Pfizer, IBM, Microsoft to sell software to doctors

Drug manufacturer Pfizer, IBM and Microsoft are forming a joint venture aimed at developing software and services to cut the amount of administrative paperwork in doctors' offices, the companies said today.

The as-yet-unnamed company will focus on reducing costly administrative work, such as insurance claims, for physicians, the companies said in a statement. It will market its products to doctors in small group practices, which represent 70 percent of the office-based doctors in the US, the companies said. The companies didn't say how much capital each would invest in the deal.

"Innovation and strategic partnerships have been key to Pfizer's growth. This initiative represents our customer focus in action: a cost-effective, customized solution that responds directly to one of the most pressing issues facing physicians today," said Karen Katen, Pfizer's executive vice president and president of worldwide pharmaceuticals, in the statement.

According to the companies, IBM will provide the hardware, installation and help desk call centers. The application service provider-based system will use Microsoft's .Net Enterprise Server Platform and Windows 2000, and operate over the Internet via wireless, handheld computers. Pfizer salespeople won't sell the new company's software but will tell doctors about it during routine sales calls and then refer them to the venture's marketing group.

The technology would provide physicians with access to medical histories, insurance information, lab results and billing arrangements in a secure environment, the statement said.

While he agrees that such a strategic alliance is the key to success in this market, Richard Telesca, an analyst at Giga Information Group in Rocky Hill, Conn., said the new company will still have to persuade doctors to buy into its new system.

"They have to tell doctors how it will impact their bottom line," Telesca said.

Doug Johnston, an analyst at Forrester Research in Cambridge, Mass., said convincing doctors shouldn't be all that difficult.

"These companies have addressed the [issue] that causes the most pain in the health care industry -- paper-based claims," he said. "The group they're targeting, small medical groups, will save about US$8 billion a year if they move from a paper-based system to an [automated] one. It costs about $9 to process a paper-based claim, while it only costs $1 for an electronic one. The bottom line is this will help them get paid faster."

Johnston said that to persuade doctors to move to its new system, the company will have to ensure that it can integrate its system with the practice management systems used by doctors or offer them a new system that includes such services as scheduling, billing, accounts receivable and claims.

As for privacy concerns, Johnston said new federal guidelines in the works should go a long way toward protecting consumers' online privacy.

The venture is similar to one already operated by WebMD , a struggling Atlanta-based health care information company seeking to provide an interactive service between doctors and insurers that would ostensibly bypass the reams of paperwork physicians now need to fill out.

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