Page 2 of 2 Previous

Continued: cuts jobs, changes strategy

  • Article by: CHEN MAY YEE , Star Tribune
  • Last update: November 11, 2008 - 9:24 AM, a Twin Cities start-up that drew national attention for its efforts to create an online medical marketplace, has cut 25 jobs, or a quarter of its workforce, a sign that consumers may not be ready for the trend known as consumer-driven health care.

Bloomington-based Carol has struggled to attract users to its year-old website, which it bills as a Travelocity for health care.

Medical providers never got comfortable with the idea of posting their services online for comparison shopping and consumers "didn't know what to do with us," said Carol's chief marketing officer, Marcia Miller. The economic downturn and the pressure to produce results finally forced a shift in direction.

The staff cuts were across the organization, Miller said.

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.

"We are taking a step back," Miller said. Carol will now concentrate on "how do you engage at an earlier level and how do you do something that isn't threatening."

CEO is a pioneer in the field

Carol's chief executive, Tony Miller, is a nationally known evangelist for consumer-driven health care, a movement based on the notion that patients empowered with the right price and quality information will shop for health care the way they shop for airline tickets. In 1999 Miller founded Definity Health, a pioneer in the field of health reimbursement and savings accounts, now owned by UnitedHealth Group.

Carol raised just under $30 million from Lemhi Ventures, also headed by Miller.

Carol attracted excitement and skepticism in equal measures and was closely watched by health reformers around the country as a model that might be replicated elsewhere. As the company grew, it moved from an office in Plymouth to a bigger space in Bloomington.

The theory was that the growing number of people with high-deductible plans and health savings accounts would be motivated to shop for care, and that ensuing competition would lower prices and raise quality. HealthPartners and Park Nicollet Health Services were among the early participants. But the company never succeeded in attracting a critical mass of either sellers or buyers.

In September, Carol said it would start offering health care packages -- diabetes care for a year, for example -- directly to employees of some of the biggest self-insured companies in Minnesota.

Marcia Miller said the company wasn't running out of money yet and had enough cash to roll out its new strategy.

But, she added, "We need to prove the business model faster and ramp up the results."

For a time earlier this year, advertisements were ubiquitous around the Twin Cities. Billboards blared: "You shop for this [a necktie]. Why not this [a stethoscope]?"

The why not, as it turned out, was people were simply not ready.

Chen May Yee • 612-673-7434

  • related content

  • Citigroup to help at-risk borrowers stay in homes

    Tuesday November 11, 2008

    Citigroup says it is imposing a moratorium on most foreclosures as part of a series of initiatives aimed at helping at-risk borrowers remain in their homes — making Citi the...

  • Our troubled economy

    Friday April 1, 2011

    Counselors at job placement agencies -- government and private -- across Minnesota are talking about more temp-to-hire placements that "never get around to the hire part."

  • Aides: Obama suggested more help for auto industry

    Tuesday November 11, 2008

    President-elect Obama suggested to President Bush that the administration immediately provide extra help to struggling U.S. automakers, aides to the Democrat say, in their first face-to-face meeting since Election Day.

  • Oil falls to $60 as China spending optimism wanes

    Tuesday November 11, 2008

    Oil prices fell to near an 18-month low of $60 a barrel Tuesday as hopes waned that a huge Chinese spending plan will do much to avert a prolonged slowdown...

  • Russia's Medvedev urges banks to act responsively

    Tuesday November 11, 2008

    President Dmitry Medvedev urged state-funded banks to "act responsibly" Tuesday, the latest comments by top Russian officials warning that banks might be abusing the government's billion-dollar bailout.

  • British retail sales fall for 1st time since 2005

    Tuesday November 11, 2008

    British retail sales fell for the first time in three and a half years during October as consumers tightened their belts in a sagging economy, while the number of house...

  • get related content delivered to your inbox

  • manage my email subscriptions





Connect with twitterConnect with facebookConnect with Google+Connect with PinterestConnect with PinterestConnect with RssfeedConnect with email newsletters