I’ve been keeping my eye on Revolution Health since its founding earlier this year, and the item posted last week about Kaiser’s work on electronic health records reminded me to check back on Revolution’s progress. Why the focus on Revolution? There are other consumer-directed health plan firms out there, why them specifically?
First, they seem to have the cash. Steve Case’s investment firm, Revolution, has a half billion dollars to invest. It’s very important to understand that not all of this will go to Revolution Health; to date. Of note, Revolution has also invested in two “lifestyle resort firms”, the car-sharing service FlexCar, and other firms in the “life in balance” space.
Second, they have the attention of the media and investment community.
Where is Revolution Health (RH) today? Revolution is framing their business as focusing on three areas; coverage, content, and care. They have acquired several web-based and other companies that have some level of expertise or experience in each of these areas. As noted here previously, none of them is even close to dominant in their specific space. Notably, there are no components that are specifically health care management, managed care, or provider network management firms or have significant capabilities or experience in these areas.
The company appears to be in the process of merging its acquisitions, building the marketing image and message, and possibly looking for new acquisitions.
The only member of Revolution Health’s operating committee with extensive experience in the health insurance/managed care business is Bryce Williams, who worked at eHealth, the parent company of eHealthInsurance as their head of marketing and business development.
Why the comparison to Kaiser? Kaiser is at the opposite end of the spectrum; a company (Kaiser Permanente is actually two entities; Kaiser owns the facilities and administrative end of things, while all the physicians belong to the Permanente Medical Group; technically KP is a large group practice HMO
Nov
21
Re: “One
Market cap is NOT based on “selling better products than the next guy and making customers better off.”
Your comments reflect an inaccurate view of the way market cap is determined. In many instances market cap is based on what investors think the stick will sell for, not what the company’s actual cash flow and profitability are. Investment firms are much more interested in generating interest in and enthusiasm for their projects than in generating positive financials. Yes, financials are a piece, but they are only a piece of market cap.
While I applaud your view, and wish it were so, the Internet bubble, Google’s present stock value, and many other examples amply demonstrate that market cap is often not directly related to financial and market success.
And KP is a not for profit, which does not care one whit for market cap. It is also pretty succesful, even though it does not have the advantages of the for-profit competitiion.
Re: “Your comments reflect an inaccurate view of the way market cap is determined.”
I was using Wikipedia’s definition of “Market Capitalization.”
http://en.wikipedia.org/wiki/Market_capitalization
It does not mention the role of “bubbles” or unfounded “enthusiasm.” Maybe it’s wrong.