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April 19, 2008 11:41 AM PDT

VC investors show signs of constraint

by Zoë Slocum
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Companies seeking venture capital dollars have had a bit less luck in the past year, according to research released Saturday by Dow Jones VentureSource and Ernst & Young.

Overall United States-based VC spending in the first quarter of 2008, totaling $6.8 billion in 603 deals, is down 7 percent year over year and 9 percent since last quarter, according to the research, indicating that venture firms are keeping a tighter grip on their wallets in a time of market volatility and uncertainty.

Hit hardest are companies in the health care sector, which reached its lowest funding quarter in two years, at $1.74 billion. The customary six weeks of diligence for venture deals in the sector has ballooned to two to three months at some firms, Brian Atwood, managing director of Versant Ventures, told The Wall Street Journal.

VC investment in biopharmaceuticals endured a 59.2 percent drop since last year, while investment in health care services dropped 52.8 percent. Companies focusing on communications and networking technology also attracted 60 percent less venture capital than they did a year ago.

But while funding in those markets has dropped dramatically, venture investment in most others remains quite healthy.

IT providers--including companies focusing on communications, electronics, information services, semiconductors, and software--garnered a total of $3.88 billion in the quarter, marking a 20 percent gain year over year, led by information services. The "business/consumer/retail" category garnered 29 percent more venture dollars, led by a very strong media sector, which enjoyed a tenfold increase, growing from $21 million to $236 million during the same period.

Investment in the catchall "other" category, which includes the ever-popular clean-technology sector, remains steady, up 0.5 percent year over year.

March 17, 2008 11:27 AM PDT

New blogger/podcaster ad network tackles health care

by Michelle Meyers
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It seems TechCrunch beat Blogger & Podcaster magazine to the punch Monday by announcing the trade publication's new advertising network, which is expected to eventually include access to a group health care plan.

The cover of the current issue of Blogger & Publisher magazine.

(Credit: Blogger & Podcaster)

In response to the TechCrunch report, Blogger & Podcaster Publisher Larry Genkin confirmed his company's plans for the Blogger & Podcaster Media Network, or BPN, and added a few more details about the program he said will allow participants "to earn a living from being a full-time blogger/podcaster." The BPN is open to all bloggers and podcasters, regardless of subscriber count, unique visitors, or any other such restrictions, Denkin said. "And, we don't require exclusivity."

The BPN does, however, require listing in the USA Today Blogger & Podcaster Guide. Listings in the guide used to cost $49.95 per month, but under an expanded deal between USA Today and the BPN, the fee has been reduced to $5 per month, Denkin said. And bloggers will get even more for their money with the addition of 15 new media partners beyond USA Today. Those partners are expected to be announced later Monday, Denkin said.

The advertising portion of the program is expected to roll out this summer and will provide members with the option of including content widgets like polls, video players, and news feeds, in which ads will be embedded. Revenues from those ads will be shared with the BPN members.

The group health care plan, which will come later, could be a major advantage over other recently announced blog ad networks, because maintaining health care coverage is often a major roadblock for those who hope to take their new media careers full time.

February 27, 2008 12:25 PM PST

Get ready to Google-ize your health records

by Elinor Mills
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UPDATE 2:30 p.m. PT with hospital CIO comment.

ORLANDO, Fla.--Google Chief Executive Eric Schmidt will detail the company's plans for Google-izing the health care industry at a health care trade show on Thursday morning, starting with a consumer destination site called Google Health.

Schmidt is scheduled to give the morning keynote speech at the Healthcare Information and Management Systems Society (HIMSS) 2008 annual conference here and will outline Google's vision on tackling the next Internet frontier of medical data. The move, rumored for a few years, makes sense, given how much people use the Web to get health information and how much they spend on medicines and health care.

Google Health is being previewed at the company booth and gives a glimpse of what consumers participating in a trial in Cleveland will experience--a clean and simple interface where people can get to their health information in one place, share it with others, and search for information and care providers. Google Health will be available for anyone with a Google account to use later this year, said Missy Krasner, product marketing manager for Health Team Google.

This will be extremely convenient. Who hasn't struggled at the doctor's office to remember when that smallpox vaccine immunization was received or been overwhelmed by the task of trying to find a specialist doctor who takes your insurance plan and is located near your home or office?

Consumers using the site will be able to create a customized profile of their health, and share that with doctors and family members, as well as eventually important medical records from hospitals, doctors' offices, and pharmacies. The site is integrated with Google Maps and Gmail to enable people to search for health care providers, see their locations on a map, and save the contact information in Gmail.

