For Sale: Revolution Health

Why is Steve Case’s online health venture already looking to sell itself, just a year and a half after it launched? Yet another tale of hubris in the e-health sector.


Back in 1999, I left the mental health site I founded — the largest site of its kind at the time — to join drkoop.com to help them build a mental health center. Within 6 months I left, frustrated by the lack of interest in actually publishing independent, world-class health information and the focus on pushing as many ads as possible in front of visitors.

Shortly thereafter, the company imploded as the expectations they sold to advertisers and investors never materialized. One of the cornerstones of their offering, by the way, was a personal electronic health record. Guess how popular that was? (Hint: How many people do you know use the drkoop.com PHR? None, because it no longer exists.)

Drkoop.com was launched with a former Surgeon General of the U.S. From a medical reputation perspective, it doesn’t get any better than that. And it failed — miserably. The only people who made out well in that company are the executives who golden parachuted to financial safety, many of which were actually rewarded for the company’s losses.

Fast forward to 2008. Revolution Health launched to much fanfare in 2007, and in a pre-launch blog entry still on the website, Steve Case wrote:

We aim to build RevolutionHealth.com into the world’s leading health site – and we hope that our focus on an engaging design, high levels of personalization, and an unparalleled sense of community will enable us to achieve that goal. But we’re far more than a web site. We’re a company that’s trying to fundamentally change the health care system. Revolution Health is about making sense of the complicated world of health care. And it’s about putting you-the patient-at the center of that world. [...]

We know health care is complex, and striving to revolutionize the health care system is full of risks. But the team at Revolution Health is up for the challenge. We aren’t expecting overnight success, and we know this will be a hard slog. But we are committed to seeing this through.

So what happened? Why, only a year and half into this grand challenge to change the U.S. healthcare system are they looking for a buyer? Why is every other large online e-health company talking to them about a possible merger? And what happened to their commitment to seeing this through?

I can’t say what happened for certain, since I don’t have any unique insight into the company. But from what I can piece together, it looks like the company suffered from classic startup problems — overbuilding far too quickly for traffic and sales that never materialized. They partnered or bought companies that had little to do with their core mission. They did this just to build their “network” of sites, but had no strategy to monetize them. Why buy other health websites with substantive traffic only to shut them down and not even bother redirecting the traffic lost?

Social networking sites, as another example, have great traffic and page view numbers, but advertisers run screaming from their user-generated content. So the traffic is virtually worthless. All of this looks good on paper, in spreadsheets and on ComScore, but provides little return on value. And does little to put “you — the patient — at the center of that world.”

So Revolution has been cutting corners ever since it launched, according to folks in the trade. Layoffs seem to have occurred with alarming regularity, with the last round closing down their employer business. It’s not clear to me how one can start a revolution in personal health care if one is busy shutting down one’s business divisions and laying off employees every quarter (attributed to their acquisitions, which at least isn’t entirely untrue).

And now this — their putting themselves on the sales block. I guess it was inevitable, since a merged entity of some sort would seem to be better positioned to compete with the WebMD behemoth. But wasn’t this also obvious 2 years ago? I mean, what kind of genius or fool does it take to say, “Sure, we can take on this established, 10-year-old entity in just a year or two’s time on our own!” A harder nut to crack, for sure.

But it must really be disheartening when one’s own medical bloggers start talking behind the scenes about the discontent and unhappiness in the company. Half the company’s medical advisers seem to have little relationship with the company (other than collecting an occasional check), and the other half are a little disconcerted the direction the company seems to be taking.

Which brings me to wondering out loud — who will benefit when Revolution Health merges or is consumed by another company? Will it be its remaining employees, a significant number of which will also be on the chopping block in a merger? Will it be the investors, who’ve already sunk an amazing amount of money into a company doing meager business? Or will it be a handful of executives again — much like in the drkoop.com days — who make out with their own golden parachutes on the consummation of some type of merger? I can’t help but wonder what executives with the company now have $1 million+ bonuses waiting for them on the consummation of a merger, all the while half the remaining staff will get shown the door.

