Doctors and WellPoint and Angie's List and Health Care & Life Sciences

Angie's List CEO wanted shot at WellPoint's Zagat deal

October 29, 2007

WellPoint Inc. and Angie's List are both racing to launch doctor-rating services early next year.

But Angie's List is already sour over WellPoint's decision to partner with New York-based Zagat Survey LLC for its doctor-rating service, apparently without talking to Angie's List.

"It's sad to me that we never heard anything from WellPoint even though we sit in the same city," said Bill Oesterle, CEO of Angie's List, which provides customer-satisfaction reports, mostly on home improvement service providers, in 124 cities. "If we're going to have a good entrepreneurial environment [in Indiana], we're going to have to have our traditional large companies looking to local suppliers for services like this."

It's a common complaint in Indiana. Entrepreneurial companies trying to grow fast say Indiana's major corporations--such as WellPoint, Eli Lilly and Co., Simon Property Group Inc., Conseco Inc. and others--routinely shy from young companies or gravitate toward established, out-of-state firms.

For their part, WellPoint officials said the company and its predecessors have a track record of doing business with local law firms, public relations firms, hotels and restaurants for 60 years.

In addition, WellPoint has focused some of its own recent growth on Indianapolis. Just this month, WellPoint opened a specialty pharmaceutical distribution and call center at Indianapolis International Airport that will employ 900 workers by the end of 2009.

"We continue to grow to strengthen Indianapolis," said WellPoint spokeswoman Cheryl Leamon, adding, "We do support local companies here."

Some Indiana groups have tried to address the "buy local" issue formally, gathering corporate decision makers to hear sales pitches from local startups. The now-defunct Tailwind produced good leads for some tech companies, and the newly created Slingshot will try to do the same for startups in all industries.

But the problem still persists, said Steve Beck, a veteran Indianapolis banker and business consultant.

"Is it prevalent? Yeah," said Beck, who is now the Indiana managing director for Illinois-based Geneva Capital Corp. "Around here, because we're more conservative, a lot of the big companies won't buy until somebody else has proven it."

Oesterle is frustrated because he didn't even get to make a pitch for WellPoint's business. The former venture capitalist has run Angie's List since 1999, as the company skyrocketed onto a national stage. Its revenue is on pace to double this year to about $28 million.

"We're as competitive a company as you're going to find in Indiana," said Oesterle, who also managed Gov. Mitch Daniels' election campaign in 2004 and founded a fellowship program to match top college graduates in Indiana with entrepreneurial companies.

Angie's List officials approached "a couple of people" at WellPoint during the past year to discuss a doctor-rating service, Oesterle said, but he did not name those people. Leamon said she couldn't find anyone inside WellPoint who had talked to Angie's List about the project.

"Ultimately, Zagat's methodology best fit our vision for a consumer survey tool that would provide members with the best information possible," Leamon said.

She added, "Zagat's is the world's most trusted source for information about where to eat, drink, stay and play. We believe Zagat's methodology strikes a chord with our members because it is familiar, easy to understand and meaningful to consumers."

A Zagat spokeswoman did not return a request seeking comment. In November 2003, The New York Times reported the company's revenue at $20 million.

Different methods

Zagat's online tool will use patient surveys to score each doctor on a 30-point scale in four categories: trust, communication, availability and environment. It also will feature a comments section, allowing members to share comments to expand on their ratings.

The survey and results will be available for free to customers via their health plans' Web sites. A doctor will not be rated until at least 10 patients report their experience.

Zagat made its reputation by surveying restaurant patrons, beginning in New York City in 1979. It now rates eateries in 85 markets. It also publishes guides for hotels, resorts and spas, family travel, shopping, nightlife, movies, music, theater and golf.

Each survey uses the 30-point scale and asks respondents to rate a company in four categories.

WellPoint has not identified which markets will get its doctor ratings first, Leamon said, though she estimated that 1 million of the company's 35 million customers would have it by March. WellPoint then will roll it out to all customers.

Angie's List compiles its consumer reports at first by conducting surveys. But then it relies on subscribers to keep filing reports on the service providers they hire, which keeps refreshing the ratings.

Angie's List's 600,000 subscribers file about 15,000 reports each month. They give comments and an A through F grade in such categories as price, quality, responsiveness, punctuality and professionalism.

Angie's List is doing its initial surveying of doctors' patients in Indianapolis, where it plans to launch its pilot rating service late this year or early next.

If the service takes off here, Angie's List hopes to replicate it in its other markets, Oesterle said. It might also expand its ratings to other health care providers, including hospitals.

Doctor ratings on the rise

Attempts to rate doctors' performance are proliferating as insurers are pushing them to improve quality and cut costs. Also, the recent popularity of so-called consumer-driven health plans has heightened demands for information about health care providers.

WellPoint has launched pay-for-performance programs in some markets to give doctors bonuses when they improve their patients' health. Insurers have also used claims data to steer patients to certain doctors over others. However, those efforts have hit some bumps recently.

The American Medical Association has claimed that some of these programs favor doctors who are the cheapest, not the best.

Just this month, the New York Attorney General's Office ordered several health plans, including WellPoint, to stop or justify their doctor-rating efforts.

Web-based doctor ratings run the gamut. On one end, Camas, Wash.-based MDNationwide Inc. uses computer analysis to assign each doctor a numerical rating in these categories: academic appointments, hospital appointments, professional reputation, disciplinary history, malpractice judgments, training, education, publications, professional affiliation, board certifications, and experience with specialty.

On another extreme, RateMDs.com is a message-board-style Web site that allows anyone to make comments about his or her doctor. Comments posted about Indianapolis doctors range from effusive praise to, "HE IS NOT WORTH THE SALT HE PUTS ON HIS MEALS."

In addition, many large physician groups, such as Indianapolis-based American Health Network, already survey their own patients on their experiences.

Asked if there's room for more doctor-ratings services, Oesterle replied confidently.

"It's a very big market space at this point," he said. "Our competitors, it's really not going to be Zagat's and WellPoint. It's going to be the traditional vehicles people use to pick their doctors and hospitals."

Source: XMLAr00301.xml
ADVERTISEMENT

Recent Articles by J.K. Wall

Comments powered by Disqus