Wit Capital's growth predictions very optimistic for different e-Health sectors in 2000

New York 14 March 2000Wit Capital, an on-line investment banking firm, also known for its investment research of institutional calibre on both the Internet industry and Web-based health care and educational companies, recently issued a report on e-Health in the year 2000. The United States electronic health care industry is analysed in its various segments, ranging from connectivity and content to business-to-consumer (B-to-C) and business-to-business (B-to-B) commerce. Wit Capital's research analysts equally have scanned in a bird's eye view the universe beyond these traditional four C's, which they indicate as the next generation of e-Health, addressing items, such as clinical care, telemedicine, drug development, and drug discovery.

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During 1999, Wit Capital has witnessed a growing tendency for convergence and partnering between off-line and on-line companies in every e-Health sector. The industry report depicts 2000 as the year of delivery and thereby warns the first generation of e-Health companies to guarantee a tight execution of fundamentals in order to safeguard sufficient opportunities for the future generations of Internet-based health care commerce and industry. The consumer-focused companies have to concentrate on increasing their traffic and building brands, on improving client retention while at the same time lowering customer acquisition costs. Consumer service and experience should be enhanced and multiple cross-selling chances be chased without any hesitation.

In turn, business-focused companies have to expand their networks of front- and back-end partners while integrating with back-end legacy systems. In this regard, they have to continually strive for utilisation as well as superior service, according to the analysts. In 1999, no less than 20 e-Health Initial Public Offerings (IPO) were performed in the United States which represent a total amount of nearly $1.5 billion. In 2000, this figure is likely to be largely exceeded. In the e-Health content market section, only a few winners will be able to survive and build successful health care portals. The report predicts that these companies will excel in unique programming neatly adapted to the targeted advertisers' interests, in added value for community, commerce and connectivity services, and multiple revenue streams.

The business-to-consumer e-health commerce involves the on-line sale of all types of health, beauty and wellness products, and pharmaceuticals. These companies are substantially spending on marketing and promotions in order to attract new customers and retain existing ones by offering many features including automatic reorder, incentive programmes, personalised shoppers, refill reminders and targeted news feeds. The Wit Capital report figures show that some of these e-Health commerce sites receive over one million unique visitors per month. For the business-to-business commerce, the health care market presents numerous opportunities, given the fact that the efficient use of IT is still lagging behind in this sector.

The e-Health companies are able to fill the existing gap with the provision of Internet-based solutions to rationalise supply-chain costs in the delivery of medical products, and with one-stop purchase offerings of health insurance services. The report stresses the importance of being an early mover with an excellent competence in the health care domain and interested in generating enduring relationships with buyers and suppliers. Another vital aspect of e-Health are the so-called connectivity applications. The Wit Capital analysts consider those companies with the capacity to build an early critical mass, to develop integration strategies with Physician Practice Management vendors, focus on the administrative staff, deploy regional roll-out techniques, and to emphasise on services and support as potential winners.

Other phenomena which will probably play a crucial role in Internet-based health care delivery are the rising popularity of mobile computing solutions to complement existing PC-solutions; the emergence of Application Service Providers, allowing health care organisations to outsource complicated IT-related issues; the deployment of database management to eventually match claims data with clinical information; a gradual transition by the traditional Health Information Technology companies to Web-enabled applications; and the Health Insurance Portability and Accountability Act (HIPAA) coming into full force. All these factors will have an enhancing effect upon the e-Health break-through.

The authors of the Wit Capital report strongly believe that the Internet will be the initiator of a promising evolution in patient-centric disease management to reduce the overall costs in the health care sector. The focus lies on disease prevention by transforming e-literate health care consumers into responsible watchers over their own health. The Internet has also the potential to trigger off e-solutions for a more efficient and shorter drugs development cycle and to support applications in data communication to promote gene discovery. A last field of growth in e-Health cited by the research analysts is telemedicine. In recent years, remote clinical care has become more affordable because of a wider availability of broadband technology; an increased financial support from the United States government; and optimised telecommunication tools.

Wit Capital has made available on the Internet, the full report, provided with valuable information in a wealth of tables and charts. Please, have a look at e-Health 2000: Health care and the Internet in the New Millennium.


Leslie Versweyveld

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