I guess this is the nature of big business, whether it be technology or online health. I just sort of hoped that e-health would be different, especially with Steve Case behind it. That people would really stick to their hopes, dreams and mission, and not let quarterly market pressures determine their destiny.

Good luck, Revolution Health — I hope whatever becomes of you, you find a better fate than the late drkoop.com.

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Comments

7 Responses to “For Sale: Revolution Health”

  1. Thanks for writing this, John. Amid the vast and hairy cosmos of healthcare transformation issues, wised-up patients (or their advocates) need to know the economic realities of what drives the companies and those who create them.

    Also, speaking as another person who’s committed to creating the new world, I hear your frustration at having tried for (at least) a decade to bring it into existence, apparently seeing it all perverted into personal gain schemes. I don’t mind personal gain, but I want it to be aligned with creation of great works.

    Just my opinion as one noisy blogger.

  2. Ouch. Not pretty.

    The problem with Revolution Health, the way I see it, is that they didn’t manage to create an atmosphere that was compelling for patients / visitors to keep coming back. Even less so after reading this.

  3. So, Amy, what makes something compelling?

    Really important question. We’re right here on the frontier, in a sense. What makes the difference in a site that makes it and one that doesn’t?

  4. Susan @ Patient Vanguard says:

    Steve Case’s initial impetus for considering a Web offering like “Revolution Health” was to create a “place” for folks to “visit” and access the health care information, direction, and patient tools they needed to support a successful health care experience . . . one time or multiple times.

    Initially Case was driven by his family’s experiences during the illness and eventual death of his brother from cancer – his brother and his family experienced the same difficult journey throughout the patient experience as do many, feeling helpless, unprepared, and sometimes irrelevant during the process.

    Why not create a Web site, and corresponding e-business to support the needs of patients and their families?

    Well, sadly Revolution Health became just another information-only Health and Wellness Web site with extensive advertising, and a user experience out of the late 1990′s – lots of information, but still very “flat.” Very little information for users to personalize, to make contextual, or to apply to their unique patient experience in a meaningful way.

    As a patient, advocate, family member, caregiver, I want my e-world experience to be more than an information-only experience. I’ll return to a site that continues to educate, while offering information and tools in a way that teaches me how to personalize the information to meet my unique heath care needs, show me how to engage with my providers, to dialog, to advocate for myself, and manage my health successfully.

    Sorry to hear about Revolution Health though – we need more successful efforts in the business of e-patient/consumer education.

  5. Revolution Health unlike DiabetesMine or ACOR never provided what patients and caregivers want.
    Both of our sites provide enlightened self-interest: we help others and in turn, it helps us. Revolution Health, OTOH, was much more driven by greed. You cannot build high quality health resources if greed is your primary motivation.

  6. John Grohol says:

    Well, I wouldn’t say “greed” was their only or even primary motivation (although it may certainly look that way). I honestly believe Revolution thought they could make a significant dent in the U.S. healthcare system in general by putting together an online health portal, online medical record, etc. The biggest faux pas on their part in not being humble enough to understand he didn’t have a clue as to how to do it. And instead of surrounding themselves with talented healthcare folks who could help them figure it out, they went down the classic dot.com startup path and focused on the technology rather than the expertise.

    Look, technology online has its place. But if you’re building a content-specific site (and trying to change an entire industry in the process!), you’d better put the technology on the back burner and really understand the pain points and how your solution is going to address them and fill a need in the marketplace.

    The original concept and idea of Revolution was high-minded. The implementation of that idea was very much a waste of $100 or $150 million in investors’ money, largely for syndicated content on a slick, but virtually useless, platform. They brought almost nothing new to the game and did little to understand the market they were trying to reach (until it was far too late).

  7. Wow – I can’t believe this!

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