Who says consumer websites are dead? Maybe you don’t need the ridiculous traffic of, say, Seattle-based Cheezburger Network (LOLcats) to survive on advertising revenues. Maybe user-generated content around a targeted niche, especially where there are purchasing decisions being made, can work well after all.

That’s the sense I got after talking with Tom Seery, the founder and president of Seattle-based RealSelf. Launched in 2006, RealSelf.com provides information about cosmetic treatments in an online community format that includes user reviews, doctor listings, and expert advice from cosmetic surgeons, dentists, and dermatologists. The treatments in question—a multibillion dollar market worldwide—run the gamut from nose jobs and tummy tucks to orthodontic braces and breast implants.

RealSelf is particularly interesting because it sits at the intersection of a number of fast-growing (but also challenging) areas for startups—social and community review sites, health 2.0, and ad-supported media sites. The company has gained some traction, growing 150 percent year over year in Web traffic; it now gets more than 700,000 unique visitors per month, Seery says. In terms of local startups with a similar strategy for capturing niches of Internet content (but these are not competitors), I’d mention Avvo, TeachStreet, Raveable, Redfin, Urbanspoon, and Zillow.

Like most promising startups, the story of RealSelf began with some important personal and business observations. Seery was a longtime employee of Bellevue, WA-based Expedia (NASDAQ: EXPE), and he saw the competing startup TripAdvisor plug away at hotel reviews and other user-generated ratings until 2004, when IAC (which then owned Expedia) had to buy it. “That was the ‘aha,’” Seery says. He thought, “Where else can we take this empowerment of consumers?”

Around the same time, Seery’s wife was researching a laser cosmetic treatment, and was having a hard time finding trustworthy reviews. So he thought, “Let’s create TripAdvisor for the cosmetic space.” The key adjustment he made was to introduce medical experts to the user community. The challenge there, as with most e-health sites like WebMD and Revolution Health, is that doctors are …Next Page »

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Several of New England’s life sciences firms had good news to report this week.

—Ryan gave a run-down of the key insights to emerge from our Xconomy Forum on pharma innovation. Sirtris CEO Christoph Westphal, for example, offered insight into one of the biggest biological mysteries around the Xconomy office: how Luke manages to eat so much and stay so thin.

—Cambridge, MA-based Gloucester Pharmaceuticals won FDA approval for romidepsin (Istodax), a treatment for a rare cancer called cutaneous T-cell lymphoma. Gloucester expects to begin marketing the drug in January.

—Noah Beerman took the reins of RXi Pharmaceuticals (NASDAQ: RXII), a developer of RNA interference drugs. Previous president and CEO Tod Woolf will remain on the Worcester, MA-based company’s scientific advisory board.

—Lexington, MA-based Concert Pharmaceuticals started human testing of an anti-HIV drug called CTP-518. Reaching the milestone will trigger a $12 million payment from Concert’s partner, GlaxoSmithKline.

—After announcing earlier this year that it was considering strategic options, including a sale, Cambridge-based Helicos Biosciences (NASDAQ: HLCS) took itself off the block, citing “improving standalone prospects and its current market valuation.”

—Cambridge-based Ironwood Pharmaceuticals inked a $75 million-plus deal with Japan-based Astellas Pharma. The agreement gives Astellas rights to market Ironwood’s lead drug candidate, the constipation treatment linaclotide, in Japan, Indonesia, the Philippines, Korea, Taiwan, and Thailand.

—Aileron Therapeutics, also of Cambridge, published research in the journal Nature indicating that its “stapled peptide” technology can be used to block the production of a protein called Notch that’s implicated in uncontrolled growth of cancer cells. Luke put the news in the context of Aileron’s efforts to develop drugs that hit previously unreachable targets.

—Ryan checked in with Cambridge-based electronic health records provider Dossia. After launching to much fanfare in December 2006, the non-profit is making slow progress in getting its system adopted, but it has recently solidified its leadership team and made other changes it hopes will help.

—Cambridge-based Alnylam Pharmaceuticals (NASDAQ:ALNY) announced the formation of an internal group called Alnylam Biotherapeutics focused on applying the company’s RNAi technology to increase the output of biomanufacturing processes.

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American Well, the Boston-based company that provides a Web-based system in use by several large health plans to let their members consult with doctors over the Internet, has raised $10 million in new equity funding, according to a regulatory filing today. The documents don’t name the funders in the round, continuing the company’s track record of secrecy around the amount of financing it’s raised and the identities of its investors.

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The role of information technology in healthcare reform is such a huge, sprawling topic that it’s hard to make any real progress in just an hour or two of discussions. Yet that’s just what transpired at a stellar event last night called “Healthcare-IT—Innovations That Will Transform Healthcare Now and in the Future.” It all took place at the Herban Feast in Sodo Park, South Seattle, and it was organized by the Washington Technology Industry Association.

