eDoc Sees Black Ink, Deal With UA System

A Dallas association management company began offering eDocAmerica.com to its nearly 100,000 members in April, finally propelling the Little Rock dot-com company to profitability.

Md Online LLC began peddling its service of answering medical questions by e-mail in 1997. Over the years, it has scrambled to sign up customers and been pressured into dropping its online prescription-writing service.

But now it’s smooth sailing.

eDocAmerica boasts more than 140,000 patients at 335 companies across the country.

The company reported revenue of $300,000 in 2002, up from $250,000 in 2001. With the University or Arkansas system coming aboard this summer, eDoc is projecting revenue of nearly $600,000 this year and $1.5 million in 2004.

When Md Online entered the market, there was no such thing as a company designed to give medical advice and routine diagnosis through e-mail. Times have changed.

Other companies and hospitals, including the Cleveland Clinic and Massachusetts General Hospital, recently have announced they are offering online consultations.

Some people are even predicting these “e-doctor” services will help slow rising health care costs by reducing office visits. One study showed that by 2010, more than 20 percent of all office visits could be eliminated by a patient asking a physician questions online.

Not all doctors are giving these services a clean bill of health.

“I think it’s horrendous,” said Dr. David Goldstein, co-director of the University of Southern California’s Pacific Center for Health Policy and Ethics. “I think it’s unethical to promote that as something that can aid patients in the interest of building business or garnering subscribers.”

Dr. Charles Smith, president and CEO of eDoc, said his service is designed to educate and coach patients.

“We really can’t provide patient care to patients that we’ve never seen,” he said.

Instead, eDoc is improving and enhancing medical care that the patient has already received, he said.

Patients have their own doctors perform exams and write prescriptions. Then eDoc is available to clarify their doctors’ orders or answer other medical questions the patient might be too embarrassed to ask in person.

“(Patients) have a need after they leave that office for information,” Smith said.

eDoc has 10 board-certified physicians and one psychologist on staff to field questions through a secure Web site.

Most questions are answered within 24 hours.

Beginnings

Over the past decade, Smith had been working with computers while juggling his practice.

Smith, who has been in practice for about 30 years, saw that doctors don’t have enough time to spend with their patients and patients sometimes don’t understand the doctor’s orders.

“So my thought would be to create another tier in the health care system that would complement the rest of the system, not replace it,” Smith said.

And some patients drag themselves to the doctor’s office when their question could have been answered over the phone or through e-mail.

For those reasons, eDoc was born.

“The nice thing about eDoc is that patients could log onto our system and ask our physicians many if not most of those same questions,” which would prevent a trip to the doctor, Smith said.

Physicians could take as much time as they needed to find the answers.

“Just imagine how valuable that would be — to essentially have second opinions or clarifying opinions or reactions to virtually everything that you come across in the health care system,” Smith said.

eDoc was hatched in the University of Arkansas for Medical Science’s BioVentures, a business accelerator designed to help technology-based startup companies. The idea quickly spread.

Equity Capital Corp. of Little Rock began raising money for eDoc in November 2000 and bought the first two investor units at $25,000 each. UAMS and several of the doctors also pumped money into the company.

Equity President Max Hooper said in 2001 that Equity had planned on raising $5 million for eDoc, but Equity would probably stop raising the money when it reached $1 million.

“We believe it will be substantially profitable the first year,” Hooper told Arkansas Business in April 2001. But it was two more years before eDoc saw a profit.

On Oct. 15, 2001, Md Online told the Arkansas Securities Department it had raised $787,500 by selling 31.5 shares at $25,000 each. The company also told the Securities Department that it was finished selling shares.

Part of the reason the company was slow getting out of the gate was no one had ever heard of that type of service, Smith said.

“We’re essentially creating a market that never existed before,” Smith said. “That is a slice of a health care benefit package that most companies don’t really understand.”

Another stumbling block to sales was most companies would only consider buying at the same time of year when the company typically settles on its health insurance plan for the coming year.

“So you have to get in line for their sales cycle,” said eDoc President Robbie Linn. “So we typically plan about a year lead time [to make a sale.]”

eDoc has spent the last two years wooing companies to buy its service.

“It’s those relationships and time frames that are now coming to fruition,” Linn said. “I think we’re well-positioned as we move forward.”

Another minor blow to the company came in March 2002 when it reached the agreement with the state Medical Board to stop writing prescriptions over the Internet for patients in Arkansas.

Linn said it wasn’t that big of a deal because fewer than 10 percent of eDoc consultations resulted in prescriptions anyway.

“It has no impact on our business,” he said.

Picking Up Business

The company has been picking up steam since January 2001, when it had fewer than 24 corporations signed up. A year later, eDoc had about 130 companies, and now it has 335.

The company that pushed eDoc from the red to the black was Specialized Association Services of Dallas, an association management company that represents numerous trade associations.

eDoc said it needs about 50,000 covered lives to break even. Before SAS came on board, eDoc had about 40,000 lives.

eDoc’s strategy to attract more clients is to target four markets: employers, association and affinity groups, insurance companies and mass marketers.

With 140 million Americans in the work force, eDoc’s current goal is to capture 1 percent of that market, or 1.4 million employees, said Daryl Coker, a consultant for eDoc.

The main selling point to employers is eDoc can cut down on the number of doctor office visits employees schedule for routine diagnosis and advice.

eDoc’s statistics show its service eliminates 25-33 percent of office visits. For the price of about $1.25 per employee per month — or less, depending on the number of employees — participants get unlimited access to a secure Web site to ask medical questions.

He said the Internet doctors should have a disclaimer when offering advice, saying there are a number of diseases that could be suggested by the symptoms a patient mentions.