, process reengineering, information systems, product development, and managed care business development. Rick has worked extensively with hospital executives, physicians, HMO executives, support staff, and vendors in a wide range of professional orientations, from new venture business planning and execution to physician specialty network development, to provider education, to HMO restructuring, to managed care contracting and risk based product development. During his career, Rick has developed an expertise in providing solutions to managed care issues and challenges faced by hospital executives, physicians, and payors.

Rick has written extensively on a wide range of managed care subjects for publications such as the Group Practice Journal (AMGA), the Medical Group Management Association Journal (MGMA), and Healthcare Financial Management (HFMA). He has also written a guidebook published by the VHA titled Succeeding in Managed Care: Capitation Management (1995), a chapter titled "Organizing and Managing Specialty Networks" in the Aspen book Building and Managing Effective Physician Organizations Under Capitation, (I996), and a chapter titled "Specialty Capitation" in the Faulkner and Gray book, Risk Management for Healthcare Provider Groups 1998 (I997). He has recently completed a book titled Physician Networks: Strategy, Startup, and Operations, published by the American College of Healthcare Executives(1998). Rick currently writes a monthly column on physician networking strategies for the Group Practice Journal. In addition to writing, Rick also speaks to physician and health care executive audiences such as VHA and organization development issues.

Prior to launching his own company, Rick was vice president of Medical Alliances (1994-98), a national health care business development consulting firm. His responsibilities included management of the healthcare business development and management services consulting division, as well as active management of individual consulting engagements. Earlier industry experience was gained in administrative posts at the Bon Secours Health System (I992-94), Johns Hopkins Hospital (I990-91), and Sinai Hospital of Baltimore (I990).

Rick graduated from Towson State University with a degree in Economics and Political Science. He completed additional advanced study at the American University and Johns Hopkins University, earning a Masters degree in International Finance and a Masters in Business Administration, respectively.

Richard Krohn, M.A., M.A.S.
President, HealthSense, Inc.
P.O. Box 116
Guyton, GA 31312

Question 1 - Good Morning Rick and Thank you for hosting this week. What kinds of web based strategies are being deployed in healthcare? by HBInterview on November 6, 2000

Answer 1 - Like every ohter industry trying to capitalize on the Web, healthcare is groping with issues of competitive advantage, ROI, sustainability, infrastructure requirements, etc. Every approach is being tried, including B To B, B to C, and now P to P (peer to peer). There are several main themes however to healthcare and the 'net, including web based marketing/education/communications (vanity websites, patient education, provider emails and forums, ask-a-doc, for example), transaction platforms (online claims submission/eligibility/scheduling, applications service providers "ASP", group purchasing, medical devices, online pharmacies, etc), clinical data collection/interpretation/distribution, and more. The strategies showing promise include direct to consumer marketing, personalized patient web pages, online claims adjudication, and several e-commerce applications. by Rick Krohn on November 6, 2000
Question 2 - What web based healthcare business models are economically rational? by HBInterview on November 6, 2000

Answer 2 - Let's start with what isn't rational - content model websites, provider subscription models, annoying banner ads, user unfriendly sites and applications, stale material. Not surprisingly, the principles of business that apply elsewhere are equally applicable to e-healthcare. Sound business value proposition, great product, quantified market demand, adequate capital, capable management, a sound business plan.....

Content as a business model is dead, ads and subscription revenue bases are suspect, and the debate continues to rage about B to B versus B to C as the preferred vendor positioning. by Rick Krohn on November 6, 2000
Question 3 - Probably the most visible healthcare entity in this field is WebMD. How is their strategy and economic model favoring in this market? Can one organization be all things to all people in this industry? by HBInterview on November 6, 2000

Answer 3 - WebMd is a bellweather for investors in healthcare...Late last year they were trading in the low 60's , today they are in the 10's, so Wall Street is very unsure of their sustainablity. WebMd is a vertical integrator - difficult to blend cultures, operating systems, management teams of lots of diffent companies - not to mention the cash drain. The departure of their founders and some senior managers doesn't inspire confidence, and the announcement of layoffs indicates a retrenchment, so its reasonable to assume they are rethinking their business strategy. If an organization wants to be a "one stop shop" it makes as much sense to ally as to acquire, and to select "best of breed" trading partners. by Rick Krohn on November 6, 2000
Question 4 - How is the web accelerating and broadening the collection, interpretation, and distribution of health care information? by HBInterview on November 7, 2000

