Microsoft Wants Your Health Records

Its new service will store your data in one place—and search ads could make it pay. Will enough people put their trust in HealthVault?

by Jay Greene

Step into a medical office, and you're faced with a paradox of modern medicine. Just beyond the receptionist's desk are all sorts of cutting-edge medical technology. Computed tomography scanners. Electrocardiogram machines. Bone densitometers.

But as you approach that desk to check in, you take a trip back in time. There the receptionist hands you a clipboard of forms. For the umpteenth time you fill in your name, age, allergies, medical history, and the like. For all the medical breakthroughs created by technology, medical records remain an anachronism.

That's changing as more companies vie to bring medical records into the Digital Age. Webmd Health Corp. (WBMD) and insurers such as Aetna (AET), United HealthCare (UNH), and WellPoint (WLP) have provided electronic medical records to policyholders for years. More recently large employers such as Wal-Mart (WMT) and AT&T (T) have been banding together to offer electronic health record systems. Revolution Health Group, led by former America Online (TWX) boss Steve Case, is trying to crack the market, as is search giant Google (GOOG).

Introducing the Contender from Redmond

Now, Microsoft Corp. (MSFT) is joining the fray. On Oct. 4 the software giant is scheduled to launch a search engine-supported service to help patients coordinate disparate pieces of health-care information, from lab results and prescription records to X-rays and daily blood pressure and allergy readings. Aware that patients are skittish about putting the most personal data into a file server that's potentially available to prying eyes, Microsoft promises that patients alone will control access to their health information.

Privacy concerns aren't the only reason Microsoft may have a tough go of it. Patient health records are about as resistant to information technology as the common cold is to a cure. Doctors with small practices haven't always been keen to make the investment in computer systems when the payoff seems so unclear. Few hospitals have bothered to set up systems to retrieve data from patients' electronic files.

New Equation

Perhaps the biggest hurdle, though, is that there isn't any real economic incentive to digitize data. Paying for the computers that handle and store medical data, not to mention training office staff to use the systems, costs money. And the financial payoff is uncertain, at best. Dr. Robert A. Jenders, an internist who also works in the medical information systems unit at Cedars-Sinai Medical Center in Los Angeles, says initiatives such as Microsoft's are encouraging. But the amount of training needed to switch over to computerized systems may be more trouble than it's worth for many time-stressed physicians. "Their office practice works very well as it is now," Jenders says. "And time is money."

Microsoft, though, figures it can succeed where others have stumbled. It has changed the economic equation so that hospitals and doctors don't need to invest in new equipment to use HealthVault, its online repository for patient health information. Medical records software vendors, such as Allscripts Healthcare Solutions (MDRX), have worked with Microsoft so that doctors using Allscripts' software can easily send files over the Web to HealthVault. Doctors' offices that don't use such software can securely fax the data into a patient's digital files.

To launch and build HealthVault, Microsoft has enlisted Peter Neupert. A Microsoft veteran, Neupert forged the deal that created MSNBC in the mid-1990s and later launched the online magazine Slate. He left the company in 1998 to successfully introduce Drugstore.com (DSCM), where he stayed until 2004 before rejoining Microsoft in the wake of the dot-com bust. Neupert, now head of Microsoft's Health Solutions Group, figures he can build a business that generates "a billion-plus" in revenue from HealthVault as well as another business that sells software to hospitals.