Marketing giants IBM Corp., Microsoft Corp. and Pfizer Inc. have teamed to start Amicore, an independent company that will develop and sell software to physicians—a potentially lucrative and untapped e-commerce audience. New York-based Amicore has geared its software, which streamlines administrative work, mainly for small-practice physicians.
Microsoft will contribute software expertise to Amicore, while Pfizer and IBM will bring medical marketing and technological acumen, respectively. Amicore’s platforms are meant to aid physicians at every step of their business cycle, from patient notes to back-office billing systems.
Microsoft, Pfizer and IBM all have equity stakes, which are not disclosed, in Amicore. All three also have board seats on the new company which has 45 employees, 10 of whom are salespeople.
Amicore is betting that enough physicians—overwhelmed by the flood of paperwork that came with the rise of health care maintenance organizations—will be willing to part with their money for software meant to reduce busy work, and free up more time for patients. It’s a gamble that many start-ups, including WebMD Corp., have taken with very little success.
Indeed, despite the marketing allure of its backers, especially Pfizer, Amicore’s challenges are plentiful, industry watchers said.
Many small-practice doctors are already seething at how HMO payments have chipped away at their incomes, and are reluctant to shell out tens of thousands of dollars for software. "The biggest problem I see is that doctors do not want to spend their money," said Bob Lytle, chief technology officer at Centrifusion Inc., a Chicago-based consultancy.
Also, historically, physicians have proven either unwilling or unable to use many new technologies, and are more than happy to rely on old systems. "Often, they’re [still using] DOS-based [systems]," Lytle said. "The challenge is, can I convince someone to redo their entire system on this stuff?"
Amicore President-CEO Jim Fitzsimmons is confident that his company will thrive. "We’ll be successful where so many companies haven’t because we’re coming to the market with a complete solution," Fitzsimmons said.
He also said Amicore wouldadvertise in medical industry magazines and participate in trade shows.
The company’s potential advantage is the ubiquity of its backers’ brand presence among doctors. Pfizer’s strength notwithstanding, Microsoft and IBM have also made inroads into the physicians’ marketplace, especially in recent years.
Microsoft was attracted to the deal because it believes the small-practice audience is untapped, said Rich Noffsinger, global health care manager at the Redmond, Wash.-based company. "It’s an underserved market, and very diverse and fragmented," he said. About 75% of the nation’s 550,000 practicing physicians work in offices of less than 10 doctors.
IBM believes doctors will eventually start adapting to software technologies, said Russell Ricci, M.D., IBM’s global health care industry manager. It also believes Amicore’s application service provider model will play well with doctors, who won’t need to invest in servers. "All they need is a browser, instead of a CIO [chief information officer]," Ricci said.
Ricci also cited Pfizer’s 8,500-strong sales rep force as a distinct advantage. Pfizer reps will introduce Amicore’s reps to doctors, and provide collateral marketing efforts as well. "This way, [Amicore’s] not a shabby brand."