Financing the health care Internet

Internet-related health care firms have accelerated through the life cycle of capital finance and organizational destiny, including venture capital fu nding, public stock offerings, and consolidation, in the wake of heightened competition and earnings disappointments, Venture capital flooded into the e-health sector, rising from $3 million in the first quarter of 1998 to $3 35 million two years later. Twenty-six e-health firms went public in eighte en months, raising $1.53 billion at initial public offering (IPO) and with post-IPO share price appreciation greater than 100 percent for eighteen fir ms. The technology-sector crash hit the e-health sector especially hard, dr iving share prices down by more than 80 percent for twenty-one firms. The i ndustry now faces an extended period of consolidation between e-health and conventional firms.