"Internet Developments"

Predict Steady Decline In Fees For Web-Based Lab Information

EVEN THOUGH WEB-BASED LAB TEST ordering and results reporting is in its infancy, the free market already seems to be driving prices down.

Late in 1999, Healtheon/WebMD, Inc. was reportedly signing contracts to provide Web-based information services for fees ranging between 60¢ and 75¢ per patient (for order and test on the same patient).

Aggressive Sales Campaign

Healtheon/WebMD mounted an aggressive sales and marketing campaign to sign up big laboratory companies. It succeeded in getting signed agreements with Laboratory Corporation of America, Inc., DIANON Systems, Inc., and UroCor, Inc. by last December.

Despite this early head start in the marketplace, as of this summer, THE DARK REPORT is unaware of any clinical laboratory using Healtheon/WebMD’s Dx product in a thin client–Web browser accessed mode.

Certainly part of the delay in Healtheon/WebMD getting some of these clients operational has to do with its well-publicized operational problems. The rapid pace of acquisitions has created major challenges at the healthcare e-commerce giant.

But another factor in the delay may be that Healtheon/WebMD’s first laboratory clients are watching the pricing from competing vendors of thin client–Web browser accessed lab info products. They don’t want to go forward until they have comparable deals.

For example, when Centrex Clinical Laboratories installed the Abaton.com product in January, Chief Information Officer Lee Barnard told THE DARK REPORT that the expected cost of thin client–Web browser enabled lab test ordering and results reporting would be less than 40¢ per patient. That is half as expensive as Healtheon/WebMD’s target pricing.

An even newer entrant into the marketplace is LabPortal.com, based in Chantilly, Virginia. It is launching its ASP-based lab information product. It has several different pricing models. For example, one pricing model it uses is based on the lab paying a monthly service fee. The service fee is based on the number of individual physicians who have passwords to access the system for ordering tests and receiving lab results.

Striking Difference

The speed at which the price for thin client solutions for Internet-enabled lab test ordering and results reporting is falling should not surprise lab executives and pathologists. The Internet is a productivity tool which makes the transmission of information both instantaneous and virtually costless.

Further, thin client, ASP-based lab information services is such a radical new way to conduct business that there is probably no way to accurately predict how clinical laboratories will actually use this new tool.

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