Over some fancy appetizers, a distinguished panel of technologists, executives, and entrepreneurs debated everything from the technical and cultural issues of privacy and security in electronic medical records to who’s going to get a piece of the $19 billion in federal stimulus funding for digital healthcare; everything from whether consumers really want e-health enough to drive regulatory changes to—and this was particularly interesting to Xconomy—what the real opportunities are for startups in the space. The panel showcased some of the first-rate expertise we have here in the Seattle and Portland regions.

Moderator Joel French, the founder and managing director of Nephalios Group, a management consultancy, kicked things off by saying the whole healthcare debate boils down to four things: a cost problem, quality variability, access and coverage, and wellness. In each of these issues, IT plays an important role. “You can’t really share information if it’s not digital,” French said.

With that, it was open season on the panelists:

—Henry Albrecht, CEO of Bellevue, WA-based Limeade, an online health and productivity startup making software-as-a-service for employers (we reported Limeade raised money in July).

—Carla Corkern, CEO and chairman of Bellevue, WA-based Talyst, a company that makes software and systems to help pharmacies manage medications in hospitals and long-term care facilities (we reported on Talyst’s broader strategy and funding in June).

—Luis Machuca, CEO of Hillsboro, OR-based Kryptiq, a maker of collaborative software that lets healthcare providers share information with patients, labs, and physicians (we’ve reported on some of Kryptiq’s deals and customers, including NASA).

—Mohan Nair, executive vice president and chief marketing executive of Oregon-based Regence, the largest health insurer in the Northwest (he has a background in tech entrepreneurship).

—Michael Raymer, global market strategist and general manager for Microsoft’s Health Solutions Group (we’re reported on HealthVault, the company’s Web platform for medical records).

For the next hour, some tough questions flew out from the audience, and among the panelists. Here are my takeaways from the discussion:

1. “The magic pill is data liquidity.” That was from Luis Machuca, who argued that patients need to be able to own and access their own digital health information and use it to get better healthcare. “Universal health will fail, everything will fail, if we don’t have data liquidity and digitization,” Machuca said.

2. An open market, human behavior, and connectivity are important too. Nair argued that the present closed marketplace for healthcare services encourages entitlement instead of earned rewards. Albrecht noted that we should pay more attention to behavior, and less to technology. Raymer added, “Data liquidity needs to be coupled with tools to empower people to make changes, and connect people together.”

3. If you want better healthcare, go to jail. “We see the best compliance for …Next Page »

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If you’re the kind of person who needs a little help remembering to take your prescription meds, Cambridge, MA-based Vitality might have just the technology you need. It’s a wireless, Internet-connected medicine bottle cap that blinks and plays a tune when it’s time to down your pills.

The company’s “GlowCaps” system, which goes on sale today for $99, is designed to appeal to baby boomers looking for ways to keep their aging, forgetful parents out of expensive nursing homes or assisted care, says Vitality founder and CEO David Rose. But eventually, users might not have to pay for GlowCaps at all, because Vitality thinks the technology will also appeal to health insurers—and to pharmaceutical companies that want to recover the billions they lose in revenues when prescriptions aren’t used as directed or refilled on time.

The GlowCaps system is available exclusively through Amazon. It’s intended for people with hypertension, diabetes, and other chronic problems that can only be controlled through regular daily medications. In one beta test involving 50 Boston-area residents, Rose says, the system prompted patients to take their medicines on schedule 86 percent of the time, compared to the average adherence rate of about 50 percent.

And that’s bound to interest a couple of big constituencies. “There are really two primary customers for our company,” says Rose. “One is pharmaceutical companies that want to sell 25 pills a month rather than 15. If you’re a company like Novartis and you have a $2.5 billion drug like Diovan [a blood pressure medication] and it costs $4 a pill, that’s a lot of revenue you should be getting.” There’s also plenty of literature, Rose says, showing that high adherence rates lower the overall cost of care. “The other path to market, then, is the companies who pay for healthcare—both insurance companies and large self-insured employers.”

For now, though, Vitality is trying to build a market beachhead by selling the GlowCaps system directly to consumers. Inside the box are three components—a GlowCap, a reminder nightlight, and a small Wi-Fi router.

The GlowCap is the key component. It fits on top of a standard plastic pill bottle, and contains an LED light, a tiny sound chip, a wireless chipset, a watch battery, and a sensor that can detect when the bottle is opened. Most of the time, the LED emits a cool blue light, but when it’s time to take a pill, it switches to a pulsing orange light and plays a little electronic ditty. If the bottle isn’t opened, the ditties get longer and more insistent.

