| ARNHEM, The Netherlands, March 27
ARNHEM, The Netherlands, March 27 Digital
doctors like Nicholas Haining and Frank Bosch are changing the
face of medicine and the way publishers such as Wolters Kluwer
make money in the stagnant or low-growth North
American and European markets.
Tablet computers and smartphones are almost as essential as
a stethoscope in the modern medic's kit, with doctors calling up
medical journals, databases, reference works and patient records
on these gadgets as they do their hospital rounds.
As a result, Wolters Kluwer is increasingly selling
information in electronic rather than printed form - a change
that has allowed the Dutch company to increase margins and
"Medical students used to have to memorise things like the
branches of the trigeminal nerves. Now they would look it up,"
Dr Haining, a pediatric oncologist working in the United States,
"You are no longer a walking encyclopedia, there is no need
to have all the information in your mind, because you can get
the best available data and draw on evidence-based medicine."
Boston-based Dr Haining said he uses UpToDate, which Wolters
Kluwer bought in 2008, to access clinical evidence that has been
reviewed by experts in the field.
Wolters Kluwer competes with Reed Elsevier
and Reuters' owner Thomson Reuters , selling
specialist publications and software to bankers, lawyers and
accountants, as well as to doctors and scientists.
The company last year derived a fifth of total revenue and
profit from its health division, which sells more than 100
medical journals as iPad apps.
The division's earnings before interest, tax and
amortisation (EBITA) jumped 30 percent to 163 million euros in
2012 - the biggest percentage gain of its four businesses -
while the EBITA margin rose to 21.9 percent from 19.7 percent in
the previous year.
Reed Elsevier's iPad app for doctors, ClinicalKey, has more
than 500 leading medical and surgical journals, plus reference
books and third-party content.
Thomson Reuters sold its healthcare business last year.
The apps are very different from print versions. Using video
and audio, for example, they can demonstrate new advances in
surgical procedures which are hard to illustrate on the printed
"It's very difficult to describe an operation or surgery" in
print, Wolters Kluwer's chief executive Nancy McKinstry said.
Readers used to get in touch with the author of the article
and then discuss it or watch the surgeon performing a new
technique. Now they can see it on video, she said, which is an
easier format and also allows much more targeted advertising.
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Specialist publishers have made the shift from print to
online across their various businesses.
Three-quarters of Wolters Kluwer's revenue comes from online
or electronic products, up from 71 percent in 2011, and 49
percent when the transition from print was launched at the end
At Reed Elsevier, which also has a substantial exhibitions
and conference business, electronic publishing accounted for 64
percent of revenue in 2012. Print has dropped to 20 percent,
from 50 percent eight years ago.
Some analysts say Wolters Kluwer's transformation has gone
largely unnoticed by investors, while earnings growth was
lacklustre until last year when results beat forecasts.
So even though its stock hit a two-year high this month, the
firm is valued at a big discount to peers, according to Thomson
Reuters StarMine estimates, both in terms of the price-earnings
multiple and the ratio of enterprise value to EBITDA.
The company is sometimes considered a possible takeover
target, with a private equity firm seen as a more likely buyer
than a rival given potential competition issues.
The shift online is expected to continue, McKinstry said. In
the United States, nurses and physicians bring their tablets
into hospitals and operating rooms, a trend that is spreading in
North America and Europe accounted for 70 percent and 14
percent respectively of Wolters Kluwer's health division's sales
last year - compared with 54 percent and 40 percent of total
group sales - showing room for further growth on the continent.
Dr Bosch, a physician who specialises in internal medicine
at Arnhem's Rijnstate hospital in The Netherlands, is an example
of that trend in Europe. He listens to podcasts he has
downloaded from the New England Journal of Medicine on his
smartphone while he jogs or cycles to work, and does his rounds
clutching his iPad in its battered bright green cover.
One of his patients had atrial fibrillation, a condition
where her heart beats too fast and irregularly. She was on
digoxin but Dr Bosch wanted to check how another drug,
amiodarone, would interact with it, and found the answer on his
iPad using an app from WebMD Health Corp's Medscape.
"Because you can check more easily, you check more often and
that improves quality" and time, he said.