Profiles of E-health Businesses. 0010.Profiles of E-health Businesses.SNUH 1 E-health business...

Profiles of E-health Businesses

0010.Profiles of E-health Businesses.SNUH 1 E-health business growth is being driven by the high degree of industry fragmentation, interaction costs and consumer/provider demand A broad range of e-health business have emerged to facilitate efficient interchange of content, commerce and interconnectivity Significant opportunity exists for the development of high value e-health businesses in Korea E-health business growth is being driven by the high degree of industry fragmentation, interaction costs and consumer/provider demand A broad range of e-health business have emerged to facilitate efficient interchange of content, commerce and interconnectivity Significant opportunity exists for the development of high value e-health businesses in Korea KEY MESSAGES

0010.Profiles of E-health Businesses.SNUH 2 Hospitals Care centers Clinics Pharmacies Suppliers Insurers/funding bodies DRIVING FORCES: FRAGMENTATION AND INTERACTION COST

0010.Profiles of E-health Businesses.SNUH 3 Continuum of care Wellness-focus Case/Lifetime-oriented Integrated delivery networks Capitation/casemix type payments Cost centres and prevention incentives Focus on customer needs The recognition of opportunities for process improvement and cost reduction is driving the development of more integrated, consumer oriented and outcomes focused health systems. Episodic Care Intervention Focus Transaction-oriented Hospital/Hospital systems Fee-for-service/global budget Revenue Centres/ intervention centres Focus on internal needs DRIVING FORCES: FRAGMENTATION AND INTERACTION COST

0010.Profiles of E-health Businesses.SNUH 4 Recognition of the enormous growth in ability to access information Desire for greater control/participation Increasing administrative and clinical service quality expectations Significant take up of purchasing over the internet DRIVING FORCES: CHANGING CONSUMER DEMANDS

0010.Profiles of E-health Businesses.SNUH 5 Ongoing information needs high Patient data collection and management is arduous and time consuming. Little information is captured as a by product of care delivery Basic lack of integrated clinical information systems Practice management systems demands are high for small practices DRIVING FORCES: PROFESSIONAL INFORMATION NEEDS

0010.Profiles of E-health Businesses.SNUH 6 E-health business growth is being driven by the high degree of industry fragmentation, interaction costs and consumer/provider demand A broad range of e-health business have emerged that facilitate efficient interchange of content, commerce and interconnectivity Significant opportunity exists for the development of high value e-health businesses in Korea E-health business growth is being driven by the high degree of industry fragmentation, interaction costs and consumer/provider demand A broad range of e-health business have emerged that facilitate efficient interchange of content, commerce and interconnectivity Significant opportunity exists for the development of high value e-health businesses in Korea KEY MESSAGES

0010.Profiles of E-health Businesses.SNUH 7 Source:McKinsey analysis Specific Description Create and aggregate content, build communities, and offer value-added services Provide online commerce solutions for product and service purchases Provide end-to- end solutions and/or a combination of multiple services to various healthcare participants Provide solutions to connect various healthcare participants (information connectivity) Revenue model Multiple revenue streams Advertising Sponsorships Subscriptions Service-related fees Direct online commerce and off-line pull Varies Mostly transaction-based revenues, also fees from Subscriptions Licenses Services Business-to-consumer (health products) Business-to-business Online insurance brokering Content Commerce Customer information portals Physician/Healthcare professional services Health plan/Hospital services Aggregate Transaction/practice management services Online patient medical records Online care services Connectivity Horizontal Vertical E-HEALTH BUSINESS FRAMEWORK

0010.Profiles of E-health Businesses.SNUH 8 Source:McKinsey analysis, News clippings Description Clinical information and other health- related topics Examples OnHealth.com MayoHealth.com iVillage.com Adam.com DrKoop.com DiscoveryHealth.com Healthcentral.com Oxygens Thrive online E-HEALTH CONTENT: 3 MAIN APPLICATIONS Content Customer information portals Physician/Healthcare professional services Health plan/Hospital services