After two hours, the cap sends a wireless message to the patient’s home Wi-Fi router, which relays it to Vitality’s servers via the Internet. (For the system to work, the user’s household needs a broadband Internet connection with an available Ethernet port—and obviously, the cap needs to be within range of the router.) Vitality’s system can then initiate an automated phone call to remind the patient to take their medicine.

Vitality keeps records of each time the GlowCap is opened, and uses this information to produce a weekly “adherence report” that can be e-mailed to the patient or an appointed caregiver or loved one. The data can also be shared with doctors via online personal health record systems like Google Health, Microsoft HealthVault, and Dossia.

Then there’s the nightlight, which plugs into a kitchen or bathroom outlet and connects wirelessly to the router. It shines orange or blue in synchrony with the GlowCap, providing an extra reminder.

The whole system is about creating “persuasive feedback loops” that start with unobtrusive lights and electronic sounds, and escalate to …Next Page »

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Todd Park, co-founder of Watertown, MA-based Athenahealth (NASDAQ: ATHN) and San Mateo, CA-based Maria Health, has been tapped to serve as chief technology officer of the U.S. Department of Health and Human Services, Athenahealth announced. To satisfy government requirements, Park will resign this month from his post on the board of Athenahealth, a provider of  Web-based tools used by medical practices to managing billing, electronic medical records (EMRs), and other functions.

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Phase Forward (NASDAQ: PFWD), the Waltham, MA-based maker of software used by pharmaceutical companies to manage data collection and analysis during clinical trials, said today that it has acquired Indianapolis, IN-based Maaguzi for $11 million in cash. Maaguzi operates a Web-based service used to collect data reported directly by patients. Phase Forward also reported today that its second-quarter revenues of $52.5 million were up 29 percent over Q208 levels.

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When Merck recalled its arthritis drug Vioxx on September 30, 2004, Connecticut-based online pharmacy FamilyMeds wasted no time notifying customers. Within three hours after the recall was announced, an automated telephone system began calling Vioxx users to inform them about the change. But there was a twist—to comply with the federal healthcare privacy law known as HIPAA, the system had to verify that the person on the other end of the line was actually the patient taking the drug. If the answer was yes, the system would go on to explain the recall. If it was no, the system would leave a phone number and passcode so that the patient could call back later.

That kind of interactive voice response technology is all fairly standard today—but in 2004 it was brand new. The company that made it possible was Burlington, MA-based Silverlink Communications. And from this single application—HIPAA-compliant automated phone communications—Silverlink has since built a major consulting and service operation designed to help healthcare providers reach patients with behavior-related messages of all sorts.

Say a big health plan with millions of members wants to nudge members who take a certain drug toward buying a new, cheaper formulation at twice the dose, then splitting the pills before taking them. Silverlink can not only figure out the most cost-effective way to convey that message, but it can follow up by combing pharmacy claims data to see how many people actually switched.

Though I first met Silverlink CEO Stan Nowak at a local conference on “Health 2.0,” the movement to apply Web-based automation and communication to many aspects of the healthcare system, Silverlink doesn’t fit snugly into that category. The company is really about two things: communication—via whatever mechanism, even the old-fashioned telephone or snail mail—and analytics, to find out what effect each message is having and craft more effective ones.

Because Silverlink’s customers have so many customers of their own, the company is able to package each message in many ways, deliver the variants over many channels, and quickly determine which combinations are most effective for each group. For example, if you want to encourage members who are in the 40-to-55 age group to switch from name-brand drugs to generic ones, is it better to emphasize the cost savings, the convenience, or the fact that everyone else is doing it (in other words, applying a bit of peer pressure)? “Effectively, we’re running multiple simultaneous controlled experiments at scale across populations and measuring the results within microsegments of that population,” says Nowak. “It works in a dramatic way to improve communication yields”—meaning real changes in patient behavior.

Founded in 2002, Silverlink has about 100 employees, and has increased its headcount by 40 percent in the past year. The company has raised about $14 million in venture backing, including a $2.1 million Series A round in 2003 led by Sigma Partners, a $5.6 million B round in 2004 led by HLM Venture Partners, and a $6 million Series C round in 2006, also led by HLM. Kaiser Permanente Ventures, the investment wing of the giant California HMO, joined for the C round. Customers include the nationwide health insurer Aetna and leading pharmacy benefit manager Pharmacare. The company doesn’t share financial figures, but it does say that 2008 revenues were up 47 percent over 2007, and that it recently passed the 200 million mark—meaning that many healthcare consumers have received communications administered by Silverlink.

Nowak says Silverlink’s market is still growing, thanks to some big, long-term shifts in the way health insurance works. “The role of the consumer in healthcare has expanded pretty dramatically since 2003, and looks to expand even more as we …Next Page »

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The idea that a computer authentication system might be watching not just for the content of your username and password, but to the way you type them—that is, the exact amount of time your fingers linger on each key, measured to the millisecond—may sound a little spooky. But that’s the premise of Delfigo Security’s new “DSGateway” software, introduced today. The company says its biometric verification and fraud detection technology could transform the way large organizations manage computer access, perhaps permanently eliminating such awkward contrivances as the one-time password tokens that many corporate employees must carry everywhere in their pockets or on their keychains.

