Increasing the Pulse of eHealth

eHealth shows signs of regaining its strength – and other alarm-clock news from the land of private venture funding.

Back in 1996, serial entrepreneur Jim Clarke -- fresh from triumphs at Silicon Graphics and Netscape -- launched Healtheon with funding from Kleiner Perkins. By sprinkling Internet fairy dust over the enormous global health-care system -- which, by and large, continues to rely on paper-based filing systems rather than electronic patient records, or even communicating via e-mail and the Web -- it seemed Clark and company would surely make a killing. It didn’t turn out that way. Healtheon, and the numerous other health-care-oriented Internet startups that were launched in the late 1990s, have yet to truly deliver the financial benefits of the marriage between technology and health care. 

That hasn't stopped venture capitalists from looking for the silver bullet, though. Today, a small number of startups are again taking on health care with Internet-based technology solutions. This time, their ambitions are more modest. Israel-based dbMotion, which creates secured virtual patient records by connecting a group of care providers, and without data centralization, recently raised $10.2 million in venture capital led by Gemini Israel Funds.

The company makes patient information accessible to caregivers via the Web, enabling clinical staff to make better care decisions, shorten care cycles, and improve the quality of care. It accomplishes this by installing servers at medical facilities that extract data from existing information systems, translate that data into a standard format, and then serve that data to secure web sites that are custom configured by each health-care facility. So far, it has a fair track record of proving its value. Since its launch in 2001 with Israel’s largest HMO, Clalit Health Services, the company has expanded into Sheba Medical Center in Tel Aviv and Rambam Medical Center in Haifa. With its new round of financing, it is looking to expand beyond Israel.

Meanwhile, here in the United States, Emmeryville, CA-based RelayHealth has developed a messaging platform that enables health-care providers to give non-urgent advice to patients, renew prescriptions, schedule appointments, receive lab results, request referrals, and access self-care information. The group recently raised $7 million from strategic investors Cisco Systems and McKesson. RelayHealth’s system provides better security and the ability to audit, two key components for health-care providers concerned about the integrity of patient information. RelayHealth has prestigious users, including Stanford University and Tufts New England Medical Center. 

RelayHealth isn't alone in this space, though. Startup RMD Networks ("ReachMyDoctor") recently raised its first round of funding: $3 million, led by Sevin Rosen. The company's website, ReachMyDoctor.com, lets patients make appointments, refill medications, obtain referrals, and examine billing and insurance issues. The platform is used by medical staff as a scheduling and patient-management tool. ReachMyDoctor is an online medical record for laboratory results, EKGs, and immunization records; and other important health documents can be posted to a patient's online chart.

Like RelayHealth, RMD represents technological baby steps. But as patients, politicians, and businesses continue to pressure the health-care sector to catch up with the rest of the economy, such companies will be the few with expertise to transform online heath-care communications.