0010.Profiles of E-health Businesses.SNUH 9 CONTENT CUSTOMER INFORMATION PORTAL EXAMPLE: ONHEALTH.COM Source:Company financial report and website, Hoovers, News clippings, Jupiter Analyst Report 9/99 Value Proposition Deep proprietary health content covering both traditional and alternative medicines Partnerships with the Cleveland Clinic, Mount Sinai Cardiovascular Institute, the Scripps Clinic, the International Diabetes Center, Harvard Medical School Resident expert columnists Traffic driven to Onhealth.com from +600 different sites Business Model Revenue primarily generated through: Advertising/ sponsorships E-commerce transactions Premium services Content syndication Strategic Relationships Portal: AOL Digital Cities, Infoseek/Go, GeoCities, Planet Direct, WebTV, Weather.com, Myway.com, Snap.com, Yahoo!, MindSpring, About.com, Ask Jeeves, Better Homes and Gardens Commerce: drugstore.com, The Vitamin Shoppe, Amazon.com, ProFlowers, American Greetings, WholeFoods.com, gazoontite.com, The Green Marketplace Company Snapshot Launched: July 1998 Ownership: Public (Nasdaq: ONHN), Acquired by Healtheon/WebMD Industry: Healthcare online content providers Market cap:$75.0 million 1999 Revenues:$3.8 million Other:Most trafficked health site on the web as of 2/2000, Best Health and Medicine Website - US News and World Report Key Issues Differentiation on proprietary health content is subject to fierce competition from other health content, lifestyle-sites, women-sites, and portals Description Customer-focused content health site targeting women aged 25 to 54 Features include: Health information and news Interactive tools Physician directory Community discussion groups Live interviews Drug database Online shopping Online classes Premium services

0010.Profiles of E-health Businesses.SNUH 10 Source:McKinsey analysis, News clippings Description Web-based services to simplify and enhance information access, communications, and training for physicians Examples Medscape.com Physicians online Stanford SHINE Medsite.com E-HEALTH CONTENT: 3 MAIN APPLICATIONS Content Customer information portals Physician/Healthcare professional services Health plan/Hospital services

0010.Profiles of E-health Businesses.SNUH 11 CONTENT PHYSICIAN/HEALTHCARE PROFESSIONAL SERVICES EXAMPLE: MEDSCAPE.COM Source:Company financial report and website, Hoovers, News clippings Description Physician-focused portal and content site designed to educate health care professionals with reference materials, educational programs, tools, and services Features include: Integrated search engine to retrieve abstracts and full-text peer reviewed clinical medicine articles from +500 leading medical publications Next-day conference summaries Medscape General Medicine: Internets first primary source medical journal Programs to earn CME credit Daily and weekly specialty newsletters Personal physician websites Money & Medicine: Online financial resource center Medscape bookstore Specialty site for medical students Palm Docs: Downloadable Palm organizer tools and resources Value Proposition Largest single source of articles and news on health topics Palm Docs enables physicians to create and retrieve information in ways that fit into their workflow Business Model Revenue primarily generated through: Advertising and sponsorships Market research e-commerce Member fees Strategic Relationships Commerce: BarnesandNoble.com, Drugstore.com Connectivity: Softwatch Content: CBS, Healthcare Communications, MSNBC, National Data Corporation, Reuters Health Information, TMP Worldwide/Monster Board Company Snapshot Ownership:Public (Nasdaq: MSCP), Proposed merger with MedicaLogic Industry:Healthcare online content providers Market cap:$145.1 million 1999 Revenues:$11.2 million Other:Boasts 1.7 million registered members worldwide Key Issues Proposed merger with MedicaLogic will provide key technology for creating online health records

0010.Profiles of E-health Businesses.SNUH 12 Source:McKinsey analysis, News clippings DescriptionExamples Kaiser Foundation Health Plan Cigna Web-based services to simplify and enhance information access and communications to hospital/health plan members E-HEALTH CONTENT: 3 MAIN APPLICATIONS Content Customer information portals Physician/Healthcare professional services Health plan/Hospital services

0010.Profiles of E-health Businesses.SNUH 13 CONTENT HEALTH PLAN/HOSPITAL SERVICES EXAMPLE: KAISER PERMANENTE HEALTH PLANS Source:Company website, News clippings, Jupiter Analyst Report 9/99 Description Nonprofit, public benefit corporations that contract with individuals and groups to arrange comprehensive medical and hospital services. KFHP, along with Kaiser Foundation Hospitals and the Permanente Medical Group, is a part of Kaiser Permanente Internet features include: Online doctor appointment registration Online prescription refill requests Advice nurse Physician directory Medical and disease information Discussion groups Health education classes Value Proposition Offers more member services and features than any of its HMO/health plan competitors Business Model Overall goal is cost control, not revenue generation Strategic Relationships Kaiser Permanente has 8.6 million members, creating a low-cost channel for driving adoption of services Company Snapshot Launched: 1997 (www.kponline.org) Ownership:Nonprofit Industry: HMO/Health plans

0010.Profiles of E-health Businesses.SNUH 14 Source:McKinsey analysis, News clippings Description Online selling of consumer health products Examples PlanetRX.com CVS.com DrugEmporium.com Drugstore.com Familymeds.com RX.com eNutrition.com Healthshop.com more.com MotherNature.com Greentree.com vitaminshoppe.com E-HEALTH COMMERCE: 3 MAIN APPLICATIONS Business-to-consumer (health products) Business-to-business Online insurance brokering Commerce

