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Erudite Corp., a 3-year-old maker of Web-based educational tools, has landed a $350,000 contract with Health Alliance Plan to help to keep HAP physicians current on the latest treatment guidelines. By June, Detroit-based Erudite intends to deliver educational programs that HAP physicians will be able to access through the HAP Web site by summer or early fall. The contract is part of ongoing HAP efforts to improve patient quality and promote prevention, said Susan Schwandt, HAP public- relations manager. HAP physicians regularly receive information on clinical protocols and standards for preventive care, Schwandt said. The protocols outline proven steps for treating diseases, including chronic ones such as asthma and diabetes. Those illnesses can lead to costly emergency-room visits if not properly managed. HAP, though, has no way to determine whether the physicians are reading all the guidelines. The Erudite program has features to correct that shortcoming. By using the Web, physicians can log on at their convenience, either from the office or remotely, to view the updates, Schwandt said. When doctors log into the programs, HAP has documentation that they have seen the material. As an incentive to visit, HAP will provide continuing continuing-education credits needed by doctors and health professionals to stay current on their licenses. HAP is the state's second-largest health maintenance organization, with revenue of $839.8 million through the first nine months of 2001 and 550,000 members. The HMO has about 5,000 physicians participating in the plan. Erudite was recommended to HAP by Henry Ford Health System, the HMO's parent company, Schwandt said. Erudite has its roots in Henry Ford Health, said Frank Palazzolo, Erudite president and CEO. Palazzolo, 45, was a founder of Erudite in 1999 after spending 14 years with the hospital company. He rose to general manager of Henry Ford Health's electronic-learning unit before the company decided to contract out that function as part of a restructuring, he said. The plan presented an opportunity to Palazzolo, who was able to persuade former Federal-Mogul Corp. executive Jim Carano to help launch Erudite as the company's senior vice president and CFO. However, easy capital for dot-com companies dried up just as Erudite was emerging, forcing the new managers to use their personal savings, Palazzolo said. With any grandiose plans out the window, Erudite concentrated on developing a variety of Internet-based educational tools to provide a convenient forum for busy clinicians and executives, he said. Erudite had no sales in 2002 and $25,000 in 2001. The company employs 19. Palazzolo said the HAP contract is for $350,000 in the first year, with annual renewals that could extend the contract many years. But Erudite hopes to parlay the new tools into additional sales with other health plans in Southeast Michigan and potentially outside the state, he said. The HAP contract gives Erudite the right to use those specific tools with other customers for at least three years. The guidelines should be useful to the thousands of physicians in the region who contract with HMOs, Palazzolo said. Erudite also is working with the University of Michigan Health System to develop educational tools to communicate clinical guidelines on chronic diseases, he said. To fund its sales strategy and product development, Erudite plans to look for $1.5 million to $2 million in venture capital in the coming months, Carano said.