Trust & Transparency – AMA and Sermo (Part 2)

28 08 2007

Anytime you hear the word “arbitrage” things start to get opaque. And in the world of information selling it can get interesting.

Now we have “information arbitrage” coming to the world of associations where brand integrity and member relationships will be used to attempt to create a “trusted” environment where doctors can collaborate but where the unseen institutional clients gain information access from those collaborations and, in some cases, buy your doctors expertise.

Disclaimer: I worked for a technology company serving associations for ten years. Our company was all about helping associations leverage technology while protecting them from the potential consequences of giving up their brand name and information. We built applications as early as 1998 that helped medical associations create community around certain products. In some cases, clients generated up to $100,000 a year from corporate sponsorships of the site experience without having to rely on an entire outsourced model like the one below. Protection of brand, reputation, and member reputation is critical.

In today’s Wall Street Journal (page D1), you will find further evidence of corporations encroaching on association territory and in some cases in partnership to create a business using online community. In this instance, the business value traded and sold is your doctor’s knowledge and time to participate.

As stated on Sermo’s website: Sermo is entirely free to physicians. We don’t charge the physicians. We also provide a medium which is completely free of any advertising or any outside influence. The way we make money is we create almost an arbitrage between our physician community and our clients. The way our community is structured is that information is able to bubble up, and then our clients are able to very quickly and effectively, through a completely separate product, see that information – albeit anonymized, so they don’t see the actual physician’s names or the physician’s contact information. But they are able to see trend data forming in real time, and indeed, to be able to ask questions of that community.There are several worries here. Read on. billed as the largest online community of doctors (claiming 16,000 prior to AMA deal) has launched a partnership with the American Medical Association earlier this year (see previous post here on initial announcement of this partnership from Dennis McDonald’s blog).

Here are excerpts of an interview with Sermo’s CEO in an interview earlier this year.

Sermo CEO: “You have the American Medical Association, which is among the oldest of the associations in this country, well over 150 years old and the essence of establishment institutions. Then you have Sermo, which is this grassroots – what some people might describe as Web 2.0 – phenomenon. Physicians in all walks of life and all phases of their career coming together and having a voice.

So what Sermo does very effectively is create a place for those people to come together and for those voices to be heard – and then, within the unique Sermo architecture, for specific messages to come out. What the AMA does very well is to advocate for the messages of the physicians. That was the first cornerstone of this relationship: Sermo being a mechanism of allowing physicians to have their voices heard, and the AMA being an organization that’s uniquely suited to act on that voice.”

PT: Notice how reliant and deferential he is to the AMA brand. He knows that to make his business model work they need AMA doctors in their Sermo membership to create the content from the interactivity. My point is why does the AMA need them to create an environment where “people come together, have their voices heard, and send messages out?” In fact, advocacy is not the main purpose of Sermo which is to sell aggregated information to institutional clients of Sermo.

Sermo CEO: “The second aspect of the relationship is a new paradigm in information and publishing. As many people might know, the American Medical Association is a publisher of several of the top medical journals, including the “Journal of the American Medical Association,” or “JAMA.” And then the “Archive” series, including the “Archives of General Medicine” and the “Archives of Surgery.” Through the Sermo relationship, for the first time ever, Sermo members will be able to gain free full-text access of those journal articles, both current and archived versions, through Sermo. This will be free of charge; it will be part of being a Sermo member.The hope is that this will herald a new era in physicians’ being able to contribute to the academic literature and being able to comment in real time on the academic literature.”

PT: Well now… maybe this is great for Sermo members but AMA members need to pay for that service. This new era sounds more like a devaluation of AMA’s membership. If you want to know what is innovative in information and publishing, a good example is Jove (see previous post here).

Sermo CEO: “The third component of the relationship is what you might call a co-development, where Sermo and the American Medical Association will be endeavoring to develop certain technologies for facilitating group discussion and group communication among AMA groups and AMA subgroups.

“…the first thing I think the relationship will get is a way for the Sermo community, in real time, to be able to recognize and respond to what had been static publications. The second aspect of this is another trend. The moment something hits the press, there’s this increasing recognition that it’s almost old news. The idea is, “How can publishing organizations like the American Medical Association better link themselves to the here-and-now concerns of physicians?” Sermo, by its very nature, is almost a bearer of what is of most interest and most concern to the American medical community. And so Sermo can act as a very powerful springboard for those publishing mechanisms to take information and then pursue it further, whether it’s with actual clinical research, editiorialization, or perhaps an in depth article. So it’s a push or pull model.”

PT: Peeling the onion back further, you see that AMA is getting probably free customized technology from Sermo for creating online community of its own. One problem though… exactly which community are AMA members going to spend their time? This is further complicated by those other medical specialty societies who are developing or have developed their own online collaborative presence.

I applaud the desire to create new value in old publishing models by using collaboration but not when it is used to drive a revenue engine of information sold to outside organizations the association has no control over.

Sermo CEO: So, insomuch as AMA is, I think both literally and figuratively, an institutional voice for US physicians, the AMA/Sermo relationship is a mutually exclusive relationship between Sermo and the AMA. Having said that, your point is very well taken that in the last 10 or 15 years, the so called specialty societies – the American College of Cardiology, the American Heart Association, the American Society of Clinical Oncologists – have risen in prominence and now they are ready to enroll in advocating for physicians. And indeed, I think you’ll see some announcements in this space in the very near term. I think it’s important then to recognize, though, that those specialty societies classically advocate for very different things than the AMA has advocated for. So whereas the American Heart Association understandably advocates more towards cardiovascular and heart type issues, or American College of Cardiology has cardiology interests as its first interest, the American Medical Association is the only organization that’s looking out for the overall good and well-being of the physician profession. And insomuch as that’s a key element of healthcare in this country, no one else plays that role. I think to answer your question in summary: yes, we will be making some announcements in that space. But I think it’s also very important to say that we don’t see those as being competitive to what we’re thinking of trying to examine.

PT: He seems to be playing this as an advocacy thing and certainly when you read it you know that the advocacy roles of those societies are pretty well defined. But the problem is one of creating competing communities that can tax a doctor’s time and interest to participate. If the ASAE and Center Decision to Join Study is any indication, you need to be creating experiences that build participation around your own assets in order to create member evangelists. Not so with Sermo’s strategy.

Would you trust this model?

Doctors are paid for posting and even given Amazon gift cards to join. One student doctor said he was getting between $40-100 per month as a result of his postings. Clients (those in the lower half of the Sermo business model diagram below) pay a subscription fee and in return can post questions to the Sermo community. If doctors vote on one of these postings, they may be financially rewarded for “your astute observations.”

Read the actual student doctor posts on Sermo’s paying docs to post here.

Here is a sample of the Amazon gift card.

There are so many open innovation opportunities for creating exciting new business opportunities. This approach seems just wrong.




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