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Bloomberg Partners with Sermo Online Medical Community to Build Healthcare Marketplace for Investors

Bloomberg partners with online medical community to provide professional investors with access to thousands of practicing physicians.

In a sign that expert research networks are catching on with hedge funds, mutual funds and other professional investors, Bloomberg announced in October a partnership with Sermo, an online medical community, to build a new forum on Bloomberg terminals. Tapping into the expert network's medical content and potential to survey 90,000 physicians, Bloomberg plans to launch a new marketplace called The Healthcare Exchange to be distributed across the financial news and data provider's global network of 280,000 terminals.

Sermo, which means "conversation" in Latin, allows physicians to post comments on topics such as new drugs, clinical trials and treatment methods. The partnership will give Bloomberg users access to real-time medical information and postings from tens of thousands of practicing physicians in the United States. Doctors can comment, post a question or vote on someone else's answer, and Bloomberg users will be able to set up alerts based on keywords that will notify them in real time of new content about, for example, a drug or device, according to Sachin Roopani, an executive responsible for development strategy for healthcare at Bloomberg.

"Every conversation that physicians have with each other is distributed over the Bloomberg network for no additional cost," explains Roopani. "All of this content generates additional ideas." But the real value, he suggests, is the ability for portfolio managers or analysts to conduct customized surveys targeted at hundreds if not thousands of physicians who represent 68 specialties. "The value-add is that investors can learn what's the general consensus, which is qualified in terms of percentage of how many physicians responded to each question," he points out.

The demand for so-called primary research is growing, according to Michael Mayhew, chairman, founder and global director of research of Integrity Research, an information provider specializing in alternative research. "We've definitely seen analysts at hedge funds and mutual funds doing more and more primary research, and this is certainly taking place as they come to rely less on sell-side research and as they are seeking a more proprietary informational edge," Mayhew relates. "And as they have been doing that, survey work is more and more important," he adds.

"The value of using an expert network is that you can get the input of a larger number of people than just calling them one at a time," Mayhew continues. "You can get a more standardized view of an issue, and if they design the survey correctly, you can get data that is predictive." In theory, the data should be more reliable than the qualitative insights obtained from speaking with a handful of doctors, he says.

Tapping the Collective

Daniel Palestrant, Sermo's CEO and an M.D., founded the company three years ago and launched the service in 2006 with roughly 800 registered physicians. He says the intersection of the investment and medical communities creates a situation where investors who need to make decisions can tap into the "wisdom of the crowd." Palestrant suggests that the combined knowledge of the Sermo community, which is growing at the rate of 7,000 physicians per month, surpasses that of any single expert. Tens of thousands of physicians log on to Sermo to share information and learn from one another, he adds.

"The beauty of Sermo is that it can instantly poll, [for example], 1,000 rheumatologists," Palestrant says, noting that doctors are reimbursed for participating in canned surveys as well as client-initiated surveys. Physicians' identities, he adds, remain anonymous. "We can provide that real-time data and insight in a way that doesn't violate the privacy of those physicians," Palestrant says, stressing that 90 percent of the information on Sermo doesn't have any payments associated with it.

According to Palestrant, there will be two flavors of The Healthcare Exchange, which is part of the BDrug screen on Bloomberg terminals. Bloomberg users will have free access to most Sermo content as part of their Bloomberg subscription, including news feeds, postings and alerts. But they also will have access to different levels of fee-based service, such as breaking news surveys conducted by Sermo analysts or generated by Bloomberg News reporters. Some of the results might appear in Bloomberg news stories, while Bloomberg users would be able to purchase the full survey results separately.

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio

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