In a second announcement today, Boston-based Delfigo also revealed the identity of its first paying customer: the cardiology department at Boston’s Children’s Hospital. The department will use the system to control access to a new patient record management system that it plans to extend to a number of partner hospitals and clinics, according to Ralph Rodriguez, Delfigo’s founder and CEO. James Lock, the chair of cardiology at Children’s, said in the announcement that Delfigo’s technology meets the department’s needs for security and compliance with privacy regulations “while integrating into our current technology.”

Indeed, the whole point of Delfigo’s system is to provide what computer security professionals call “multi-factor authentication”—identity verification measures that go beyond the traditional username and password—without forcing users to adopt additional technologies such as tokens, fingerprint scanners, and the like. The Children’s cardiology department “experimented with everything from physical tokens to digital certificates to proximity cards, but they all broke down for a variety of reasons, one of them being ’supply chain’ issues when someone loses their token or card,” Rodriguez tells Xconomy. “We went in and showed them that we could, in fact, tell two things: one, we can know that it’s you logging in, but we can also know if someone else tries to use your password.”

Delfigo opened last fall with venture backing from Stage 1 Ventures in Waltham, MA. Rodriguez is an inventor and serial entrepreneur who was formerly chief security officer at Burlington, MA-based Excellon Corporation and chief technology officer at Chelmsford, MA, semiconductor automation firm Brooks Automation. He says he’s been developing the company’s proprietary keystroke measurement technology for several years, putting on the finishing touches while working as a research fellow at the MIT Media Lab under renowned artificial-intelligence expert Marvin Minsky.

Here’s how Delfigo’s system works: Delfigo adds a bit of Javascript code to the Web page for an organization’s login screen that listens to the electrical signals coming from a computer’s keyboard. The code measures both the “dwell time” (the amount of time your fingers spend on each key) and the “flight time” (the amount of time between keystrokes). When you hit the return key or the login button, the timing information is first transmitted to Delfigo’s servers via HTTP, the standard Web data transfer protocol. Delfigo’s software then compares the incoming timings to historical information stored for each user. (Users have to train the system before it kicks in, Rodriguez says, by typing their usernames and passwords six to 10 times.)

Using sophisticated neural-network algorithms, the software calculates a “confidence score”—in essence, the likelihood that the person who’s trying to log in is the real account owner. It’s all a matter of statistics, Rodriguez explains, since the timings of each new login attempt will never match the training information exactly. If the confidence score crosses the threshold set by the organization, Delfigo …Next Page »

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The healthcare industry is facing a shakeup in the way it uses information technology, and this is creating all sorts of opportunities for entrepreneurs in New England. This was the take-home message from some of the top minds in the Health 2.0 field, who we gathered together last week for a jam-packed panel discussion at the XSITE event at Boston University.

We heard from expert panelists on the front lines of this transformation in healthcare—such as John Halamka, chief information officer of both CareGroup Health System/Beth Israel Deaconess Medical Center and Harvard Medical School, and Joseph Kvedar, the director of Partners HeathCare’s Center for Connected Health—about how their respective organizations are changing the way they use the Web and other technologies to improve the delivery of medical treatment, among other aspects of healthcare. And IBM’s Bruno Nardone, the company’s national segment leader for state and local healthcare, filled us in on how Big Blue is working in the Boston area on such initiatives as a virtual radiology theater to enable new ways for radiologists and their colleagues to interact online.

It’s no mistake that there was a big crowd of more than 100 people for the Health 2.0 panel; there’s a lot doing at the crossroads of IT and healthcare these days. For one, President Obama is calling for nationwide adoption of electronic health records to help control the rising costs of healthcare in the U.S., and his administration tucked $19 billion into the historic $787 billion stimulus package this year to cover some of the costs of the major undertaking. That’s a potential boon for Boston-area companies that provide electronic health records such as Athenahealth (NASDAQ:ATHN). Locally, we’ve seen a recent surge in startup activity in the Health 2.0 arena, including the launches of young firms like Connected Health and Life Image. (For details on more startups in this field, Wade delineated Boston’s growing Health 2.0 cluster about a year ago.)

Here are some of the bigger themes covered during the Health 2.0 discussion:

—Leveraging technology to reach patients wherever they need care. At Partners’ Center for Connected Health, Kvedar says, his team of doctors and innovators are searching for ways to …Next Page »

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San Diego-based Concerro, the developer of Web-based software that enables nurses in 200 U.S. hospitals to bid for shifts, says it has acquired all the assets and intellectual property related to CommandAware, a hospital-incident management system, from Los Angeles-based PortBlue. The deal means a new line of business for Concerro, which has 50 employees and has received approximately $10 million in funding.