0010.Profiles of E-health Businesses.SNUH 15 COMMERCE BUSINESS-TO-CONSUMER (HEALTH PRODUCTS) EXAMPLE: PLANETRX.COM Source:Company financial report and website, Hoovers, News clippings, Jupiter Analyst Report 9/99 Value Proposition Convenient, 24/7 shopping with product selection that includes +28,000 SKUs Recent alliance with ePhysician allows for doctors to transmit prescriptions via ePhysician technology to PlanetRx pharmacies First e-commerce site to offer scanner functionalities, enabling customers to scan bar codes of products to purchase from the website Business Model Revenue primarily generated through: Sales and related shipping costs Strategic Relationships Commerce: McKesson, HBOC, Bergen Brunswick Portal: Women.com, AOL, Netscape, BabyCenter.com, Time, Inc., Yahoo!, iVillage Content/services: FOX, Health Network, Healthcentral, DrugDigest.org, The American Society of Health-System Pharmacists, AllHealth.com, Medline Company Snapshot Launched:March 1999 Ownership:Public (Nasdaq: PLRX) Industry:Drug and Health Product Retailers Market Cap:$195.3 million 1999 Revenues:$9 million Other:Chairmans choice recognition award - EARL Awards 2000, excellence in online and in-store retailing Key Issues Acquisition of YourPharmacy.com completed key revenue strategy by becoming the exclusive online pharmacy to Express Scripts 36 million plan members for 5 years Unlike its competitors, PlanetRx will have to build a brand name without the assistance of a consumer-branded partner Description Retailer of prescription drugs, non-prescription drugs, personal care products, beauty and spa, vitamins, herbs, nutrition, and medical supplies Features include: Expert consultations Online communities with direct links to disease-specific websites (e.g., diabetes.com) Shopping lists Secure storage of customers prescription history E-mail reminders Newsletters Drug and Interaction information

0010.Profiles of E-health Businesses.SNUH 16 *Company descriptions provided in the following pages or in appendix Source:McKinsey analysis, News clippings Description Business trading community for healthcare products and services Examples CimtekMedical medibuy.com* Neoforma.com* Medline.com Omnicell.com* SciQuest.com Proposed Unnamed (J&J, GE Medical systems, Baxter International, Abbot labs, Medtronic)* newhealthexchange.com (AmeriSource, Cardinal Health, Fisher Scientific, McKesson HBOC, Owens & Minor) E-HEALTH COMMERCE: 3 MAIN APPLICATIONS Business-to-consumer (health products) Business-to-business Online insurance brokering Commerce

0010.Profiles of E-health Businesses.SNUH 17 The B2B landscape Web enabling infrastructure B2B Services Web-based business process enabling systems PSM SCM DescriptionExamples Providers of web-based, XML-enabled purchasing automation software Providers of web-based, XML-enabled logistics improvement software THE B2B WEB INFRASTRUCTURE AND SERVICES LANDSCAPE

0010.Profiles of E-health Businesses.SNUH 18 B2B Services DescriptionExamples Firms facilitating management & delivery of website content Providers of software that translate information from an internal computer system into XML, transport it across the internet, and finally reconfigure it into a format that can be understood by a partners system Providers of auctioning tools/software The B2B landscape Web enabling infrastructure Software providers Content management Auction solutions XML-based application- integration Web-based business process enabling systems THE B2B WEB INFRASTRUCTURE AND SERVICES LANDSCAPE

0010.Profiles of E-health Businesses.SNUH 19 The B2B landscape Web enabling infrastructure B2B Services Application service provider/ outsourcing agents DescriptionExamples ASPs host software and provide other services to various companies for a fee Clients avoid cost investments Clients pay for services as needed Third parties managing select functions in the web development process e.g., web hosting, fulfillment, billing etc. Web-based business process enabling systems Software providers THE B2B WEB INFRASTRUCTURE AND SERVICES LANDSCAPE

0010.Profiles of E-health Businesses.SNUH 20 The B2B landscape Web enabling infrastructure B2B Services DescriptionExamples Tools/services to conduct real time, bulletin board, or sealed bid auctions Auctions THE B2B WEB INFRASTRUCTURE AND SERVICES LANDSCAPE

0010.Profiles of E-health Businesses.SNUH 21 The B2B landscape Web enabling infrastructure B2B Services DescriptionExamples Markets created by aggregating a number of suppliers and buyers Aggregators Auctions THE B2B WEB INFRASTRUCTURE AND SERVICES LANDSCAPE

0010.Profiles of E-health Businesses.SNUH 22 The B2B landscape Web enabling infrastructure B2B Services DescriptionExamples Online market making by matching buy and sell orders between multiple suppliers and buyers Exchanges Aggregators Auctions THE B2B WEB INFRASTRUCTURE AND SERVICES LANDSCAPE

