There is an excellent interview with Revolution Health’s Steve Case in Fortune that sheds light on Case’s ideas, plans, goals, and thinking about health care. His motivations are classically entrepreneurial – personal experience with a sibling wrestling with cancer, a desire to get back into a meaningful work after several years of volunteer work and “shuttling five kids to soccer practice in his Lincoln Navigator”, and the perception that the health care system is broken and he can fix it, and make money doing so.
Loyal readers know I have been less than impressed with Case’s strategy, team, and acquisitions to date. While I admire the audacity, I question the judgment. Take the business plan. According to Fortune;
“John Pleasants, whom Case installed as chief executive of the health group in September, says selling subscriptions to consumers and ad space to companies will be two big revenue streams. But Revolution also hopes to make money by doing everything from reselling health insurance policies offered by other companies to charging consumers for online doctor visits.”
Hmmm. WebMD, MedScape, Aetna, Anthem, and about a hundred other companies are already providing lots of medical and health-related content, mostly for free. And selling ad space too.
There are lots of companies selling insurance policies (we in the industry don’t call it “reselling”, it is actually acting as a “broker”) from your neighborhood agent to Allstate to AARP to UnitedHealthGroup to Blues Plans. Tough competitors too.
On-line doctor visits could theoretically be a revenue stream, if the doctor is a member of a network contracted with the payer, and if there is some mechanism to bill, pay, transfer funds, and adjudicate the “claim” quickly efficiently and accurately. Certainly this can be done, but a very large, Kong-size hurdle will be to convince physicians that they should participate in such a scheme with a tiny player like Revolution. This is theoretically possible, but when Anthem, Pacificare, and other large payers struggle to get docs to use their electronic systems, it makes it difficult to see how Revolution will succeed.
Again, I admire his vision, but the naivete can be breathtaking. For example, Case is quoted as saying “The healthcare system will be fundamentally different. It has to be. It’s not working.”
Steve, it has not been working for decades, and just because it is so obviously broken does not mean it will get fixed any time soon. See Africa’s economies, the Middle East, the World Health Organizations’ efforts on AIDS, polio, and river blindness, drug addiction – all very big problems that are very difficult to solve that have blunted the lances of all who have attempted to date.
Thousands of very smart people with lots of cash have tried to change the health care system (see Bill Clinton), and some are actually starting to have some verifiable success (see Kaiser for their work on electronic medical records, Aetna for educating insureds on procedure costs and premium expenses specific to their conditions). The difference is these change agents enter the fray with a deep and broad understanding of health care, providers, cost drivers and outcomes. They know health care financing and the root causes of health care inflation and patient satisfaction. They have large footprints and strong brands. And resources that make Case’s $250 million look like chump change (Kaiser has already invested several billion dollars in its electronic medical record initiative alone
Dec
21
