Medem, Cerner form alliance for consultations

The deal between the AMA- and medical-society-owned Web service and the hospital information supplier will boost business for both.

By Tyler Chin, amednews staff. Feb. 24, 2003.

Medem Inc. and Cerner Corp. have signed a deal that could make online consultation services available to thousands of physicians affiliated with hospitals that are Cerner clients.

Under the deal, Cerner will integrate Medem's secure online consultation service into PowerLink, a physician Web portal, and IQHealth, a patient Web portal.

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Cerner sells the products to hospitals, which use them to exchange information electronically with affiliated physicians and patients.

Typically, hospitals use the products to give doctors and patients access to drug information, laboratory results and other data.

The two companies, which declined to disclose financial terms of the agreement, said the deal gives them access to more potential clients.

1,000 hospitals and health systems use Cerner's products.

Medem will gain access to tens of thousands of office-based physicians affiliated with more than 1,000 hospitals and health systems that use Cerner's products, said Edward Fotsch, MD, CEO of Medem, which is partly owned by the American Medical Association and other medical societies.

"We get a new source of distribution of our network services," Dr. Fotsch said.

Medem is betting that physicians who get access to Cerner's products by way of hospitals will be motivated to sign up for and use the online consultation service because it gives them a way to market their practices to new patients and an additional source of income.

Physicians who signed up to use Medem's service early are averaging five to seven consultations a week, which means that the consultations will generate $5,000 to $7,000 of additional income annually for physicians, Dr. Fotsch said.

Most doctors are charging an average of $26 per consultation, which Medem collects, taking a $2.50 fee per transaction. If the physician does not charge, Medem does not either.

Some 85,000 doctors use Medem's secure messaging system, with 2,000 doing online consultations since the service was launched last summer.

Like Medem, Kansas City, Mo.-based Cerner, which is primarily known for selling information systems to hospitals and health systems, hopes that the deal will make it easier for it to market itself and its products to office-based physicians.