PHR vendors bypass patients, pitch to business

A recent study finds vendors of personal health records are focusing less on consumers and more on employers and insurers.

By Pamela Lewis Dolan, AMNews staff. July 7, 2008.

After several years of mostly striking out with consumers, personal health record vendors are adopting a business-to-business marketing model, courting employers and insurers in hopes of expanding PHR adoption.

A recent study by Cambridge, Mass.-based industry analyst Chilmark Research found that of the more than 200 PHRs on the market, only 20% are Internet-hosted, which is what the study focused on.

Of those, 40% are thriving, 35% are treading water "and the remaining 25% are walking zombies, not quite dead, but not very alive, either," the study said.

Study author John Moore said PHR vendors, until recently, were marketing to consumers. But with the exception of those with a chronic disease or their caregivers, consumers had expressed very little interest.

Now employers and health plans are starting to see the potential for PHRs to reduce health care costs, Moore said, and are offering incentives for their use. So vendors are focusing on strategic alliances.

Moore said privacy and security hurdles still need to be cleared before consumers can be sold on offering personal information for any PHR.

"What really surprised me [in doing the survey] is what a terrible job the PHR vendors have done addressing privacy and security as an industry," he said.

Moore believes the entrance of Google and Microsoft into the market could help raise the bar on what consumers will expect.

But the American Medical Association and others aren't waiting for vendors to respond, but would like to see legislation mandating security standards. The AMA is advocating that HIPAA be extended to all entities that have contact with health data, including PHR vendors.