Revolution Invests in Convenient Care
Thursday, October 6, 2005
America Online Inc. co-founder Steve Case and a team of other former chief executives announced yesterday that they are financing medical clinics at retailers such as Wal-Mart and the development of a Web site that will help consumers make doctors' appointments, track hospital bills and even store their medical records.
Their company, Revolution Health Group, did not disclose how much it spent, but the range of investments provides the most detailed glimpse yet of its business strategy. Investors also include former Fannie Mae chief executive Franklin D. Raines, former Hewlett-Packard Co. chief executive Carly Fiorina and Netscape founder James L. Barksdale.
As part of what it called an effort to make health care more convenient, privately held Revolution bought a minority stake in InterFit Health, a Houston firm that provides health screenings and immunizations at retail stores. The investment will underwrite the expansion of RediClinics, mini-clinics in retail stores that are staffed by nurse practitioners. For a fee, they will treat people for "common, non-emergency medical conditions," according to a Revolution news release.
"Today's announcement is just a start, and we have a lot more to do. I view this as a long journey, as AOL was," said Case in an e-mail. "We do believe new products and services, including telehealth and in-home monitoring and diagnostics, can go a long way towards improving quality and reducing costs."
Case has sunk $500 million into Revolution LLC, a holding company that includes Revolution Health Group and has also invested in a luxury resort and providers of "wellness" products such as Pilates videos and yoga mats.
Revolution Health is also seeking to build a virtual one-stop shop where consumers can find health information, locate doctors and manage their health care costs. To that end, Revolution purchased Simo Software Inc., a company that creates software to help people manage health care costs; Wondir Inc., a Bethesda-based search engine firm; and MyDNA Media Inc., an Austin-based provider of online health information.
Revolution Health's goal is to "build the leading online resource for health care," chief executive John Pleasants said in a statement. "With these acquisitions we've got some great pieces . . . but there is still much work to be done."
Other plans for the site include enabling consumers to manage their personal health records online. "That would probably reduce medical error, give patients easier access to expert advice, and eliminate one huge hassle in the system today," Case said in an e-mail.
Revolution also acquired a controlling stake in Extend Benefits Group LLC and ConnectYourCare Inc. Extend Benefits is a Salt Lake City company that helps small businesses and corporations such as Continental Airlines Inc. develop individual health care plans for employees. Timonium, Md.-based ConnectYourCare manages health savings accounts, in which individuals can put away money on a tax-free basis to pay health care costs.
Health care savings accounts are the latest example of "consumer-driven" health care, which typically refers to a type of insurance with a high deductible and some form of tax-free account, said Laura Tollen, a researcher with Kaiser Permanente's Institute for Health Policy. The number of people with such accounts is expected to grow from 2.7 million to 12 million in two years, said Katy Henrickson, a health care analyst for Forrester Research.