Carol.com Downsizes, Revamps Strategy

Back on February 5, 2008, I posted an article in this space with the headline: Carol.com Understands Healthcare Consumerism and Transparency. I was very excited about the new website Carol.com and how its creators – consumer-directed health care advocates formerly with Definity Health – wanted to do for health care what Travelocity did for airline tickets.

The concept was simple. Here it is as described in an article in the StarTribune.com:

Ankle pain? Click on the matching body part and two options pop up. For $199, doctors at Sports and Orthopaedic Specialists will check out your ankle, review your medical history and recommend treatment. TRIA Orthopaedic Center lists a similar package for $213 – and a reminder that they are the team doctors for the Vikings and Timberwolves. What did patients think? Read user reviews. Will your health plan pay? Tap in your details and find out.

In February, I wrote how I thought that Carol.com was consumerism and transparency delivered in a way that a layperson can understand and at a price point where it makes sense for an individual to spend some time shopping around. I pointed out that not too many people ever tried booking their own flights on the green screens of the old Saber System. Nor did they shop for the best fares when there was a travel agent (insert insurance carrier) sitting between them and the information. I also pointed out that this was an example of how innovation in health care is not going to be driven by the big carriers and the big health care providers. (Should I have added big government?) It will come from small entrepreneurial groups like the team that created Carol.

So, it was with some regret that I read today that Carol has cut 25 jobs, or a quarter of its workforce, and is revamping their strategy. The Star Tribune reported that, despite aggressive advertising, the Bloomington, MN-based Carol has struggled to attract users to its year-old website, and that medical provider never got comfortable with the idea of posting their services online for comparison shopping.

The newspaper reported that Carol’s two consumer websites — in the Twin Cities and Seattle — will remain up. But the company will now focus on consulting and software services aimed at hospitals, clinics and physicians. It will help providers repackage services in ways patients can understand, rather than in the current system organized around insurance payments. It may also rent the Carol software platform for hospital and clinic groups to include on their own websites — backing off from the original goal of allowing users to compare directly among providers.

It is a shame that such a well conceived and well financed ($30 million in seed money) was not successful in getting us to think differently about how we purchase healthcare services. But as Carol’s chief executive, Tony Miller told the Star Tribune, “We are taking a step back.” He said that Carol will now concentrate on “how do you engage at an earlier level and how do you do something that isn’t threatening.”

Sometimes we forget that we need to crawl before we walk. To expect that providers would suddenly get how to package and price their services for retail and that patients would readily become consumers might, in retrospect, have been kind of a stretch. The good news is that the management of Carol realized their mistake before the money ran out and have been able to make a course correction. The vision is still clear, but now it is with the realization that everyone involved in this value chain needs some time to get themselves up the learning curve.

One thought on “Carol.com Downsizes, Revamps Strategy

  1. Martin,
    Great analysis and thanks for highlighting the adoption issues Carol ran into.

    We all need to realize a system that grew over 40 years won’t change overnight and that we need to build trust with consumers with small steps before they’ll take a leap of faith.

    Its one of the reasons why HealthShoppr (launching in a few weeks) is starting in wellness for our system of booking healthcare appointments (we’re starting with massage therapists and personal trainers). Building trust in comparing providers with simple, everyday services will be important in order to earn the right to help at times of extreme stress and consequence.

    For those interested, we’re looking for beta testers…please check us out at http://www.healthshoppr.com

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