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Boston-based American Well, in a one-two punch of advances announced this week, has added substance to its dream of giving consumers with health problems a way to consult with doctors over the Web and avoid more costly office visits. On Tuesday, the company said it was upgrading its Web-based “Online Care” platform to provide doctors guidance tailored to specific patients. And yesterday, a division of the UnitedHealth Group, the Minneapolis, MN-based company that is the largest private health insurer in the U.S., said it would begin deploying American Well’s platform to hospitals, practices, and patients across its huge network of more than 70 million members.

That’s a big win for the three-year-old startup, which introduced its Web-based patient communications platform last summer and, up to now, had signed up only two customers—the Blue Cross-Blue Shield plans in Hawaii and Minnesota. The deal with the division of UnitedHealth (NYSE: UNH), called OptumHealth, does a couple important things. It gives American Well access to that company’s so-called “clinical analytics” technology—which mines patient records for examples of gaps in care that can then be highlighted to physicians—and also clears the way for the platform to be made available to millions of people in all of the states where OptumHealth and UnitedHealth do business.

After the OptumHealth announcement, I reached Roy Schoenberg, CEO of American Well Systems, and asked him to explain both developments in more detail. (American Well Systems is the operational side of the venture; Roy’s brother and co-founder Ido Schoenberg is CEO of American Well Incorporated, the business side.) He talked about how the OptumHealth agreement will speed up deployment of American Well’s technology. And he differed with my own diagnosis about the slowness of the rollout so far, saying that he believes the platform is being adopted at a “staggering, unbelievable pace” considering the conservative (some would say anti-technology) nature of the healthcare industry, which still relies heavily on old-fashioned paper records.

Here’s a full writeup of our interview, which was conducted Wednesday.

Xconomy: Before we talk about your agreement with OptumHealth, can you explain the core of the news you released yesterday, about an upgrade to your own Online Care platform?

Roy Schoenberg: The release that came out yesterday was about the unveiling of what we call internally Version 3.0 of the Online Care platform. It has better, broader administrative capabilities and other things that improve the experience based on what we’ve learned from users in Hawaii and Minnesota. But probably the most important feature that has been added is a thing called Online Care Insight. It’s very possible that a patient [using our system] will be seen by a provider with whom they have not had a previous encounter. Which means that anything we can do to equip the provider with insights—not only about who the patient is, in terms of their medical record, which has been there from the very first release, but really what needs to be done for the patient, what are the gaps in care, the appropriate medication changes—will go a long way to make sure the encounter represents a higher quality of care.

The way this is done is by taking advantage of expert systems, called clinical analytics systems in the business, which are very large computer systems typically deployed by large organizations like health plans to review the current healthcare activity of patients to identify such gaps. A typical example would be if a patient has diabetes and they haven’t had an eye exam, which is very important to prevent blindness. These systems will pick that up and drive communication to a physician or a care manager to say, “Listen, you really need to do an eye exam.”

Many such insights are generated by these systems, but until today, typically the results of those insights are, in the best case, the plan would send a letter to the physician saying that when you see the patient next you need to advise them about this thing. But as you can imagine, physicians typically don’t read mass mail, and don’t necessarily follow them. What we have now is the opportunity to engage those [expert] systems in real time when the patient is about to come together with a physician on our system. It brings them directly to the console. So the first time we are literally harvesting the immense computer power of these systems and bringing them into the care encounter.

X: From what I’ve read about OptumHealth’s eSync platform, it sounds like the expert systems or clinical analytics that you’re talking about is a big part of what they provide.

RS: ESync represents the front end of all of these analytics systems that Optum has developed and put in place. They have the ability to generate all of these messages about what needs to be done for the patient. But the big change is to be able to inject that information into the right place at the right time, so the physician can take advantage of it with the patient they are encountering right now. That ability is unique to Online Care. Before Online Care, when a patient was seen by a physician, there was no computer between the two.

X: Well, actually, there has been a computer in the room during almost every medical encounter I’ve had in the last several years.

RS: There is a computer. The question is whether the physician is going to log onto a system and read what that system is telling them about …Next Page »

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It’s been almost a year since Boston-based American Well unveiled its online healthcare marketplace, a system designed to allow health plan members to connect with doctors or other medical providers live over the Web without having to visit an office or clinic. It’s an idea that could simplify healthcare access and reduce costs for both consumers and providers. But adoption has been slow: so far, only two state health plans (the Blue Cross/Blue Shield franchises in Hawaii and Minnesota) have hired American Well to implement the service for their members.