0010.Profiles of E-health Businesses.SNUH 23 The B2B landscape Web enabling infrastructure B2B Services DescriptionExamples Community of interest focused on vertical industry segments providing a forum for information sharing, news, and creating exchanges Communities Aggregators Auctions Exchanges THE B2B WEB INFRASTRUCTURE AND SERVICES LANDSCAPE

0010.Profiles of E-health Businesses.SNUH 24 Opportunity for valueDrivers Reduce interaction/ process costs Order processing Sales, marketing, and customer service Buyer search/purchasing Standardize IT and business processes Reduce supply chain costs Optimize Lean inventory management Reduction in errors/rework Enhanced production planning/yields More efficient distribution Increase market efficiency Broad product/price information on availability, control over unauthorized buying New market-making mechanisms, e.g., exchanges reverse auctions, demand aggregation Increase revenue Increase value capture from current customers Reach new customers Enable new products/services 1 1 2 2 3 3 4 4 THERE ARE ACTUALLY FOUR DIFFERENT SOURCES OF VALUE IN B2B COMMERCE

0010.Profiles of E-health Businesses.SNUH 25 Percent Source:McKinsey estimates Cost of purchased materials and services 100% = Total costs Electronics Mini computers/PC Vehicles Refinery/ energy Other commodities Financial institutions Service industry Pharmacy 80-85 80 75-80 70 30 50-60 50 40 85 60 THE PORTION OF RAW MATERIALS AND SERVICE PURCHASE IN TOTAL COSTS

0010.Profiles of E-health Businesses.SNUH 26 CommoditiesSpecialties Standardized products Many suppliers Grey zone products Tightly specified products Few suppliers MANY DIFFERENT TYPES OF PRODUCTS ARE TYPICALLY PURCHASED BY A COMPANY

0010.Profiles of E-health Businesses.SNUH 27 Frequent Spot decisions Immediate needs Many purchasers Online bidding to negotiate contract Strategic negotiation with suppliers Catalog sites Aggregation tool Exchanges Catalog sites Aggregation tool Exchanges CommoditiesSpecialties Standardized products Many suppliers Grey zone products Tightly specified products Few suppliers DIFFERENT PURCHASING SOLUTIONS AND METHODS REQUIRED FOR DIFFERENT PRODUCT TYPES - TYPICAL OVERALL SAVINGS 25-30%

0010.Profiles of E-health Businesses.SNUH 28 COMMERCE BUSINESS-TO-BUSINESS EXAMPLE: NEOFORMA.COM Source:Company financial report and website, Hoovers, News clippings Description Provides B2B e-commerce services for medical products, supplies, and equipment Features include: Shop: 400,00- product listings from 13,000 suppliers across 10,000 categories; users can send e-mail RFQs Auction: Online and live auctions, appraisals, and liquidation of >1,000 items of used, refurbished, and surplus equipment Planning: Allows users to design a facility online - provides shopping list to address complexity and 3-D tour to visualize plan Information: Regulatory library, trade, and customer resources, news personalized by specialty external links Career: Job search and posting Value Proposition Multi-supplier marketplace for health care professionals (purchasing managers, administration, doctors) Buyer enablement focus, managing shopping lists track buyer behavior to allow repeat one-click ordering Business Model Revenue primarily generated through: Listing and transaction fees charged to suppliers for confirmed orders from shop Commission from online auctions Strategic Relationships Partnering with SAP to integrate into mySAP.com marketplace - provides seamless link from SAP back-end to Neoforma Partnered with Healtheon, MD On-Line.com, ECRI, University of Chicagos Duchossois Center for Advanced Medicine, and World Telehealth Purchased auction company, General Asset Recovery (8/99), to provide brick-and-mortar auctions Company Snapshot Ownership:Public (Nasdaq: NEOF) Industry:Medical Products Distribution Market Cap:$485.8 million 1999 Revenues:$1 million Other:Announced merger with Eclipsys Corporation (provider of end-to-end health care information solutions) and HEALTHvision (provider of Web-based solutions to health care organizations), 3/2000 Key Issues The medical products marketplace is highly fragmented, and estimated to be worth $140 million Merger created exclusive 10-year deal with Novation LLC (product buying consortium for 6,500 hospitals worldwide) giving Neoforma.com access to 1/3 of all US hospitals Lack of investor confidence over the recent announcement of planned acquisition of Eclipsys plummeted Neoforma.com share prices J&J/GE Medical Systems announcement over global health care exchange venture is troubling because GE Medical Systems is a venture investor in Neoforma.com

0010.Profiles of E-health Businesses.SNUH 29 Source:McKinsey analysis, News clippings Description Online selling of health insurance Examples eHealthInsurance.com Channelpoint.com Healthaxis.com E-HEALTH COMMERCE: 3 MAIN APPLICATIONS Business-to-consumer (health products) Business-to-business Online insurance brokering Commerce

