Well, OK then.

I was going to wait a few months to revisit health care, but your response to my

Jan. 7 column on the subject was so big and so interesting that we might as well get right to it.

To restate the premise, managed care is evolving along two tracks, putting medical decision-making back into the hands of doctors (at least in theory), while using infotech to at long last become private-sector efficient. This creates some obvious opportunities for companies with workable solutions. And as about a hundred of you noticed, the last column omitted some of the best names.

CareInsite

(CARI)

, for instance, is not only a major competitor of

Healtheon/WebMD

(HLTH)

in the online health care transaction space, it's one of

Jim Cramer's

B2B rotisserie league picks. It's 72%-owned by

Medical Manager

(MMGR)

, which, after a recent acquisition, has access to more physician desktops than Healtheon.

Right now, the way to play CareInsite is through Medical Manager, since each share of the latter controls 1.4 shares of the former, and their prices are about the same.

Among the makers of software that helps hospitals manage clinical and financial data,

Eclipsys

(ECLP)

and

TriZetto Group

(TZIX)

deserve mention. Both have systems designed to cut hospital operating costs, and both are developing some interesting online assets. Eclipsys owns a piece of

HEALTHvision

, a private maker of what it bills as a combination online medical textbook and medical reference system. And TriZetto operates

HealthWeb

, a leading health care portal.

Some other good stories include:

Cyber-Care

(CYBR) - Get Report

, a developer of an "electronic house call" system that monitors a patient's vital statistics and transmits them to the hospital. Again, at least in theory, this cuts the cost of care for chronically ill patients by enabling them to spend more time at home. CyberCare is up 1,800% in the past year.

e-Medsoft.com

(MED) - Get Report

, which combines an online health care transaction platform with a patented encryption tech that it calls "the first absolute security solution designed to make totally confidential the vast volumes of private and sensitive medical information exchanged

online."

QuadraMed

(QMDC)

, a turnaround play in health care management software. Its revenue is rising 20% annually, its loss is narrowing and, after a decline of about two-thirds in the past year, it now trades at less than one times sales. In a recent interview, Ken Kam, manager of the

Firsthand Medical Specialists

fund, named this his favorite stock.

Claimsnet.com

(CLAI)

, which saw its online health care transaction processing business grow by 50% in the fourth quarter of 1999, and is trading below its IPO price.

Dissenters

Then again, maybe it's all hype.

Turns out a lot of you don't buy one or both parts of the thesis that managed care is broken and New Economy companies can fix it.

"There is

no

back-office medical paperwork nightmare," writes medical software salesman

Sean Mooney

. "There are only three different medical claim forms in the universe ...

and with the exception of Workers Comp, they have all been sent electronically for 10 years. ... The type of problems that occur are the result of commercial carriers deliberately delaying payments. For example, some will only give authorization numbers verbally over the phone, and then deny the claim on the basis that the authorization number was invalid. There is nothing Healtheon or any other claims forwarder can do about that."

"The Internet is just a network, a pipe," writes health care entrepreneur

Robert Lee

. "Networks don't solve problems; they just distribute them. The prior problems of the

health care industry were related to changing standards, diminishing reimbursements, changing managed-care rules. No program is going to get an unethical insurance company to pay a buck when the idea of the game is that they are not going to pay the buck. ... Then out of the blue came

Healtheon founder Jim Clark, claiming he was going to solve everything and the solution was the Internet. What a hoot."

And maybe, says a hedge fund manager who asked not to be named, we're betting on the wrong horses. Maybe the real value lies with the old-line companies already sitting on the best health care real estate. "

Aetna

(AET)

has all the information online for 29 million Americans, and its doctors are already submitting claims forms electronically," he writes.

"It has a market cap of $8 billion. It has already been offered $4 billion for its international business and could sell its annuities business for $3 billion more. That leaves a $28 billion health business, generating $900 million of cash earnings a year selling for $1 billion and $3 billion of debt.

"Besides," he adds, "it owns 85% of

Intellihealth.com

, an information joint venture with

Johns Hopkins University

that I believe is doing about eight times the revenue of

drkoop.com

(KOOP)

."

Hmm. This sounds a little like the "clicks-and-mortar" argument put forward in my July 30 e-commerce

column, in which I wrote that existing, real-world assets might actually be an advantage. So stay tuned for a column that looks for health care's

Wal-Marts

(WMT) - Get Report

.

John Rubino, a former equity and bond analyst, writes a column on mutual funds for POV and is a frequent contributor to Individual Investor, Your Money and Consumers Digest. His first book, Main Street, Not Wall Street, was published by William Morrow in 1998. At time of publication, he had no position in any stocks mentioned. While Rubino cannot provide investment advice or recommendations, he invites your feedback at

rubinoja@yahoo.com.