Now American Well has struck a deal that could help it leapfrog the painstaking, state-by-state process of signing up large health-plan customers and expand its business much faster. In a joint announcement this morning with Golden Valley, MN-based OptumHealth, American Well said that it will combine its secure Web communications platform with OptumHealth’s technology for delivering information about individual patients to healthcare providers. That way, any health plan, employer, or medical practice that uses OptumHealth’s platform, called eSync, could potentially give its patients or employees the ability to connect with physicians for real-time online conversations.

“The collaboration between OptumHealth and American Well marks a milestone for the health care industry and will improve access to care for millions of Americans,” American Well CEO Ido Schoenberg said in this morning’s announcement. “At a time when the country is seeking ways to improve health care delivery and reduce costs, OptumHealth is leading the way by making on-demand medical services available to consumers and employers nationwide.”

It’s not clear yet how the integration of OptumHealth’s patient information system and American Well’s online care platform would work, or whether the service will be limited to consumers whose health plans or employers are already customers of OptumHealth. So far, the companies are only saying that the service “will be available to employers, their employees and individual consumers.” The announcement calls the service “the first nationwide service allowing individuals immediate access to physicians and clinicians”—but also says that it will be rolled out “on a state-by-state basis.” We hope to get clarification from American Well later in the day.

The two companies made the announcement this morning at the annual meeting of America’s Health Insurance Plans (AHIP), a trade group for private healthcare providers, in San Diego. OptumHealth is a unit of UnitedHealth Group (NYSE: UNH), a multi-state managed care provider that has one of the nation’s largest patient pools.

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Yesterday morning in Redmond, WA, Governor Deval Patrick of Massachusetts sat down with Ray Ozzie, the chief software architect of Microsoft. They talked about high-tech innovation in the Boston area, how Microsoft views its own global future, and how the company could work together with Massachusetts to help drive the local economy.

“I was talking with Ray about what we have to offer in Massachusetts,” Gov. Patrick said afterward, “and how he is thinking about a distributed organization—not entirely focused on Redmond, but centers of gravity around the world.”

Patrick clearly would like to pull more of Microsoft into orbit around Boston’s technology cluster. His agenda on this West Coast trip—which also includes visits to Portland, OR, and to Silicon Valley companies like Google, Facebook, and Electronic Arts—is to promote Massachusetts as a cutting-edge leader in technology, and to build relationships that could lead to new high-tech jobs and economic growth in his home state. The governor briefed a group of reporters by phone while rushing off to the airport to catch a flight to Portland.

In their meeting with Ozzie, Gov. Patrick’s team spoke of Boston’s innovation strengths in e-health (including electronic medical records), Internet video, gaming, and mobile communications. Ozzie pointed out the strong high-tech talent pool in the Boston area, as well as the high quality of education in Massachusetts, from K-12 public schools to elite universities. They discussed Microsoft Research New England in Cambridge, MA, which officially opened last September, as being part of the company’s efforts to tap the best local talent in computer science and mathematics.

That point came to the fore during a Q&A session Patrick took part in with Microsoft employees. “There were an awful lot of people from Massachusetts working at Microsoft,” said the governor. “They’re here in some cases because in order to move up in Microsoft, it was perceived that you had to be in Redmond. Ray and others are trying to move to another model. Their lab in East Cambridge is a step in that direction.”

It was interesting to hear how Patrick portrayed Microsoft as an innovation leader—a view not everyone in the tech industry would share. “Microsoft is unique, or uncommon, among American companies in terms of their consistent focus on what’s next, looking out five, 10 years,” he said. “It’s not just about jobs today, but how to prepare ourselves for future growth…It’s about branding our tech sector in a fresh way, both as a platform for all the other innovation industries we’re trying to drive, and also as a source of innovation on its own.”

As for what progress had been made on any partnerships with Microsoft, Patrick wasn’t specific. “These are first meetings, or second conversations. We’re not expecting commitments so early in the relationship,” he said. “We want to build a strong foundation, we want to be in play. We want the relationship to deepen. It’s a step in that direction.”

And then it was off to a different tech sector for Patrick. In Portland, the Massachusetts Democrat was slated to meet with Vestas, the world’s largest maker of wind turbines. “We’ll talk about a testing facility and the opportunity to partner with them on that,” he said. “I’m interested in alternative energy and the creation of jobs around manufacturing turbines.”

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Boston-based PatientFlow Technology, which makes software that helps hospitals deal with backups in emergency rooms, ICUs, and other care settings, has been acquired by health care improvement consulting company Press Ganey of South Bend, IN, according to an announcement today. The companies did not disclose the terms of the deal, but said that the acquisition would not lead to any layoffs at PatientFlow.

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Seattle and Boston, two of Xconomy’s network cities, have something extra to be proud of today—at least when it comes to Internet startups. Each city contributed two companies to a popular list of the year’s best Web applications for improving customers’ real lives.