0010.Profiles of E-health Businesses.SNUH 30 B3. COMMERCE ONLINE INSURANCE BROKER EXAMPLE: HEALTHAXIS.COM Source:Company website, News clippings Description Provides internet solutions for health care insurance marketing, sales, and payor connectivity; end-to-end solutions for the health insurance industry Features include: Customer Services: online platform, allowing customers to shop for, buy, and service health care plans Applications Solutions: Web-based software applications for transaction processing, internet enrollment, online access to plan and claims data, technology infrastructure management, and data capturing services Value Proposition Only e-health care company servicing both the consumer and B2B marketplaces Company Snapshot Ownership:Public (Nasdaq: HAXS) Market Cap:$74.4 million 1999 Revenues:$77.5 Industry:Online health insurance Strategic Relationships Carrier Partners: Aetna US Healthcare, Blue Cross, Celtic, Fortis, Peoples Benefit, Provident, Security Life Insurance Network Partners: First Health, CAREington, PCS Health Systems, Prudent Buyer PPO, Private HealthCare System Affinity Partners: AOL, Lycos, CNET, Snap!, 98point6, SPAN, PersonalMD, NCA, Insurance.com, Care City, DOCSDepot.com, USA Rewards, Ask the Doctors, BizOffice.com, Student Advantage Business Model Revenue primarily generated through: Commission

0010.Profiles of E-health Businesses.SNUH 31 Connect providers and consumers with healthcare organizations, including payors, hospitals, laboratories, and pharmacies CareInsite.com Claimsnet.com cybear cymedix Allscripts proxymed.com Source:McKinsey analysis DescriptionExamples E-HEALTH CONNECTIVITY: 3 MAIN APPLICATIONS Transaction/practice management services Online patient medical records Online care services Connectivity

0010.Profiles of E-health Businesses.SNUH 32 CONNECTIVITY TRANSACTION PRACTICE MANAGEMENT SERVICES EXAMPLE: CAREINSITE.COM Key Issues CareInsite has the right payor-focused model and a strong management team Potential significant competition on the horizon with payors currently developing a competing consortium CareInsite needs to aggressively develop a substantial customer base Source:Company financial report and website, Hoovers, News clippings Description Provides health care network and e-commerce services to enable the exchange of clinical, administrative, and financial information among physicians and their patients, and affiliated health plans, providers, and suppliers Services include: Transaction RxInsite: prescription communication Laboratory communication Managed care communication: claims, eligibility, referral and pre- certification authorization Content Messaging Value Proposition Integration of payor-specific benefit rules and guidelines with patient- specific information at the point of care serves to control costs and improve health care quality Extensive management experience in clinical process automation, health care transaction processing, and benefit management System built with existing, well-proven software and system interfaces (licensed Cerner technology) Business Model Revenue primarily generated through: Sales and implementation services Company Snapshot Launched:February 1999 Ownership:Public (Nasdaq: CARI) Industry:Medical Practice Management and Services Market Cap:$1.8 billion 1999 Revenues:$1.4 million Other:Medical Manager Corporation, which was purchased by Healtheon/WebMD, owns 69% Strategic Relationships THINC Cerner Horizon Blue Cross Blue Shield AOL

0010.Profiles of E-health Businesses.SNUH 33 Aggregate medical information from various sources to rebuild patient medical records MedicaLogic.com HealthMagic.com WellMed MedicalRecord.com PersonalMD.com Healinx.com Source:McKinsey analysis DescriptionExamples E-HEALTH CONNECTIVITY: 3 MAIN APPLICATIONS Transaction/practice management services Online patient medical records Online care services Connectivity

0010.Profiles of E-health Businesses.SNUH 34 CONNECTIVITY ONLINE PATIENT MEDICAL RECORD EXAMPLE: MEDICALOGIC.COM Key Issues AboutMyHealth.net is still in beta test mode Needs to quickly and aggressively expand its physician base in order to expand its customer base Source:Company financial report and website, Hoovers, News clippings, Jupiter Analyst Report 9/99 Description Provides web-based storage and management of medical records, as well as related products and services Products and services include: Electronic medical records for physicians (Logician) Personal health portfolio for consumers through AboutMyHealth.net Health-related content and e-commerce Internet health record for integration of physicians electronic medical records and consumers personal health portfolio Value Proposition E-health care products connect patients and physicians in a way that enhances quality, delivery, and cost-effectiveness Business Model Revenue primarily generated through: Advertising and sponsorship through AboutMyHealth.net Prepaid licensing and monthly fees from physicians Strategic Relationships Alliances: LabCorp, to directly link lab results and corresponding EMRs, CVS.com, drugstore.com, PlanetRx.com, Envoy Content: HealthGate Customers: Baylor College of Medicine, Providence Health System, Oregon Health Sciences University, VHA, Wake Forest Baptist Medical Center Company Snapshot Ownership:Public (Nasdaq: MDLI) Industry:Healthcare online content provider Market cap:$415.5 million 1999 Revenues:$19.7 million Other:Proposed merger with Medscape (Nasdaq: MSCP)

