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drkoop.com files to go public
drkoop.com, the Austin-based health portal co-founded by Dr. C. Everett Koop and CEO Don Hackett, has filed to go public under the NASDAQ symbol "KOOP." Underwriters Bear Stearns, William Blair, and Wit Capital hope to raise $50 million.
Drkoop.com was founded in January 1997. It was originally incorporated under the name Personal Medical Records, Inc. in July 1997. It changed its name to Empower Health Corporation in April 1998 and to drkoop.com earlier this month. drkoop.com offers visi tors a broad range of health information, 100+ online support communities, news, e-commerce, health site reviews, a quit-smoking program, a unique health insurance center, and a variety of other interactive resources.
drkoop.com's business model involves a mix of advertising and e-commerce transaction revenues. The company also offers a subscription-based Web site co-branding service to hospitals developing online resources for their patients. To date, the drkoop.com s ite has been visited by more than 2.6 million unique users and has more than 83,000 registered members.
Hackett said that he first started thinking about the consumer's role in networked health systems while providing high-tech consulting services for hospitals. "I became convinced that healthcare was going to need one big integrated system. And I believed that the consumer would be a vital link in that network. I tried to convince my company to create an electronic medical record with a consumer interface, but they wouldn't go for it. So I quit my job to pursue the idea on my own." A short time later, Hack ett discovered the line of medical videos Koop had done for Time-Life Medical. Packaged with each video was a personal medical journal.
"Chick [Dr. Koop's nickname] and I saw that we were trying to accomplish much the same thing," Hackett said. "We hit it off beautifully and decided to join forces. I sensed from the very beginning that he saw this as an opportunity to continue the push fo r the same kind of patient empowerment and health reform he had worked for while he was Surgeon General.
"Unlike most other physicians, Chick really gets it about the value of online support groups," Hackett said. "After the death of their son in a mountain climbing accident, Chick and his wife became active members of a face-to-face support group for parents who've lost a child. It was very helpful to them."
The company originally planned to develop its own electronic medical record for consumers. But in January of this year, drkoop.com joined forces with another company attempting to do the same thing. HealthMagic, Inc, of Columbia, South Carolina, had devel oped a similar consumer-oriented electronic medical record. Under the terms of their partnership, drkoop.com received 10 percent of the outstanding stock of HealthMagic and HealthMagic received 10 percent of the outstanding stock of drkoop.com. HealthMagi c got the personal medical record software drkoop.com had developed and drkoop.com got $3.5 million in cash.
"We were looking for the best consumer health record in the marketplace and we are confident that we found it in HealthMagic's product, HealthCompass OnSite," Hackett said. The new medical record will be available for free at drkoop.com later this year. I t will provide consumers with "a secure and private place to receive and maintain a lifetime of personal health information," Hackett said.
For more information on HealthMagic contact:
Published in The Ferguson Report, Number 2, April 1999
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