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Sermo's twist on social networking

October 14, 2007

Sermo, the rapidly growing social network for doctors, gets a shot in the arm Monday when it announces a partnership with drug giant Pfizer. Sermo is one of the more interesting commercial implementations of the social networking concept. The doctors who join the service - and more that 30,000 have already signed up - use it to discuss diagnoses and treatments with their peers. The site makes money not through advertising - which it believes would be anathema to physicians - but by letting paying clients like investment firms and drug companies "listen in" on the doctors' conversations. As an incentive to its members, the site pays doctors $100 for highly rated postings.

For Pfizer, Sermo offers the potential for a new and relatively cheap means to learn from and influence the doctors who prescribe its pharmaceuticals. Reports the Wall Street Journal:

Facing financial pressures as some of its best-selling products lose patent protection, Pfizer is looking for more-efficient ways to reach the doctors who prescribe its medicines. Pfizer-affiliated doctors will be able to talk candidly with [Sermo's] members, potentially giving the company insights into prescribing patterns and a way to show doctors data on its drugs.

It's also a risky move, the Journal notes, both for Pfizer and for Sermo. The partnership will likely be scrutinized by regulators and politicians, and it may raise the hackles of doctors who "are wary of undue industry influence on their profession." As a broker of sensitive information, Sermo has to tread a very fine line between the interests of its members and those of its clients.

Nevertheless, it's interesting to think about the broader implications. Sermo's early success is sure to focus attention on a business model that may become increasingly popular as social networks are established for professionals and other specialized groups. In the Sermo model, what the operator of a social network sells is not the eyeballs of its members but their ideas, observations, and conversations. In the long run, it's not inconceivable to think that social networks' privileged ability to harvest valuable information may be their most lucrative asset. If that's the case, closed, exclusive networks may turn out to be more valuable than open ones - both for their users and for their owners.

Comments

Posted by: SallyF [TypeKey Profile Page] at October 15, 2007 01:37 AM

I'm trying (in vain, I think) to figure out what value to the physcians is added by the "social network" angle.

The docs could share, say, a walled-garden mailing list and plain 'ol wiki, charging admission to listen in, and all of the same benefits could be obtained. Why must the docs also enter DB entries listing their "friends", "colleagues", or whatever social graphing (aka marketing demographic data) is involved here?

What, between the 30K of them they couldn't affort o host a few mailing lists and wikis?

-t

Posted by: Tom Lord [TypeKey Profile Page] at October 15, 2007 02:46 AM

I fail to see how Sermo can help doctors or medical students. It seems like it could be a huge time suck for people who already have high demand on their time. But I can easily envision how it could be a big money generator for attorneys policing HIPPA violations.
But perhaps this is the inevitable evolution (devolution?) of medical information systems. In a few years, all the kids entering medical school will want to play the new "World of Pfizercraft" where they can gain the ability to cast a +10 Spell of Pharmaceutical Healing by viewing commercials for Pfizer drugs.

Posted by: Charles [TypeKey Profile Page] at October 15, 2007 07:31 AM

Social relations among physicians were the first one to be studied, and they are strong, necessary and interesting to follow. I don't really care for a handsome physician, but I do want to have one that is well-connected enough to know about the best options available, so the SNS makes perfect sense to me; similarly, drug companies want to answer the questions that a majority of the physicians are asking.
Regarding the business model, I think that a company should be a place where their costs and revenues are not exactly aligned — otherwise, it could be replaced by a marketplace; that way demands the company funders to make a statement about what is good at least on one side, and refuse “aligned” models such has having the Drug companies money going to the physicians that encouraged their drug, not the most influential one.

Posted by: Bertil [TypeKey Profile Page] at October 15, 2007 08:53 AM

On a related matter, I found it interesting that some doctors and nurses still think that the number of their state-issued license to practice in their field is somehow a secret. Here in California, when you look up a professional in a regulated industry (lawyers, CPA's, architects, etc) in the Yellow Pages, some list their license number. It seems that doctors use to cite their license number as verification when calling in prescriptions for a patient. For that Kaiser link, you can browse to an individual physician (BTW: the general practitioners who act as the primary care physician are listed under "Internal Medicine"). You can then visit the Dept. of Consumer Affairs web form for doctors, type in the name and get the license number. In other words, regulatory transparency already exists, but it is not very obvious to most consumers.

On an extra level of "transparency", when I used to visit my local Kaiser hospital for my annual check-up, I wondered about the social implications have having a mashup with a floor plan of the hospital (there are maps at the elevators diagramming egress from the building) and then mapping all the docs to where they work in the building. The whole building would, in a sense, become transparent and much less mysterious. If you browsed through such a mashup and then went in for your next check-up, you would start to recognize docs that you had never met in real life. It would be a little like going down to Hollywood and running into a lot of minor movie stars who appreciated running into fans out in public. In a sense, it would be like visiting a small town where you knew almost everybody through not six degrees of separation but maybe only two.

Posted by: SallyF [TypeKey Profile Page] at October 15, 2007 05:47 PM

Don't get hung up on the "social network" moniker. Sermo is more like physicians-only forums than the MySpace/Facebook social network that you're thinking of. Discussions are built around topics and the business value is built into the "chatter". The social aspect reinforces expertise, ie. a family physician is more likely to trust the info and opinions of a dermatologist over a family physician peer.

The killer feature for physicians is the ability to tap into walled knowledge. I heard a presentation by Sermo's CEO, Daniel Palestrant, and he related the story of a discussion thread where a ER physician asked about the best way to remove a serrated knife that went through a person's palm. The ingenious solution provided by a doctor at the other end of the country was to slide a metal shim around the blade and then slip the serrated blade through. In another instance, we expect our physicians to be knowledgeable about all the latest treatments for most doctors, knowledge about cutting-edge treatments lags because research and publication takes years. Yet a physician at a leading facility can relate his experiences and results with new treatments to distant peers years before the first results get presented. It's hard to say how it will pan out but it will certainly be interesting to watch how this maneuver will affect Sermo's user base and revenue model.

Bringing manufacturers into the fold presents a real dilemma. Whereas physicians could previously discuss in the open about current research and techniques, knowing that at worst their discussions would only become part of aggregate anonymous data to Sermo clients, physicians are now talking with their employers listening in. Imagine how your conversation around the water cooler would change if your bosses were standing behind you taking notes. At the same time, it becomes hard to judge whether advice you receive from a manufacturer-affiliated physician is biased. The element of bias was always present but it's a lot easier to detect a shill than a physician with a lawyer standing behind him.

Posted by: Pat [TypeKey Profile Page] at October 22, 2007 04:21 PM

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