0010.Profiles of E-health Businesses.SNUH 35 Online consultations and Internet-enabled telemedicine services to customers iPhysicianNet.com Medwired HealthHero.com Alere.com Source:McKinsey analysis DescriptionExamples E-HEALTH CONNECTIVITY: 3 MAIN APPLICATIONS Transaction/practice management services Online patient medical records Online care services Connectivity

0010.Profiles of E-health Businesses.SNUH 36 Source:Company website, News clippings Description iPhysicianNet establishes a physical and internet-enabled electronic presence in physicians private offices, enhancing communication between pharmaceutical companies and physicians Products and features include: Interactive, real-time PC-based videoconferencing system e-Detailing: real-time detailing, allowing pharmaceutical company sales reps to communicate directly with physicians in their private offices High speed telecommunications lines Value Proposition Provides a cost-effective and efficient e-commerce communication channel between the pharmaceutical company and other health care professionals Using iPhysicianNet.com can result in a five-fold increase in the number of effective detail calls by a pharmaceutical representative Business Model Revenue primarily generated through: Services Strategic Relationships Connectivity: Hitachi Data Systems, x-ChangeMag.com, Axolotl, Rhythms NetConnections Customers: GlaxoWellcome Company Snapshot Ownership:Currently private, IPO filed Feb 2000 Industry:Internet-enabled health care services Key Issues Considering expansion into onsite medical conferencing, remote peer consultations, and other conferencing services CONNECTIVITY ONLINE CARE SERVICES EXAMPLE: iPHYSICIANET.COM

0010.Profiles of E-health Businesses.SNUH 37 Source:Company website, News clippings CONNECTIVITY OTHER EMERGING AREAS Private online education Patient communities Virtual personal clinics Home testing/monitoring Teleradiology Telepathology Telepsychiatry Private online education Patient communities Virtual personal clinics Home testing/monitoring Teleradiology Telepathology Telepsychiatry Broadband access and new voice and video over IP technologies will enable telemedicine and other virtual healthservice growth.

0010.Profiles of E-health Businesses.SNUH 38 Source:McKinsey analysis, News clippings Description Provide end-to-end solutions or combination of multiple services to various healthcare industry Examples Ventro.com E-HEALTH AGGREGATOR: 2 MAIN APPLICATIONS Aggregate Horizontal Vertical

0010.Profiles of E-health Businesses.SNUH 39 HORIZONTAL AGGREGATOR EXAMPLE: VENTRO.COM Source:Company financial report and website, Hoovers, News clippings Description Builder and operator of vertical B2B e-commerce marketplace companies; Purchases products from suppliers and resells them to customers Products/services include advanced search engines, transaction software, and systems integration capabilities Health care-related companies: Promedix: customers purchase products from medical product manufacturers with a single purchase order; 500 specialty suppliers represent over 325,000 SKUs Broadlane: high volume hospital and medical supplies, still in the development phase Value Proposition Different approach to e-commerce, focusing on end-to-end solutions tied to hospital ERP systems, rather than just a website making ordering and inventory management more efficient Lower sales and marketing costs, as well as improved inventory management and product delivery for suppliers Streamline business processes, increase productivity, and reduce costs throughout the supply chain Business Model Revenue primarily generated through: Resale of products Commission from sales Strategic Relationships (for Broadlane and Promedix) Tenet Healthcare/ Buypower (JV to form Broadlane, exclusive purchasing agreement with Promedix) Connectivity: VWR, Commerce One, Concur Technologies, IBM, Ariba, SAP Recently acquired SpecialtyMD.com Company Snapshot Ownership:Public (Nasdaq: VNTR), Formerly Chemdex Corporation Industry:Multi-sector internet marketplace companies Market cap:$1.1 billion 1999 Revenues:$30.8 million Other:Ventro is the parent company to 5 online companies - Chemdex (specialty chemicals in life sciences), Amphire (food services), Promedix (specialty medical items), Broadlane (health care supplies), and Industria (process-plant supplies) Key Issues Strong management team Key to success will be to rapidly expand hospital/ GPO base. However, hospitals and GPOs may be reluctant to share pricing Critics say that Ventro focuses too much on back-end solutions, thereby underselling the importance of front-end features Market is waiting for Ventro to prove its model

0010.Profiles of E-health Businesses.SNUH 40 Source:McKinsey analysis, News clippings Description Provide end-to-end solutions or combination of multiple services across the healthcare industry Examples Healtheon.com E-HEALTH AGGREGATOR: 2 MAIN APPLICATIONS Aggregate Horizontal Vertical