Answer 4 - The web is all about access to information - and is removing the physical and systemic barriers that have made health care a chronically cottage industry. Browser technology is the common language that links the disparate systems circulating throughout the healthcare industry - and has enabled the capture, analysis, repackaging, and distribution of health care information on an unprecedented scale. Perhaps equally importantly, the web has erased the insular nature of health care operations, exposing health care professionals to information, ideas, and resources beyond the traditional boundaries of their profession. by Rick Krohn on November 7, 2000
Question 5 - How will this new communication vehicle affect an organization's marketing strategy? Is it important for organization's to use the Internet for their marketing purposes? by HBInterview on November 7, 2000

Answer 5 - The Internet opens a whole new avenue of marketing opportunities that can be applied in a broad based or targeted approach, on a 24/7 basis, at comparatively modest cost. A web presence of some dimension is now essentially mandatory as part of an overall marketing strategy - vendors, and customers increasingly expect it. Its important however, to balance the expected "bounce" to be gained from a web marketing presence to the cost involved - is the organization interested in an online billboard, or providing added value, or steering routine processes through the web? How effective will it be in reaching and impacting the intended audience? The cost benefit equation is critical since web based marketing schemes can mushroom in cost. by Rick Krohn on November 8, 2000
Question 6 - Healthcare has been a very fragmented industry and continues to remain so, will Internet technologies provide an aligned path for better work flow and communications among providers, payers, and consumers? HIPAA has good intentions, but it will be able to accomplish what it is trying? by HBInterview on November 7, 2000

Answer 6 - The Internet promises to erase the systemic, cultural, and physicial barriers that have made healthcare such an insular industry. But the introduction of wide distribution technologies and devices - like medical smart cards, wireless devices, voive recognition, online prescribing, virtual provider networks linked by web based information platforms - are all going to chip away at the traditional barriers among payers, providers , and consumers. The real catalyst of this transformation will be cost efficiency, improved health on a population as well as patient basis, and the acknowledged benefits of collaborating among colleagues, and across the payer/provider divide. by Rick Krohn on November 8, 2000
Question 7 - You mention that sites based on content business models or subscription models will not survive. What steps would you suggest these organizations take to develop a profitable business model? by HBInterview on November 8, 2000

Answer 7 - First healthcare organizations must examine their value propsitions and determine if the economics of their revenue model is suited to a web based platform. Relying on page views or provider subscription fees to support a revenue model is very risky, unless the value proposition is highly customized with few alternatives. At this stage of revenue generation through online healthcare, the transaction models based on commodity sales are the early winners. If the business model doesn't support commodity based revenue, perhaps it can still contribute to revenue generation indirectly by boosting (same store sales) volume, or by generating new customers, and can be regarded as a success (if not a profit center) on that basis. by Rick Krohn on November 8, 2000
Question 8 - How is HIPPA affecting web based strategies in healthcare? Or is it? by HBInterview on November 8, 2000

Answer 8 - HIPAA is a looming concern for any organization or vendor that process patient information. The total cost of HIPAA compliance has been estimated to exceed Y2K, and pending final HIPAA regs many healthcae organizations and vendors have been sitting on their hands before embarking on a project that might have to be revamped shortly after it got underway. Patient privacy is going to be a main concern of any web based enterprise as long as encryption technology is not 100% secure. by Rick Krohn on November 8, 2000
Question 9 How can the web level the playing field of competition in healthcare? by HBInterview on November 9, 2000

Answer 9 - The web can enable smaller organizations with limited budgets appear to be as robust and capable as their larger brethren, to a certain extent. Form a marketing perspective, there is literally a sea of health related websites, and being selected as one to visit is a challenge. For an operations persepctive, the Web fosters alliance that grow a health organizations capabilities without necessarily introducing additional layers of cost, and creates access to information and resources that only a few years ago would have been largely proprietary. Finally, the appearance of robustness is not enough - there must be real substance behind the online marketing pitch and catalogue of services. by Rick Krohn on November 9, 2000
Question 10 - Although the internet has the ability to "level the playing field" do you find smaller physician groups or practices taking advantage of this? If not, why? by HBInterview on November 9, 2000

Answer 10 - Physicians as a group have not capitalized on the market and profrsional leveraging power of the 'net. Culture, technology adverse, and painfully conscious of the liability issues associated with online health care, smaller physician organizations have limited their employment of web technologies to email, research,and product information. The culture will change when it becomes convenient and economically rationa, secure, and when health care consumers demand greater access to their providers. by Rick Krohn on November 9, 2000
Question 11 - Not from the clinical side but instead the business side of healthcare, do you see organizations using these technologies with consumers to better improve the work flow processes. Our current system is consumer surveys. Do you see this area having changing? by HBInterview on November 9, 2000

Answer 11 - Yes the web allows organizations to reach out to consumers on a broadcast basis. Appointment secheduling, elgibility , authorizations, claims adjudication, and interactive processes like ask a doc and patient satisfaction surveys - are all natural applications of Internet based business processes. by Rick Krohn on November 9, 2000

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