"Labs on the Internet"

Healtheon and WebMD Merger Portends Changes to Lab Testing

SO FAR CLINICAL LAB EXECUTIVES have yet to see any profound changes that Internet-based services might cause to existing laboratory practices and procedures.

That situation may change, however, with the merger of Healtheon Corporation of Santa Clara, California and WebMD, Inc. of Atlanta, Georgia. The merger is expected to occur during fourth quarter 1999.

Internet Transactions

Healtheon is a company which is developing the internet as a platform for transactions between all classes of healthcare providers, including payers. It intends to be the “copper wire” which carries information between payers, hospitals, doctors, laboratories, and other providers.

WebMD, on the other hand, is a company which originally set out to be a physicians-based service. It wanted to offer doctors a portal to access services, while providing subscription- paid information resources.

Healtheon signed a contract with SmithKline Beecham Clinical Laboratories (SBCL) in January 1998 to manage its electronic order entry and results reporting functions to high-volume lab clients. This agreement was updated in February 1999.

Automate SBCL’s Reports

The updated agreement is a five-year pact for Healtheon to automate and expand the exchange of information between SBCL clients and SBCL. Effectively, it designates Healtheon to replace in-office teleprinters with Internet-based communications capability.

Therein lies the importance of the Healtheon–WebMD merger for clinical laboratories. Healtheon has been con- necting payers and providers. This year it will process 1 million E-commerce transactions per and 25 million clinical transactions. Meanwhile, in its first ten months of business operations, WebMD has 54,000 physician subscribers. These are fast-growing enterprises.

Healtheon–WebMD wants to eventually reach into every physician transaction. That includes claims processing, patient record access, transcription service, supply orders, and…laboratory orders! Effectively, this means there is an independent company out there working on methods to connect clinical laboratories with physician offices.

SBCL An Earlier Player

Obviously, SBCL got a jump on this project with its Healtheon agreement. THE DARK REPORT would expect that hospital laboratories which use SBCL as a reference lab will get to see, first-hand, how Healtheon handles moving information back and forth between SBCL and its clients.

In the meantime, THE DARK REPORT recommends that laboratory executives and pathologists begin to learn more about Healtheon and WebMD. Not only do these companies have their targets set on changing the way physicians order tests from the lab, but they have huge amounts of capital available to insure that it happens!

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