Day Two of this event focused first on how physicians are using the web. CEO Daniel Palestrant from Sermo gave a compelling overview of how his company is becoming the dominant player in the physician online space. In contrast to the consumer-focused search and portal sites that I commented about in my previous post who are still competing to earn the trust of Internet health seekers, Sermo appears to have won the trust game with US physicians.

Sermo announced a new partnership with Bloomberg the day before at Health 2.0, and that they expect to break the 100,000 mark of physician registrations by the time the rest of us eat our holiday turkey dinner next month. What’s exciting to see about Sermo, among other things, is the deep level of engagement from their physician user base. Physicians are finding value in connecting with other colleagues around the country, engaging in the community, providing second opinions and collaborating on various issues.

Palestrant continues to challenge the status quo, announcing a new pricing model that will go into effect in the weeks ahead for Sermo’s CME offering that should threaten traditional approaches by other companies in that arena. The smart money from pharma should continue to flow in their direction.

RJ Lewis of e-Healthcare Solutions did a nice job moderating the discussion in the afternoon, addressing online spending and leveraging social networks for consumers. His comments about pharma’s uncertain – and perhaps underwhelming – approach to online marketing raised the prickly issue of proving ROI. Several pharma managers expressed frustration about this issue, noting the perceived lack of a clear ROI remains the key reason that limits their spend from senior management.

RJ noted an AdAge study that revealed how pharma over-indexes in both TV and print (as compared to the CPG industry), with more than 90 percent of media dollars going to those two channels. However, pharma spends less than half of what other industries do in the online space. The irony here is that the web is arguably more measurable.

The topic of how to measure ROI is certainly not new. It’s a reasonable question, of course, and one that must be asked. But is it also safe to say that this question may often be a diversion based on an underlying issue of risk avoidance in our highly-conservative industry?

What if the year-end bonus for the brand manager – or even for the entire senior leadership team, for that matter – was tied to “testing new ideas” and sharing what was learned as a result inside the organization? Should it be? What affect might that have on innovation in pharma? I’d love to see that model embraced, and I’ll bet that many brand managers would welcome it, too.

We’ll probably hear more about this issue next week at the DTC Perspectives annual fall meeting in New Jersey.

Photo by bensheldon

Today was Day 2 at Health 2.0 in San Francisco, and the overwhelming theme for me at the conference was this: it feels a lot like it did eight years ago.

In many ways, I am impressed with the number of companies that are all focused on the same goal of improving the way people consume healthcare and related information. Many more start-ups and early stage companies presented again in the standard, rapid-fire demo mode, where each company has less than four minutes to make their pitch. While this does allow for greater awareness of some of the new companies out there, it all starts to sound the same after a while.

A lot of companies talked of significant traffic to their sites or to their communities – but I had to wonder if in fact all of this traffic is coming from the same people, continuing to search many websites, hoping to find the answers or feedback that they want to hear.

A colleague of mine had an interesting insight: that the experience for a consumer to search for information online happens as a very intimate moment. If you or a loved one was just diagnosed with a serious disease, you will likely then turn to many websites to find answers and seek hope.

So where do you place your trust?

The thing is, there is no trust yet of a significant scale. As I said yesterday, Google is doing a great job to build that trust – they are the go-to place to start almost every search query, health-related or otherwise. This points to the great opportunity ahead. It is a wide open space now with many companies trying to create a brand, and become integrated into people’s lives when it comes to helping them understanding healthcare.

And that’s why it feels like it did during the Internet boom of 2000 – lots of companies, all chasing the same dollars, trying to carve out ownership of a vertical or space, each offering the same type of service solution. In time, most companies went out of business, there was a lot of consolidation, and a couple of big players paved the way.

Chances are, history will repeat itself. The reality is that the ad-driven revenue model just can’t sustain all of these new companies, and just about all of them depend on ads to survive. Furthermore, click through rates will continue to be extremely low such that companies will need to find alternative revenue streams to stay afloat.

One company did stand out for me today. Wellsphere has a Google-like interface that makes search really user friendly. Results are organized according to type, so it is easy to see if results from your search on a topic come from a blog, a journal article, a community, etc. It is one of the nicer user experiences I’ve seen to date, and worth checking out, and possibly the site that earns our trust.

Amidst all of the hype of what’s to come from Health 2.0 tools, I was a bit surprised that few companies spoke directly to the pharmaceutical companies, offering solutions for them that matter. With so much emphasis on the improvement of patient lives, it was odd to me that more energy is not being spent from these smaller start-up-like companies on building meaningful partnerships with large manufacturers by offering unique value.

I’m heading back home to Boston tonight and look forward to seeing how the vibe differs at the Eye For Pharma conference on Friday.

This is the 2nd year of the event, and there are close to 1,000 people here, with representation from pharma, biotech, VC firms and investors, agencies, and reporters.

The purpose of the conference is to showcase the evolution of the healthcare space in general, thanks to the proliferation of various web 2.0 tools available.

There were plenty of demos from big players and small ones, and everyone in general is quite bullish on where things are headed. There seems to be a general consensus, however, that these are still early days, with much innovation and greater adoption ahead.

Clay Shirky gave a great keynote address, helping us all see the power that can come from individuals and their web-based tools of empowerment. His book “Here Comes Everybody” looks like it is worth the read.

Google Health is clearly on a path towards success. They outshined Microsoft, Aetna, Yahoo, and WebMD with what they are building, and the smart money remains with the big G. Look to them to make the personal health record a reality – and soon – and it will be a tool that finally makes sense for the consumer to use with ease. Of course, this will also make sense for Google, as they will figure out the right way to monetize this with the series of other free tools that they offer. Which is why they are Google. And which is why they will win. They have the creative license to succeed where the other guys will fall short.

Sermo and PatientsLikeMe stood out as leaders in the pack of Health 2.0-companies, both are now a couple of years into their business model, and both doing well. They are challenging the status quo, and should be applauded for their good work thus far.

Much discussion centered around patient communities, The Long Tail, and search. Organized Wisdom proved that they are on to something, and I suspect they will remain a strong player in vertical search in the coming years.

Edelman released a new report today that explores consumer attitudes towards healthcare and information. You can access the full report here. Of note, friends and family rank as the #1 source for health information, more than a physician (69 percent vs. 65 percent). Amazing…

Stay tuned for more highlights from Day 2, coming tomorrow.