The Internet is fueling a shift from a physician-centric model to a patientcentric model, and it could change the way you generate business.

We are in the early stages of a seismic shift that will affect the way Americans select their medical providers—doctors, specialists, dentists, and yes, HME providers. It will have a profound impact on most people who earn their living in the medical field, and it presents an enormous opportunity for HME providers who capitalize on the changing dynamics and grow market share.

This evolution is a result of many factors, chief among them are changes in the way consumers view health care, attitudes of Baby Boomers, and the emergence of the Internet.

During the past decade, the Web has been, arguably, the most important development in our society—weaving its way into the fabric of our business and personal lives. It has changed the way people buy. It has changed the way we communicate, both with other people and with businesses. It has changed the way political candidates are elected, and blown up entire industries—music, film, newspapers, magazines, information—rendering formerly sound business models obsolete. To date, its effect on the medical industry has been modest, but many signs point to big changes ahead.

Consider these trends:

• Nearly 85% of Americans now use the Web, and eight in 10 occasionally use the Web for health purposes.
• Women are slightly more likely than men to use the Internet for health and medical matters.
• Caregivers are slightly more likely than patients to research medical information on the Web.
• Web usage is correlated to income and education levels. The higher the education and income, the more likely people are to use the Internet regularly.
• Web usage varies greatly by age. The under-30 demographic uses the Web vociferously. But even among the 60- to 69-year-olds, more than half now use the Web regularly. Among the 70-plus crowd, more than 20% use the Internet regularly, and statistics show that this is the fastest-growing segment of Internet users. Among Internet users over 65, nearly 85% use the Web more than once a week.
• People with disabilities are less likely than the general population to use the Internet, probably due to access limitations. However, disabled people who do use the Internet are much more likely than the general population to be avid users and are highly likely to use the Web to gain health and medical information.
• The majority of caregivers report that the Web is their most important source of information, outranking the patient's physician in the survey.
• Among people over 50 who use the Web, more than half follow up by speaking with a health professional, and one-fourth use the information to decide on a course of treatment.
• Nearly half of Web users report turning to the Web first when needing health or medical information.

It is clear from existing data and trends that an increasing portion of your customer base is doing research, gathering information, and making decisions using this tool we call the Internet. Ignore this trend at your peril.

The Web has enabled people to gather information in a volume and depth they never could have done a decade ago. Researching health and medical information is one of the Web's most common activities. Physicians used to control this information, but no more thanks to the Internet and rising patient expectations. The physician no longer has a monopoly on medical information and that leads to less reliance on physicians than in the past. This lower reliance on physicians also transfers to their influence over patients' specialists and ancillary health care providers.

A new paradigm is emerging, and it greatly impacts HME providers. The traditional health care model had the family physician at the center of a hub-and-spoke configuration, with the patient, their family, specialists, and other health care providers and professionals positioned around the family doctor. The family physician dominated that arrangement, in large part because they controlled the access to and flow of information and relationships.

The emerging model has the patient at the center of the wheel, surrounded by caregivers and family, with the physician, other medical professionals, and information sources filling out the continuum of care circle around the patient. The physician remains a vital part of this continuum of care, of course, but moves out of the center where they exercised virtual total control. This predicts a fundamental shift from a physician-centric model to a patient-centric model. The Internet has enabled this shift.

A 2006 Pew Internet Project study found that nearly one-third of Americans used the Internet when seeking information about a medical provider, including making the decision on which one to use. The same study found that for Internet users with high-speed access, 50% used the Web as part of the process to select medical providers. This is a key point not to be missed—lots of people are using the Internet to do research on health care providers, and are using that research as part of their health care buying decisions. As recently as 5 years ago, few people would have considered making medical provider selections in this manner. A few years from now, this may well be the most common way to choose a health care provider. This implies a major turn away from the physician referral model historically dominant in the HME world. The shift will mean much more, if not a majority, of HME business will come from patient-directed demand, not physician-directed referrals.

Mike Mallaro

Most HME businesses focus their business generation efforts and investment on gaining more physician referrals. Over time, that source of business will decline, and generating business directly from consumers and their caregivers will be more common than it is now.

A Blue Cross/Blue Shield study of consumers found that the Web is consumers' top choice for health and medical information. Amazingly, the Web ranked ahead of the family physician and other health care professionals.

A separate survey of people 50 and older found the Web to be the second most trusted media source for information, ranking behind only books, but ahead of newspapers, television, and radio in terms of credibility. While usage of the Web has grown dramatically, traditional media has been and is in decline.

Newspaper readership is down nearly 50% during the last 30 years. Yellow Pages look-ups have declined by 30% in the last decade. Separately, there is a trend among consumers away from loyalty to a family doctor. This trend plays into the likelihood of a declining level of importance of physician-directed referrals to medical equipment providers.

Interestingly, drug companies have been the biggest investors in Internet marketing in the health care field. They have made massive investments in Web-based marketing. This is relevant because traditionally, drug companies are by far the best marketers in the medical world. When identifying best practices in sales and marketing in health care, look toward the pharmaceutical industry. If they are seeing this shifting to a patient-centric model, there is a good chance it will impact you sooner or later.

The Internet also creates many other, more tangible opportunities for generating new business for HMEs.

• Customer relationship management (CRM), an often overlooked opportunity for many HME providers, is becoming easier and more efficient through e-mail and Web-based tools. At a simple level, CRM is about maximizing the value of each patient.

In the HME world, that means making sure the CPAP patient gets new supplies when eligible and necessary, and making sure the oxygen patient knows Medicare will pay for a wheelchair should one be needed—and making sure that the elderly person asking for a bath chair is kept abreast of other items that can make the bathroom safer. E-mail tools now available can make that follow-up process highly automated and inexpensive. CPAP, in particular, offers a tremendous opportunity to grow profitable volume, and the volume can be generated at a relatively low cost through e-mail follow-up.

Internet retailing has emerged as a viable business in HME. Web retailing is a fundamentally different business model than the one practiced by the majority of HMEs. It requires different competencies, different types of investment, and different pricing than traditional HME businesses. But innovative HMEs are making it work. You can make an argument that Web retailing hurts the HME market, but making that argument won't change the reality that it is part of our world, and HMEs need to deal with it.

Technology allows you to expand your product offerings at the retail level without having to increase inventory investment. Innovative HMEs will utilize broad Web catalogs to feature specialty products that can be sold to consumers before they are purchased, which is a great business model.

The Internet has changed the world, and it will, in many ways, be changing the HME world during the next decade. Consider ways in which the Web can make a positive impact on your business. Surely we are living in a time of great change. Evaluate opportunities and use this amazing tool to grow your business as never before.

Mike Mallaro is chief financial officer for the Van G. Miller (VGM) Group, Waterloo, Iowa. He can be reached via e-mail through the HME Today editor: .