0010.Profiles of E-health Businesses.SNUH 41 VERTICAL AGGREGATOR EXAMPLE: HEALTHEON / WEBMD.COM Key Issues Healtheon/WebMD has a first-mover advantage, an attractive service- based business model, an experienced management team, and key strategic partners Substantial increased competition has been posed by established technology companies and fast internet start-ups Execution is in question, due to the rapid acquisition of different immature and untested business models Dependent on a few major partners and customers for large percentage of revenues Source:Company financial report and website, Hoovers, News clippings, Goldman Sachs Description Healtheon:Uses an internet-based information and transaction platform to create Virtual Healthcare Networks (VHNs) that facilitate and streamline interactions among participants in the healthcare industry (i.e., providers, payors, employers, laboratories, pharmacies, patients) Services include enrollment and eligibility determination, referrals and authorizations, laboratory and diagnostic test ordering, clinical data retrieval and claims processing WebMD: Provides physicians with administrative transaction services, medical new s and research, CME credit, customized web sites and e- mail accounts, and career services (WebMD Practice). Provides customers with free health and wellness news and information, support communities, interactive tools, and online shopping (WebMD Health) Value Proposition Community for physicians, health care professionals, and consumers Offers both information exchange as well as support for complex transactions for disparate participants across geographic boundaries Offers freedom from expensive proprietary systems and technology Business Model Revenue primarily generated through: Non-internet, network- based transaction services, development, consulting, and IT management services Software licensing fees Advertising Subscription fees Strategic Relationships Recently acquired Kinetra, pending acquisition of Medical Manager and CareInsite, OnHealth.com See attached pages Company Snapshot Integrated website launched:Nov 1999 Ownership:Public (Nasdaq: HLTH) Industry:Vertical Internet solutions, Internet and Intranet Software Services, Healthcare online content Provider Market cap:$3.5 billion 1999 Revenues:$102.1 million

0010.Profiles of E-health Businesses.SNUH 42 *First quarter, 2000 Source:McKinsey analysis, Hoovers Market cap (in $100 millions) 12356789102035 N/A MARKET CAP RANGES FOR VARIOUS E-HEALTH BUSINESS APPLICATIONS* Specific Business-to-consumer (health products) Business-to-business Online insurance brokering Content Commerce Customer information portals Physician/Healthcare professional services Health plan/Hospital services Aggregate Transaction/practice management services Online patient medical records Online care services Connectivity Horizontal Vertical 4

0010.Profiles of E-health Businesses.SNUH 43 E-health business growth has been driven by the high degree of industry fragmentation, interaction costs and consumer/provider demand A broad range of e-health business have emerged that facilitate efficient interchange of content, commerce and interconnectivity Significant opportunity exists for the development of high value e-health businesses in Korea E-health business growth has been driven by the high degree of industry fragmentation, interaction costs and consumer/provider demand A broad range of e-health business have emerged that facilitate efficient interchange of content, commerce and interconnectivity Significant opportunity exists for the development of high value e-health businesses in Korea KEY MESSAGES

0010.Profiles of E-health Businesses.SNUH 44 Source:McKinsey analysis, Websites, News clippings Select Companies / websites HealthOK, DrCyber, Crezio, Medion, Doctor21, Webhospital, Healthcare, Healthpia, InternetPost, HealthInfo, HealthKorea, DoctorKorea emedicals Carecamp Concentration of e-health activity Kimsonline, MediGate, Opendoctors, MediKorea, Medipark*, Mdhouse, MediNPharm CURRENT E-HEALTH COMPANIES IN KOREA Specific Business-to-consumer (health products) Business-to-business Online insurance brokering Content Commerce Customer information portals Physician/Healthcare professional services Health plan/Hospital services Aggregate Transaction/practice management services Online patient medical records Online care services Connectivity Horizontal Vertical

0010.Profiles of E-health Businesses.SNUH 45 E-HEALTH OFFERINGS BY SELECTIVE HOSPITALS AND MEDICAL CENTERS IN KOREA Source:Websites Hospital/Medical center Kyungpook University Medical Center Hospital/Medical center Service Information Reservatio n Services Health Informatio n Patient Queries Information and services offered Kangnung Hospital, Asan Foundation Kangnam Sungshim Hospital, Hallym University Medical center Kyunghee University Medical Center Ahnam Hospital, Korea University Medical Center Severance Hospital Ghil Hospital, Ghachun Medical University Asan Medical Center Samsung Medical Center Kangnam St. Marys Hospital, The Catholic University Medical Center Hanyang University Medical Center

