On the Net, RX-rated beats X-rated

At least that's the news going around health care circles, although as Wharton health care professor Sean Nicholson notes, "This may be an urban legend." But to worry about attribution is to miss the point: that an increasing number of consumers are going online not just for health care information, but to order health care-related products.

In this case, backup does indeed exist. Nicholson is part of a group of researchers analyzing new data from the Wharton Forum for Electronic Commerce's virtual test market to study two areas: first, patterns of behavior among individuals who use the Internet for health-related purposes, and second, the implications of these patterns for consumers, doctors, pharmaceutical companies and health-related Internet companies, including online drugstores and for-profit content sites.

Preliminary results of the study show that more than three-quarters of the subjects reported using the Internet to search for health information in such areas as diseases, women's health, nutrition, fitness and pharmaceuticals.

In addition, more than one-quarter of Internet users reported purchasing a health care product over the Internet. These products tended to be vitamins and other nutritional supplements rather than prescription drugs.

Online health users were more likely to be women, older, married, Caucasian and college educated, a finding that is consistent with previous studies showing that women play a prominent role in household medical care decisions.

The reasons people gave for using the Internet for health care information were that it is more convenient relative to other sources of health information; more current than non-online sources; more available compared with information from, for example, a physician; and anonymous. Almost half the people said they trust online health information or advice.

As with many studies, this preliminary information tells only half the story. Nicholson and his colleagues are interested in learning, for example, how such heavy Internet usage affects the way doctors treat their patients and the way patients view their doctors; whether quality of health care is affected by Internet usage; and what the study's findings will mean for the business plans of health-related companies and Internet sites.

Nicholson stresses that an in-depth analysis of the data won't be finished until next spring. But already, he notes, patterns have emerged suggesting that significant changes are ahead for key stakeholders in the health care industry.

The patient, the doctor and the Internet
Given the large number of people using the Internet for health information, Nicholson says, the key question becomes, "What does this health information do? Does it create a different kind of consumer? Are consumers making different demands on their doctors? Are these demands greater or less than before? If consumers find out more information about their condition from the Internet, does this mean they will then want to follow up with a visit to the doctor, or will they instead try to treat the condition themselves with over-the-counter drugs?

"If consumers are 'better informed' because of the Internet, will they want more expensive and more elaborate treatments, or will they argue for less invasive, less expensive alternatives? These are the kinds of things we will be studying."

The answers to some of these questions are already available from the data. For example, in the majority of cases, patients who search the Internet for health information arrive at their doctor's office armed with information they have gleaned from the Web.

"What's interesting," Nicholson says, "is the number of times the patient walks away with a lower evaluation of the doctor. Why? Perhaps because he or she doesn't think the doctor is up-to-date. In some cases patients say they are thinking about finding a new physician because of that impression."

All of which is clearly a challenge for doctors, Nicholson adds. "If physicians think to themselves that what their patients read on the Internet simply isn't accurate, this may be absolutely correct. The problem is that if the physician disregards patients' questions without an explanation, some patients might then walk away feeling their doctor doesn't know as much as he or she should."

Nicholson cites another survey that shows 15 percent of physicians give patients directions to a Web site that the physician feels comfortable recommending. "For example, a doctor tells a patient, 'If you want to know more about asthma, this is a good site to use.' I don't think it takes too much effort for doctors to make these kinds of changes in how they treat patients."

Nicholson's team does know from their raw data that in many instances the patients believe their treatment was different because they made reference to Internet information. "Sometimes it's just that the patient engaged the doctor in a conversation they otherwise might not have had, or got the doctor to volunteer information he or she might otherwise not have volunteered."

Which begs the question: Are patients who are "empowered" by information from the Internet in fact getting better treatment? So far, it's unclear, Nicholson says. "Our respondents were split on whether the quantity of health care went up or down. As to the quality, it appears that a surprising number of people felt it went down. I think, however, that they are responding to their perception that their physician isn't up-to-date or that the visit time was shorter, not necessarily that the medical care itself was different. We need to study this one further."

A related question, and one for which data won't be available until next year, is whether people in general are any healthier because they seek health care information on the Internet. In their latest survey, Nicholson's group asked 2000 people 12 questions about their health, based on the SF12, a standard health assessment tool.

"We will be looking first at whether people who use the Internet are healthier or less healthy than the average American, and second, over time, are people who use the Web improving in health relative to others? This is the big question. We want to know the effect of the Internet on medical expenditures, the physician-patient relationship and various types of business models, but fundamentally what we want to know is does the Internet improve people's health--and hopefully at the same time reduce expenditures.

"At this point we don't even have a sense of whether people searching for health information on the Internet are starting out healthier or less healthy than the general population."

As for physicians, how healthy are they? Is their blood pressure rising from the increasing number of patients who enter their offices brandishing printouts from the Internet and demanding instant answers for their ailments? Surveys aren't needed to suggest that the answer is yes.

"If you meet with enough doctors, almost all of them will say they roll their eyes back when they see someone coming in with an Internet printout," Nicholson says. "From our survey we know that patients resent this, but from the doctors' point of view, they are in a bind because they have about seven minutes on average to spend with a patient, and they don't want to waste five of those minutes discussing something of secondary importance."

