Healtheon to help employers handle benefit programs

PALO ALTO, Calif. -- Don't call it Healthscape, and it's not a Web site. Jim Clark's new business, the third after he founded Silicon Graphics and Netscape Communications Corp., is called Healtheon, and it plans to provide information services to help health plans and employers better manage benefits programs.

In an interview at the company's headquarters, Clark said the Healthscape name, which had been previously reported, fell by the wayside partly because someone else already owned it, and partly because of a desire to set the new venture apart from Netscape Communications Corp., the Internet software company that has been wildly successful since going public in August.

Though Healtheon Corp. will use the World Wide Web as a platform, it does not intend to compete with the dozens, if not hundreds, of Web sites that offer health "content."

Healtheon will sell its services not to consumers, but to insurers and health-maintenance organizations, which will use Healtheon's software to present services to employers and to register employees.

"Benefits enrollment and management are a huge headache for health-care companies," said Clark, who will serve as Healtheon's chairman. "It's not rocket science to solve, but there's real value in creating an enrollment system for the health plans, so that they can sell it to employers."

Healtheon expects to create and manage enrollment and information systems for health plans. The company says it can reduce costs for the plans and employers, giving plans a competitive edge.

"We are creating a standard health-care community interface, using the Internet as a medium, and providing services to health-care providers," Clark said. The company has already signed between six and 12 health plans, representing 8 million customers, he said.

The health-care industry has been a laggard in adopting modern information technology, partly because of a legacy of incompatible computers and paper-based systems, and partly because of the fragmented nature of the business.

Though the Internet offers few solutions to this problem, the rapid consolidation and transformation of the industry means that new entities can take advantage of this emerging technology.

"Health care is an area where you have a lot of manual, paper- based processes, so almost anything you can do to mitigate that is bound to be significant," said Ira Machefsky, an analyst with Giga Information Group in San Jose, Calif.

By offering content tailored to each plan in addition to the administrative functions, Healtheon provides "a way to differentiate other than price," he said. "A lot of health care is information."

Healtheon's first service will automate the enrollment and management of employees in health plans; display multiple selections to make it easy for employees to evaluate, compare and enroll in specific benefit plans, like medical, dental, vision, life and disability insurance.

Later the service plans to integrate secure electronic mail to improve communication between employees, physicians and health plans. The service will also provide on-line health information to patients and answer their questions.

"We will have the ability to manage other benefits employers provide, but we're starting with health care because it is the greatest burden," said Dr. David Schnell, Healtheon's acting president and chief executive, and a partner on leave from the venture capital firm Kleiner Perkins Caufield & Byers.

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