0010.Profiles of E-health Businesses.SNUH 46 CONTENT CUSTOMER INFORMATION PORTAL EXAMPLE: HEALTHOK.CO.KR Source:Company website, News clippings Business Model Revenue primarily generated through: Advertisement Membership Commission from commerce Online marketing Sales (e.g., through providing internet solutions for pharmacies) Strategic Relationships Connectivity: Oracle, Netro21 Content: Mediservice, Korea Vitamin Information Center, Roche Korea, Cell Biotech Customers: OnnuriHealth (drugstore chain) Company Snapshot Launched: 1/2000 Ownership: SK Corporation Industry: Online healthcare content provider Other:HealthOK is a part of the OKcashbag business by SK Corp Key Issues HealthOK, along with PharmOK, are currently SK Corps main e-health businesses Description Customer-focused health care information Features include: OK Clinic: Information regarding symptoms and treatment for ~140 diseases and illnesses; online health care professionals answer patient queries Healthmall Ask the pharmacist Specific health-related topics (e.g., diabetes, vitamins) Healthfinder: Provides links ~1,800 health care-related sites Clinic and pharmacy directories CyberER Post office

0010.Profiles of E-health Businesses.SNUH 47 CONTENT PHYSICIAN/HEALTHCARE PROFESSIONAL SERVICES EXAMPLE: MEDIPARK.COM Source:Company website, News clippings Value Proposition One-stop internet services for physicians and other health care professionals Provides the latest medical information Provides links to relevant academic associations Business Model Revenue primarily generated through: Advertisement Management/ operations contracts Strategic Relationships Connectivity: Onnet Content and connectivity: 16 medical professional associations Company Snapshot Launched: 3/2000 Ownership: M2 Community Industry: Online healthcare content provider Other: Medipark is a spin-off business of Medison (Korean medical device manufacturer); Majority investors include Medison, Medidas, Onnet, Terasource Venture Capital Key Issues Company admits that the business model of Medipark.com is not to generate revenue but to create substantial network of physicians which can be used for other businesses Description Information portal for physicians and other healthcare professionals Features include: Online library Training, lectures, and conferences Personal member websites E-mail services Customized news Cyber communities

0010.Profiles of E-health Businesses.SNUH 48 COMMERCE BUSINESS-TO-BUSINESS EXAMPLE: eMEDICALS.CO.KR Source:Company website, News clippings Description Medical product distributions and clinical testing service for small, mid- sized hospitals Features include: Product purchasing Inventory management Management analysis Automatic ordering Electronic settlement Online laboratory tests Strategic Relationships Connectivity: Bit Computer, Brain Consulting, Medidas, SCL Exclusive contract with 3M Korea SK Global sponsors MediGate, the online doctors community Company Snapshot Announced:12/99 Ownership:SK Global Industry:Medical products distribution Value Proposition High quality medical products at lower price enabled by integrating telecommunication technology and distribution network Guaranteed quality product/outcome backed by highly recognized SK brand Efficient process management through proprietary program which can be installed to any existing system Possible delivery of products within 24 hours Business Model Revenue primarily generated through: Commission from sales Advertisements Key Issues Catalog information available through website, but customers are required to use proprietary software for services Business is still in the nascent stage of development Currently limited offering with only one manufacturer per product

0010.Profiles of E-health Businesses.SNUH 49 Value Proposition High quality medical supplies at lower prices Business Model Revenue primarily generated through: Advertising Commission Membership fees VERTICAL AGGREGATOR EXAMPLE: CARECAMP.COM Source:Company website, News clippings Strategic Relationships Samsung Corporation, Unitel, Medimedia, Medicamp, Gil Medical Center, Soonchunhyang University Hospital, Hallym University Medical Center, Cha General Hospital, Paik Hospital GE Medical, Medimedia Korea (Vivendi) Company Snapshot Launched: 4/2000 Ownership:Currently private Industry:Vertical Internet Solutions Other:Majority investor is Samsung Corporation with 53%; carecamp.com owns 50% of Medipharm (chain of 1300 drugstores) Key Issues Business is still under development Description Provides B2B e-commerce solutions, as well as health and disease information for physicians Proposed features include: E-marketplace: provides opportunity for hospitals, drugstores, medical wholesalers, and retailers to purchase and sell medical equipment and supplies through auctions Telemedicine: online care services linking members and cyber doctors Cyber hospital: health and disease information accessible to members, physician communities Online shopping: health products and beauty supplies

0010.Profiles of E-health Businesses.SNUH 50 Extensive opportunities exist for E-health commerce and connectivity business in Korea The focus of commerce and connectivity activity should be directed to high value areas, particularly those reducing fragmentation and interaction cost Hospitals/clinics should actively explore concortia opportunities that drive mutual benefit rather than developping me-too solutions Extensive opportunities exist for E-health commerce and connectivity business in Korea The focus of commerce and connectivity activity should be directed to high value areas, particularly those reducing fragmentation and interaction cost Hospitals/clinics should actively explore concortia opportunities that drive mutual benefit rather than developping me-too solutions CONCLUSION

Profiles of E-health Businesses. 0010.Profiles of E-health Businesses.SNUH 1 E-health business...

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