Like it does with home page gadgets, Google will allow third parties to create gadgets that work within the platform. For instance, one gadget could alert people through Google Calendar when they need to take medication, Krasner said.

Google representatives weren't allowing anyone to take photos of the screen, but I snuck this one on my iPhone. On the table next to the chairs were the requisite colored lava lamps, infusing the sterile medical trade show environment with some cool, Silicon Valley Google aesthestic.

The screen shown at the Google booth featured three main columns of information. On one side were links to notices, drug interactions, and medical contacts, among others. In the middle were links to allow you to add more stuff to the profile, import medical records, discover more health tools, and find a doctor. On the right side is the profile summary, where you can link to conditions, medications, allergies, procedures, and test results.

The Google booth was tiny in comparison to others around it, but it was extremely crowded with representatives from other companies wanting to partner with Google and with consumers eager to know what Google has in mind for their medical information.

"I spend more time on Google than anywhere else on the Web," said one woman, who stepped up for a demo and was handed a Google mug and a cookie because the Google oven mitts handed out in prior days were gone. (Google also gave out aprons at a party for partners the night before to go along with its "Google Home" theme for the event, to signify that Google Health is a "safe and central place on the Web for medical information," Krasner said.)

Privacy and security are paramount
Given Google's strong brand in search and its reputation for innovation, there's no doubt that consumers will be riveted. However, Google will have to convince people that it can adequately protect their personal information, particularly sensitive information like medical conditions that could be misused by employers, insurers, and others, if exposed.

"There's going to be a time when law enforcement wants to see the records of someone," said Michael Zimmer, who is the Microsoft resident fellow at the Information Society Project at Yale Law School. "We know law enforcement has already asked for search records."

Google Health will be serving as a proxy for the consumer and therefore is not subject to government regulations such as the Health Insurance Portability and Accountability Act (HIPAA), as hospitals and doctor clinics are. This worries the World Privacy Forum, which issued a report (PDF) last week on the privacy consequences of personal health records. Such records can be more easily subpoenaed by a third party than health records covered under HIPAA, and data could leak into a marketing system or otherwise sold, the report said.

Krasner said Google Health users will actually have more control of their data because their express consent is required for any data sharing. Users can also hide portions of their profile, if they share it with others, and can delete data.

"I don't think consumers really understand this stuff," said Greg Sterling of Sterling Market Intelligence. "The convenience of having a health profile online would be valuable, but the issues of privacy and security really trump others, until there is legislation in place to protect consumers."

Google and others "want to become a new generation of digital Park Ave. doctors. They claim they are protecting medical and health privacy, but the real goal is to harvest consumer health data so they can target individuals with precision advertising for specific prescription drug brands and over-the-counter remedies," said Jeff Chester of the Center for Digital Democracy. "Behavioral targeting and other interactive marketing require a range of specific privacy safeguards, when it comes to health marketing."

Krasner told CNET Networks' ZDNet that Google won't sell the data and won't put ads on the site, but rather hopes to drive traffic to partner sites where there will be ads. In addition, Web searches will not be used to provide services or information to users of Google Health, Google representatives said.

One hospital administrator who hasn't seen Google Health yet is optimistic about the plan. "Generally speaking, personal health records are a good thing. I'm all in favor of individual responsibility, and having information close to you and in your control," said Craig Vercruysse, chief information officer at California Pacific Medical Center in San Francisco. "It is smart on Google's part to tie that into their overall search strategy."

Microsoft as friend or foe?
Google also faces competition from others, such as Microsoft's HealthVault, Healthline, WebMD and Revolution Health, founded by AOL founder Steve Case.

One of the most popular features of Revolution Health's Web site is the free personal health record, and people feel comfortable using it, Case said in his keynote at the HIMSS conference Wednesday. Consumers also like the Care Pages section, where friends and family can get updates on how a patient is progressing.

"We believe care pages can be the initial link between hospitals and consumers," Case added.

Earlier in the week, Microsoft announced that it was planning to spend $3 million to drum up developer support for its HealthVault electronic-records platform. Google Health could work with HealthVault, Microsoft representatives said.

"We are committed to being open," said Peter Neupert, corporate vice president for Microsoft's health solutions group. "We're just the custodian for the data. If you want to move the data from HealthVault to Google, you can."

Microsoft is creating a back-end ecosystem for developers, while Google is jumping in with a front-end site for consumers.

Google's strength in search technologies gives it a leg up over the others, said Alfred Spector, vice president of research and special initiatives at Google, as well as an engineering executive for Google Health. "Other core advantages are the infrastructure for storage, high availability, and scalability."