That’s according to the tech-news blog ReadWriteWeb, which has published its list of the “top 10 real world Web apps of 2008.” These are Web services that help keep people’s offline lives more organized and efficient. The categories were finance, health, education, politics, nonprofits, and travel. Without further ado:

—In Seattle, the teacher/student community site TeachStreet won in the education category, while the airfare-tracking site Yapta won in travel. TeachStreet expanded to the San Francisco Bay Area last month, from Seattle and Portland. Yapta is in the process of closing a funding round of at least $2.7 million.

—In the Boston area, the social-networking sites PatientsLikeMe and Sermo, both based in Cambridge, MA, won in the health category. PatientsLikeMe is an online community for people with life-changing medical conditions like Lou Gehrig’s disease, HIV, and Parkinson’s disease. Sermo is a site where 90,000 doctors exchange information about medical practice. Sermo recently signed a deal to open up access to this network to financial industry experts who subscribe to the Bloomberg Professional information service.

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One thing leads to another, especially for reporters. After we published our Boston Health 2.0 Cluster story in June, I started getting a lot of invitations to attend and/or moderate local events relating the Web’s influence on the healthcare market. One such event was a weekend brunch hosted by IC Sciences executive vice president Steve Wardell, where the guest of honor was Amir Lewkowicz, co-founder and vice president of partnerships at Inspire (known until this February as Clinica Health).

Often held up as one of the standard-bearers of the Health 2.0 movement, Inspire hosts Web-based communities for disease sufferers and their caregivers, and earns money by arranging for pharmaceutical and device companies to recruit community members as volunteers for clinical trials. Lewkowicz runs the Newton, MA, offices of Inspire, which is headquartered in Princeton, NJ. A couple of weeks after the brunch, I met him for coffee in Coolidge Corner and got a chance to interview him at length about Inspire’s business model, which is a synthesis of social-networking ideas Lewkowicz picked up while earning an MBA at Wellesley’s Babson College several years ago and knowledge of the clinical-trials process brought by his co-founder, Brian Loew.

The 10-person startup’s focus, Lewkowicz explained, is on the kind of crowdsourcing now classic in the Web 2.0 world. Specifically, the company helps existing health- and disease-oriented organizations, such as the ALS Foundation or the National Infertility Association, create online communities where members can share their own experiences and knowledge. It’s an itch that apparently needed scratching: more than 80,000 people have joined Inspire’s 40-plus communities since its first social network was launched in 2006. But along the way, Inspire has also been able to fill a second need—for qualified participants in trials of new drugs, a scarce resource that pharmaceutical companies spend millions of dollars each year seeking out. An edited version of our conversation follows.

Xconomy: How did the idea for Inspire come together?

Amir Lewkowicz: Brian Loew and I have known each other for many years. We went to undergraduate school together. The idea came about in 2004-2005, along two different paths. Brian was looking at the clinical trials area and found that the biggest issue people were talking about was finding the right people for clinical trials. The number-one reason for delays with trials and bringing drugs to market was that researchers couldn’t find enough people.

At the same time, I was doing my MBA at Babson, and had just taken one of those classes that changes your whole view of things. It was called “Extended Enterprise Management” and was taught by Marty Anderson. I thought it would be about operations and supply chains, but he introduced the whole concept of social networks. This was in 2003, when social networking was not really mainstream. He blew me away. The way he positioned it was that if you build your company around direct input from the consumer, it changes your whole way of looking at things.

Well, at Babson it’s kind of like a religion to start your own company. They really push you—but in a structured, good way. I was in touch with Brian, and we started talking. At the same time, I had a personal thing—my sister and I suspected that one of our parents had a specific condition. We went online looking for authoritative content and had a very frustrating time. The online groups weren’t structured very well. But I was using LinkedIn and was getting a lot of benefit out of it. I wondered why this couldn’t be done for healthcare also.

Brian had started a company in the 1990s called WorldWeb, a content-management company kind of like Vignette, and had sold the company and then joined the Washington Post, where he was helping with technology strategy and social media. So the idea germinated—why not create a place for people with health conditions to support each other, but at the same time use it to recruit for clinical trials. It was a perfect-storm scenario.

X: But isn’t it pretty difficult to create a social network from scratch and get to critical mass where you have people generating useful content?

AL: We always believed we would partner with health organizations. We went to hundreds of websites to see what kinds of tools they had, and at the time about 25 percent of patient advocacy groups, hospitals, medical groups, and disease-oriented organizations had some sort of social media, mostly discussion boards. We saw an opportunity to partner with these groups.

The first few months was doing the market research, seeing what the potential partners needed, and working on a prototype. We didn’t raise any money; our wives were our first investors, essentially.