And what about the request by patients for doctors to communicate with them by email? According to Nicholson, a Harris interactive study shows that very few physicians interact with patients by email, mainly because they say that patients aren't interested.

"I think the doctors are wrong," Nicholson says. "I think many people would want the ability to send email questions to physicians and get answers in return. Aside from potential liability problems caused by dispensing information via email, however, there is also the fact that doctors are sensing a huge increase in their workloads. That would be fine if their time spent sending emails were reimbursed, but it isn't."

Nicholson cites an ongoing experiment in an Oregon community where patients who are members of a small two-doctor practice are allowed access to their own medical records and encouraged to email the practice any questions they have about the results of lab tests, for example, or potential side effects of certain drugs.

"There wasn't a rush of emails to the physicians, and many of those that came in could be answered by the nurses," Nicholson says. He refers to another survey showing that one-third of doctors have their own Web sites, a figure that is expected to grow to 50 percent within the next year. In light of this, Nicholson sees some sort of additional product that can be laid on top of physicians' Web sites that refers patients on a disease-by-disease basis to high-quality sources of information.

The business of health care
"The most optimistic view of how the Internet will affect the health care system is that it will provide low-cost, high-quality health information to consumers who will then use this information, in conjunction with providers, to produce better health outcomes," the Wharton researchers note in a preliminary assessment.

Behind this "optimistic" view lie a number of assumptions about how the business of health care does and should work. For example, survey results from the Wharton Virtual Test Market show an unexpectedly high number of people buying health care items through the Web. The purchases, however, tend to be vitamins and nutritional supplements rather than prescription drugs. This is because most online pharmacies have not tried, or have not been able, to set up links with insurance companies to cover the costs of these prescriptions.

In fact, says Nicholson, "the online drugstores have not been selling a lot, period, and their stock prices reflect this. They are very, very low relative to a year ago. Drugstore.com, PlanetRx.com and others have lost a billion dollars of market value over the past year, so Wall Street clearly doesn't think they can sell prescription drugs.

"Even if a consumer read on the Internet about an alternative drug for asthma, clicked on Drugstore.com and then wanted to order that drug, she would first need a prescription. She might then have to pay out of pocket for that drug because her insurance company just isn't linked up to Drugstore.com.

"Online drug companies are definitely trying to make these links with insurance companies, but it will take a lot of work," Nicholson says. "For example, physicians need to start using technology that allows them to write prescriptions online; then there needs to be a series of procedures and agreements between the drug dispensers, the insurance companies and the online drugstores. Little of that has happened yet."

Some companies have begun trying to enter this market. Among the aspirants is eHealthInsurance.com, a California-based company that sells health insurance over the Web.

Consumers could help. "If consumers find sites that allow them to search for information about a specific condition, learn about a new drug, request a prescription for that drug from their doctor, order that drug at the online pharmacy, and have it automatically delivered to their home, then perhaps they would start demanding that their insurance company do whatever it takes to allow this process. But again, that hasn't happened yet."

Pharmaceuticals and advertising
Mixed into this whole equation is the role that pharmaceutical advertising plays, not just in influencing consumers' choice of drugs but in supporting the business models of health care Web sites.

"The question for pharmaceutical companies is how much money they should take from their non-Internet advertising budget and allocate to the Web, and what impact that will have," Nicholson says. "If you look at these health content sites--Drkoop.com, OnHealth.com, WebMD.com--they are driven by advertising revenue. And half of the health ads on the Internet comes from pharmaceuticals.

"In its first year Drkoop.com hit its revenue target almost exactly: They had projected $9 million in sales and came in at $9.5 million. About 80 percent of that was advertising. They projected that in 2000 they would get $40 million in advertising. In the first quarter they got $4 million. Their stock tanked and they laid off one-third of their staff. So the advertising dollars are not materializing yet. But that doesn't mean they won't," Nicholson says.

"Pharmaceutical companies currently spend $2 billion in direct-to-consumer advertising. Johnson & Johnson has said it will move 40 percent of its ad budget to the Internet. If everyone moves 40 percent to the Internet, that's almost $1 billion. This could allow many of these online health care content sites to continue offering free information to consumers.

"But if the pharmaceutical companies find that TV and magazine ads are less expensive than Internet ads as a way of prompting consumers to ask their doctors for a certain prescription drug, then that money won't move there."

Essentially, Nicholson says, the pharmaceutical companies can just "sit back and wait to see what happens. They don't have to forge relationships with Drkoop.com. Many, in the meantime, are setting up their own sites. Claritin has a Web site that gets a lot of traffic and generates leads at a fairly inexpensive rate."

Some business observers, Nicholson adds, say that Internet advertising is only going to be effective if pharmaceuticals pair it with TV and magazine advertising. In other words, Internet ads will supplement, not replace, the more traditional ad routes. For example, without the name recognition that Claritin gets from being advertised on television, most people probably aren't going to click on the Claritin banner on a site like Amazon.com.

In the meantime, Nicholson says, "a lot of business models can be made or broken depending on how much and when pharmaceutical advertising dollars come to the Internet."

 
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