Advanced Health Technologies, ProxyMed, WebMD, ePhysician, Data Critical Corp.

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Editor’s Note: There is a major push by many well-funded companies to convert lab test ordering and results reporting onto Web-enabled systems. Here’s a sampling of what some companies are attempting to accomplish.


FOLLOWING A SUMMER OF SQUABBLES with would-be acquirer Bioshield Technologies, AHT Corporation, parent company of Advanced Health Technologies, Inc., filed for protection under a Chapter 11 bankruptcy petition on September 22, 2000.

Advanced Health Technologies (AHT) is well-known in the laboratory industry. It owns the Dr. Chart® product, currently used by a large number of labs. Thus, financial difficulties at AHT could potentially cause disruptions to its laboratory customers.

However, just three days after AHT’s Chapter 11 filing, BioShield Technologies announced that it would purchase the assets of AHT from the bankruptcy court for approximately $15 million. It is providing interim financing of $1.5 million and all creditors are expected to be paid in full.

What is interesting about the BioShield-AHT deal is not its on again-off again aspects (in July, BioShield signed an agreement to acquire AHT, but backed out within weeks). Rather, it is the role AHT might play in BioShield’s grand strategic business plan.

Advanced Health Technologies is working to connect pharmacy and lab data in ways that are useful to clinicians. This includes Web-based lab test ordering and results reporting. For its part, BioShield Technologies is developing, a Web portal intended to offer productivity-enhancing tools to physicians and their staffs.

AHT already has contracts with the nation’s two largest pharmacy benefit managers (PBM) covering 100 million lives. It also holds contracts with at least 60 laboratories, including Laboratory Corporation of America and Mayo Medical Laboratories.

BioShield’s acquisition of AHT, with its lab-based Dr. Chart product, again confirms the importance for all e-health commerce companies to include laboratory testing in their service mix. These companies need the same daily working relationship with doctors that clinical laboratories have already developed with their physician clients.

In a final note on BioShield and its e- health ambitions, the company owns a laboratory operation organized specifically to allow consumers to order laboratory tests via the Internet. Despite the regulatory and legal impediments governing consumer self-ordering of tests, this lab company is actively doing business and learning how to serve consumers with its Web-enabled lab test ordering and results reporting system.


Another e-health company targeting physicians is ProxyMed, Inc., based in Fort Lauderdale, Florida. Earlier this month, ProxyMed announced that Nancy Ham would become its new Chief Operations Officer.

Ham is familiar to clients of THE DARK REPORT. In her former position as General Manager of Institutional & Connectivity Services at WebMD (formerly Healtheon/WebMD), she was interviewed by THE DARK REPORT in November 1999 about Web-based lab test ordering and results reporting.

In January, Ham “retired” from WebMD. Her arrival at ProxyMed can be seen as a sign that ProxyMed has promising technology for creating a physician Web portal that includes features such as lab test ordering and reporting, pharmacy ordering, claims submission, and the like.

Alert readers of THE DARK REPORT will recall another interesting lab industry connection with ProxyMed. Starting in the fall of 1999, its CEO was John B. Oakkerse, Ph.D., the former President of SmithKline Beecham Clinical Laboratories. Oakkerse left ProxyMed earlier this year as part of a major financial re-structuring of the financially-beleaguered company.

For the first nine months of 2000, ProxyMed generated revenues of $22.8 million. It has contracts with 42 laboratories and says 1,100 users have enrolled to use its Web portal. ProxyMed reports that, in the third quarter, it processed 395,000 prescription, laboratory results, and eligibility transactions.


IT WAS ONE YEAR AGO that WebMD Corp. (formerly Healtheon/Web MD) seemed to have an early lead in the race to introduce Web-based laboratory test ordering and results reporting between physicians and laboratories.

But the last 12 months have not been kind to WebMD. Its stock price tanked and Wall Street analysts criticized its rapid-fire series of acquisitions as too much, too fast.

Just two weeks ago, wunderkind executive Jeffrey Arnold resigned as co- CEO. This leaves Martin Wygood, Chairman of Medical Manager, Corp., as the sole CEO of WebMD. He is expected to concentrate on integration and implementation. There are concerns about whether WebMD can succeed in making its acquisitions of Envoy, Medical Manager Corp., CareInsite, Inc., and On Health Co. work together.

When WebMD announces third quarter earnings, pay close attention to its disclosure on the number of healthcare trans- actions (pharmacy orders, lab test orders/results, and claims transactions) that it reports. This is the core business that the Healtheon portion of WebMD was designed to serve. But growth in this business segment has been below the expectations of financial analysts.


TWO COMPANIES TO WATCH IN THE RACE to introduce wireless reporting of lab test results are Data Critical Corporation and ePhysician.

Data Critical Corporation (DCC) signed a contract with Laboratory Corporation of America that allows Data Critical’s client doctors to order lab tests and receive lab test results on its MobileLab system, an unwired product. This is a first step for Data Critical, which wants to add lab test ordering and results reporting to its wireless products as soon as it is practical. It has both wireless and online charting products for physicians.

At ePhysician, there is a new agreement to combine its prescription-writing capability on hand-held computers to the electronic medical record (EMFR) developed by MedPlus Inc. This interconnectivity will enable ePhysician’s wireless lab test ordering and reporting product (now under development) to connect to the EMR as well.


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