After a few months, we raised some angel money, in early 2006. That gave us enough money to hire four developers and finish the prototype. While those guys were doing that, Brian and I went out and talked to potential partners. We had to educate the market. A lot of people in healthcare had no idea what social networks were. There was a lot of fear around them. “You’re going to let patients talk to each other? What about the liability?” All they really knew about were the horror stories about …Next Page »

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It seems that Sermo, the exclusive online community for physicians, is finding new ways to monetize its population of members almost as quickly as that population is growing.

Last year, the password-protected site, where some 90,000 practicing physicians consult with one another on medical cases and other issues via a system of comments and polls, rolled out a service called AlphaMD that gives investors read-only access to Sermo’s user forums, plus the ability to query members directly through surveys. The company markets AlphaMD as a source of early, “actionable” intelligence about healthcare industry trends.

And today, at the Health 2.0 conference in San Francisco, Sermo CEO Daniel Palestrant introduced a new service called the Health Exchange that amounts to a vast expansion of AlphaMD. All 280,000 analysts and investors who use the Bloomberg Professional information service will soon have access to Sermo as part of their regular subscriptions, Palestrant announced. For an extra fee, Bloomberg users will also be able to survey Sermo users on breaking healthcare news and other questions and connect directly with consenting physicians.

Sermo touts the Healthcare Exchange as an exclusive source of information that could help Bloomberg subscribers outmaneuver other investors, by providing them with new “transparency” in an industry where gatekeepers such as journal editors and paid pharmaceutical-industry consultants have traditionally had an outsized influence on investor opinion. “The Healthcare Exchange tears down the barriers between those who need information and those who have it,” Palestrant said in a speech at the Health 2.0 meeting.

Of course, it’s a rarefied form of transparency that Sermo is promoting. The group of investors who could make good use of the insights exchanged on the Sermo network is arguably much larger than the group that can afford to pay $1,500 to $1,800 per month for access to Bloomberg terminals.

But there are certainly plenty of voices on Sermo vying to be heard. When Rebecca first reported on Sermo in July 2007, the Cambridge, MA-based startup had only about 20,000 members. That number had grown to 26,000 by the time of her followup story in September 2007, nearly 50,000 by January 2008, and 77,000 by late August. It’s now 90,000, and growing at 7,000 per month, according to Palestrant.

For Bloomberg, supplying subscribers with access to these medical experts could give service a big leg up over its main rival, the newly-merged Thomson Reuters. Sermo, which has been staffing up rapidly since its $26.7 million Series C financing round last fall, obviously stands to benefit as well. The terms of the agreement with Bloomberg weren’t disclosed, but on top of any direct fee it’s collecting from the news service, it will likely have a long line of Bloomberg subscribers queuing up to quiz physicians directly—say, about the prospects that a particular company’s drugs will fare well in clinical trials.

And investors aren’t the only ones feasting on the physician discussions at Sermo. As Ryan reported in August, Palestrant says he has lined up deals giving site access to M.D.’s at nine of the world’s 12 largest drug companies, including New York-based Pfizer.

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It was almost exactly a year ago that Microsoft launched its HealthVault service, a secure online database for users to store and manage their medical records. And in recent months, we’ve reported on the software giant’s increasing efforts in health care, including its new partnerships with prescription drug provider CVS Caremark and Boston, MA-based health startup American Well. Now, Microsoft is teaming up with San Diego-based Scripps Health to study the long-term effects of personal genome testing on health and lifestyle.

The study, which is co-sponsored by the Bay Area firms Affymetrix and Navigenics, seeks to do genetic scans on as many as 10,000 people affiliated with the non-profit Scripps Health system. The scans and analysis will tell participants about their genetic risk for health conditions like diabetes, obesity, heart attack, and certain types of cancer. But the point of the study is to follow what happens after that: will participants change their lifestyle to combat their newfound health risks, and if so, how? The plan is to track their behaviors over 20 years using detailed questionnaires and periodic health surveys. To protect the privacy of users, the identifying information on their saliva samples and questionnaires will be “encrypted and kept in a secure database,” according to Scripps.

What’s in it for Microsoft? Participants will be able to store their clinical and lifestyle information in a Microsoft HealthVault account, and access it or share it with health care providers. “This collaboration is a significant step forward in empowering people to proactively address their specific individual health needs, as well as give clinical researchers access to a broader pool of genetic data to develop new disease treatments,” said Peter Neupert, corporate vice president of Microsoft’s health solutions group, in a statement.

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Burlington, MA-based ChartOne, which makes software used by hospitals to manage the distribution of confidential paper and electronic medical records, was acquired by Alpharetta, GA-based HealthPort in a deal that closed on Monday, HealthPort said in an announcement. ChartOne was HealthPort’s closest competitor, according to the statement, which did not reveal the terms of the acquisition.

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