Early efforts to define the opportunity for e-commerce identified the problem--an inefficient hospital supply chain--but failed to prove that e-commerce is necessarily the answer. Now, Novation and Neoforma, a leading hospital group and its e-commerce partner, have released an industry-wide look at Internet-enabled supply chain economics, done by consultants Arthur Andersen, hoping to prove the value to both providers and suppliers of widely implemented e-commerce.

For much of the past year, the promise of Internet-enabled e-commerce to deliver savings seemed just that: a promise. But a new study from Novation and Arthur Anderson goes a long way to finally putting some figures on the value and potential cost savings of a web-based supply chain.

From the politics of prescription drug coverage to the crash of the e-health sector, from biotech's market boom to the lackluster device IPO market, a look back at the most significant events of 2000.

Medsite has built a steadily growing revenue stream and customer base, primarily through online sales of books and medical supplies. It also leverages those e-commerce offerings to provide pharmaceutical and other product companies with a means of promoting themselves to physicians by using incentives, such as discounted books or supplies. With further growth in mind, the company filed a $100 million IPO earlier this year--only to withdraw it a few months later when the bottom fell out of the e-health public markets. Facing a suddenly hostile financing environment, Medsite's management re-engineered their business plan, with the goal of accelerating the company's drive to profitability by emphasizing the higher-margin end of its business that derives income from promotional deals with product companies. A key element of this effort is an ambitious package of customizable Internet tools for physician practices that is intended to bring in lucrative sponsorship contracts from product companies. In entering this arena, Medsite will find itself up against some major players with significantly greater resources. And to fund their ambitious new initiative, Medsite will have to convince a wary investment community that, in an industry apparently headed for domination by a few billion-dollar companies, they will be one of the survivors. But Medsite's management expresses confidence that its higher-profile competition has yet to make any deep inroads into the physician market, which they argue remains quite open. The task now is to persuade investors, product companies, and physicians that they can succeed---where others have largely failed--in getting doctors to make the Internet an integral part of their practices.