Disease-Management Firms See Internet as Rx for Growth

Corinne Pyle thought she would have to give up her golfing, gardening and active social life after congestive heart failure sent her to a hospital two years ago.

But the 95-year-old Laguna Woods resident is back to her firecracker self, keeping her condition in check by calling in her weight and blood pressure results weekly to LifeMasters Supported SelfCare Inc., a Newport Beach company that monitors her condition.

Some 3,000 miles away in Massachusetts, Al LaChance keeps his diabetes under control by checking his blood glucose levels. Instead of using the phone, he ships the information to LifeMasters by visiting the company’s Web site.

“With the Internet, every time I log in I see my 30-day chart,� he said. “Before, I was on again, off again� in checking vital signs.

Both Pyle and LaChance are success stories for companies such as LifeMasters that help patients manage their chronic illnesses.

Pyle is typical of the driving force behind such disease-management companies: Monitoring such patients saves trips to hospitals and makes the health-care system less costly. LaChance’s zeal for the Internet denotes the promise of growth for the small industry. As a communications tool, a Web site helps keep both the chronically ill and their doctors well-informed.

LifeMasters is one of dozens of companies offering health-monitoring services over the Internet to parlay their electronic strategy into a more efficient system that health insurers and physicians will want to use.

Some companies, such as LifeMasters, have a Web site where patients can type in their vital signs, follow their progress through personalized health charts and chat with nurses online. Others, such as Health Hero Network Inc. and LifeChart.com Inc., both based in Mountain View, Calif., also provide patients with gadgets such as asthma meters that plug into telephone lines and automatically upload measurements onto the companies’ Web sites.

However it is used, the Internet is helping bring the disease-management industry into modern times and attract a much-needed infusion of attention from investors, consumers and the health-care community.

“You see excitement picking up,� said Daphne Psacharopoulos, a consultant with Boston Consulting Group who did an analysis of the industry in late 1999. “The Internet could create tremendous opportunities.�

With chronic-disease patients accounting for about 70% of the $1 trillion spent annually on health care, insurers will increasingly turn to disease managers to control costs and improve care, a recent Credit Suisse First Boston study concluded.

While disease-management companies took in only $291 million last year, experts expect the amount to climb to more than $1 billion within five years as the Internet helps spur the industry.

Investors also find the appeal of the Net alluring. J.P. Morgan Capital and other investors recently put $14 million into Accordant Health Services Inc. in Greensboro, N.C., which set up a Web site to help patients monitor such devastating illnesses as lupus or Parkinson’s.

Intel Corp. invested an undisclosed amount in LifeMasters after the company went online. Intel also agreed to supply some of the company’s patients with home computers, and LifeMasters picked up three rounds of private funding.

$10 Million Revenue Expected This Year

Going online also has helped attract new business. At LifeMasters, for instance, new contracts for monitoring services boosted revenue 300% last year, Chief Executive Christobel E. Selecky said. The company expects more than $10 million in revenue this year, she said.

Companies are banking on customers like LaChance, who said he is constantly on the Internet and prefers to use the Web to record his vital signs. He types in his blood sugar levels three times a day, either from home or work. “It gives me flexibility,� LaChance said of the Web-based program.

The computer and the Internet, as gadgets go, also are powerful tools for keeping patients motivated, said Al Lewis, executive director of the Disease Management Purchasing Consortium, which represents health plans and employers. The novelty of the Net is enticing patients to develop a routine.

LaChance, for instance, likes to check his progress chart, which he can access with a password on a customized Web page. Seeing how his blood levels are changing day by day has helped him realize the importance of diet and taking prescriptions regularly to keep the disease under control, he said.

“If I see a low [value], I think, ‘Have I been eating properly?,’ � he said.

Even Pyle, who knows next to nothing about the Internet, is curious enough about LifeMasters’ Web program that she has signed up for computer lessons.

For now, Pyle keeps her heart condition under control by diligently taking her blood pressure, weight and pulse measurements and sending them to the LifeMasters database by punching in numbers on her touch-tone telephone.

The chronically ill are increasingly seeking information about their health and are becoming better educated about their own diseases. Web sites can provide many of the services of nurses or case managers.

“We use technology to automate nurse work, so they can save time,� Selecky said. “It’s had a dramatic impact on cost.�

If a patient’s blood pressure is high, for example, a warning e-mail will be sent in place of a call from a nurse. Instead of a patient calling to learn about drug interactions, they will obtain that information on a Web site.

“It allows a greater level of connection by all parties involved. The Internet couldn’t be more perfect for that,� Psacharopoulos said.

Patients, for instance, have long found it difficult to remember to measure all sorts of vital signs regularly, keep an eye on daily prescriptions and refrain from the occasional sweet or salty treat.

But the Internet is helping patients comply with those regimens, said Steven K. Schelhammer, Accordant’s chief executive.

A preliminary analysis done by LifeMasters shows that 92% of the patients using the Internet program send in their measurements on time, compared with 80% who are on time using conventional methods.

Internet Not Appropriate for All

But some question whether computers and the Net are well-suited for senior citizens and chronically ill patients--the bulk of enrollees in disease-management programs.

“Those patients may be the least likely to have Internet access,� said Richard Lee, managing director of Internet investment bank WIT Capital.

Only 12% of those 65 and older regularly go online, according to research by Cyber Dialogue Inc. in New York, which follows consumer trends.

Pyle, for instance, is eager to learn about computers, but she enjoys the company newsletters and her weekly telephone chat with a LifeMasters nurse because, she said, it makes her feel as though someone cares.

Such emotional issues are the reason the Internet must complement, not become a substitute for, a traditional disease-management program, Lewis said. The point of disease management, he pointed out, is to use whatever works in order to engage patients. “For some people, it is the Internet; for others, it is the nurse,� he said.

Some industry experts see privacy, rather than access, as the biggest challenge for the industry.

“Will the data be safe? Will employers be able to access it?� wonders Denise Runde of the Institute for the Future, a research firm in San Francisco.

Employees might be wary of any plan by their companies to include disease-management firms as part of their health insurance, Runde said. Their fears could be heightened if they have AIDS, depression or another disease that carries a social stigma, she said.

Even so, the concept of disease management should continue to win favor among health insurers, said Edmund Bujalski, chief executive of Lifemetrix Inc., a disease-management company in Virginia.

“At the end of the day, if you’re a health plan and you want to control quality and cost, you need to address chronic disease,� he said.

And the Internet will make the job a little easier, said Warren Todd, president-elect of the Disease Management Assn. of America.

“We are a young industry,� he said, “and the nice thing is that [with the Internet] we have a second chance to fulfill the original promise of disease management: improved quality of life and lower total cost of care.�

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Keeping Tabs on Patients

Companies that monitor patients’ chronic illnesses are looking to the Internet to help boost the small industry. A look at past and future disease-management industry revenue:

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Source: Disease Management Purchasing Consortium