Other challenges remain for Google. The slow-moving health care industry is focused on long-term planning, while Google grew up in the rapid-pace environment of the Internet.

If it wants to extend its reach beyond the consumer portal, Google will need to find ways to work with more entrenched industry giants, such as Intel and General Electric, which are already working to bring the medical field into the Digital Age.

February 24, 2008 9:00 PM PST

Microsoft eyes health care app developers with $3 million fund

by Elinor Mills
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Got a good idea for a health care application? If so, you could get as much as $500,000 in funding from Microsoft.

(Credit: Microsoft)

Microsoft has created a $3 million fund to invest in applications built for its HealthVault electronic medical records platform, the company announced Monday at the start of the Healthcare Information and Management Systems Society (HIMSS) 2008 annual conference in Orlando, Fla.

Launched in October, HealthVault is intended to allow people to access their medical records through any device, regardless of the health care provider or insurer.

Google is expected to make a health care-related announcement of its own at the conference during the keynote of Chief Executive Eric Schmidt on Thursday. Last Thursday, Google announced a trial with Cleveland Clinic in which potentially thousands of patients will be able to access their health records through their Google accounts.

Microsoft's aim with the $3 million fund is to create an ecosystem around its HealthVault initiative, much like its Windows platform attracts developers to create programs that run on that operating system.

In particular, Microsoft is interested in applications related to preventive care, acute care diagnosis and treatment, management of juvenile diseases, women's health, and community and social health applications.

Microsoft, which last week decided to share details of its technology with open-source programmers, also is hosting a HealthVault open-source project to make development for the platform easier.

September 17, 2007 1:58 PM PDT

Study finds electronic health records vulnerable

by Robert Vamosi
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(Credit: CoActiv)

The results of a fifteen-month study accessing the time to patch software associated with electronic health record (EHR) systems were published today by the eHealth Vulnerability Reporting Program. The program is a collaboration of health care industry organizations, technology companies and security professionals that is attempting to establish best practices within the emerging field of electronic health records in the adoption and reliance of eHealth systems, including electronic medical records (EMR), picture archiving and communication system (PACS), and medical devices. The 39-page report found much room for improvement.

It's one thing to have your credit card information compromised--that can be replaced. It's another to have your health history hacked and made public. The report focused mainly on how medical equipment providers currently disclose vulnerabilities to customers, preventing hospitals and doctors from appropriately managing risk.

The amount of time between when a eHealth vendor is notified of a vulnerability and when that vulnerability is patched exceeded the time needed to patch in mainstream application software. For example, one medical application in the study remained unpatched after 2,211 days; another was 384 days and counting. By comparison, Brian Krebs of the The Washington Post found that the time to patch for Microsoft Internet Explorer was only 284 days.

No one organization has providence over vulnerabilities in eHealth applications, the report found. Organizations such as the Certification Commission for Healthcare Information Technology (CCHIT) and Healthcare Information Technology Standards Panel (HITSP) offer general security practices and standards, but no assessment of risks associated with reported (or unreported "zero day") threats.

The eHealth Vulnerability Reporting Program would like to see eHealth vendors collaborate with security software vendors to establish ethical testing and reporting, along with better disclosure, vendor certification and, of course, more public education of the problem.

May 25, 2007 10:58 AM PDT

How to create a genetic diary

by Tom Krazit
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CORONADO, Calif.--It's not a vacation home in Santa Barbara, but the best thing that people can leave to their children might just be a DNA map.

At least, that's what Ryan Phelan, founder and CEO of DNA Direct, thinks about her company's services. Phelan told attendees at the Future in Review conference that people who are taking several different prescription drugs or have a family history of cancer should consider looking into their genetic profile.

DNA Direct offers people a chance to send in a DNA sample (a cotton swab to the inside of the cheek) and get the results back in three to eight weeks. Naturally, there's a profit motive behind the pitch. The cheapest test offered by DNA Direct costs $199, and it scales up from there.

Tests are available to determine the genetic probability of several types of cancer, cystic fibrosis, and blood-clotting disorders, among other things. Knowing one's probability for diseases or other health problems could prompt people to get advance screenings when treatment could make a difference, Phelan said. And assembling a family DNA profile could make future generations aware of their susceptibility to various diseases.

Phelan took the opportunity in front of the conference attendees to float a trial balloon: are people interested in paying for a home DNA storage kit? According to an unscientific show of hands, lots of people are willing to pay $100 for such a kit, and Phelan's company is thinking about offering such a product.

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