Healthcare // Leadership
News
11/19/2013
08:06 AM
Connect Directly
LinkedIn
Google+
Twitter
RSS
E-Mail
50%
50%

Athenahealth CEO Jonathan Bush's Quest: A Healthcare Internet

Experiences as Army medic, ambulance driver, and failed healthcare practice manager gave Bush the idea for a new way of structuring healthcare.

One of the things that captured his imagination was that, within certain guidelines, if the need was great enough an EMT could do things that otherwise only a doctor would be allowed to do. "In the case of emergency medicine, if you don't treat, it's too late," he said. "They had to dispense with the guilt -- the idea that the doctor was the only person who could do certain things -- and on the theory that it's not going to matter in a minute, we might as well let this idiot try it." As a combat medic, he was trained to do even more -- like suturing wounds or cutting open the throat of someone unable to breathe -- because there would never be enough doctors to go around on a battlefield.

Bush said there are certain lifesaving procedures he'd rather have done on him by an EMT than a doctor because the EMT would have done it more often, under more challenging circumstances. That got Bush wondering: "Why don't we do all of healthcare that way? Or at least the parts that are repetitive and boring?" His doctor friend had warned him about the drudgery of a doctor's life, but how much of that was because doctors were being asked to do too many things that weren't really part of their job?

"One guy in my platoon had recently been eating out of a dumpster," Bush recalled, yet with 10 weeks of intensive training and some native smarts, that man was functioning as a highly skilled medic. "Meanwhile, we pay outrageous sums of money to have doctors dumb themselves down into doing things that could easily be delegated. Breaking up healthcare according to the theory of comparative advantage has been the theory of my career -- since then, since I was in college."

That theory, which dates to the 1800s and is mentioned in Athenahealth's standard company presentation, is essentially that every person, business, or nation should do what it does best, and then buy products and services from others who are the best in their respective specialties. "That's true of midwives and OB-GYNs, and it's true of medics and primary care docs, and it's true of nurse practitioners and physician's assistants, and specialist surgery centers and hospitals," Bush said.

The idea of specialization was built into the design of the birthing clinics he and Todd Parks founded. The business was set up so that six doctors could oversee 3,000 births, with as much routine work as possible handed off to non-physician medical workers. "Our doctors only saw patients who were maybe sick or really sick," Bush said. "Turns out, pregnancy is not a disease."

[ Related: Athenahealth: The Other Side Of The Cloud.]

When Athenahealth morphed from a medical practice to a service for medical practices, the idea was to do a really good job of performing tasks doctors don't like to do and that they and their offices aren't particularly good at, such as insurance claims processing and collections. Athena's Web-based software is less a product in its own right and more a means of accessing a set of business services, including people to follow up on rejected claims and people to transcribe incoming faxes, turning them from document images to structured Athenanet data about patients and claims.

There is room for a lot more specialization in healthcare, including the potential for disaggregation of services that today are centralized in hospitals, Bush said. "And yet the demand curve doesn't work because the price is fixed."

This is where Bush starts to sound more like a member of a Republican political family, railing against regulation that interferes with the natural workings of the markets. In an earlier phone interview, when I asked how much of his rhetoric is related to family and party loyalty as opposed to Athenahealth's corporate interests, he allowed that it was a mix but added, "I believe that markets work more than other systems, and yet I'm acutely aware [of] massive market deserts in healthcare where there is no normal demand curve, no energy. So I'm tractable. I believe in regulated markets, but I believe in markets."

Yet he argued the Obama administration's Meaningful Use program that encourages doctors to use EHR software and exchange records online has hurt as least as much as it has helped. Healthcare software vendors with obsolete products benefited the most when "all of a sudden, Obama shows up with a check and says, 'Buy this piece of crap, and you'll get this chunk of money.' Tens of thousands of people bought these things and have not gotten meaningful use." Meanwhile, many doctors and hospitals spent so much money implementing systems that, despite being dissatisfied with, they're reluctant to change. "I feel like we lost more than we gained from it. But we'll gain it back."

Financial analyst Coldwell, a specialist in healthcare equities, agreed the incentive program that arrived as part of Obama's economic stimulus package was "a massive adrenaline shot for companies that should have been dead a long time ago," and "probably the worst thing that could have happened for Athena."

A market for health data
"Healthcare does not need new technology as much as needs new business models," Bush declared. The best thing the government could do to enable that is get out of the way, he said. Of course, the company has to spend most of its energy working within the rules as they exist, Bush said. Athenahealth has two people out of 3,000 tasked with trying to influence government policy, and he goes to Washington two or three times a year.

 

Two ideas the company is pushing hardest are to "let other people besides the fox to be guarding the henhouse" by letting others besides hospitals and large medical groups become accountable care organizations (ACOs). That would open the door for smaller organizations to play a role in controlling costs, and Athena could step in to act as an "ACO wholesaler," he said. "Right now, the only people who are ACOs have too much to lose because the savings come out of their own hide."

Second, Athenahealth is lobbying to make healthcare information exchange into an open market where receivers can pay for the healthcare information they get digitally. Currently, that is against the rules -- although Athenahealth managed to negotiate an exception with the US Department of Health and Human Services. "The Office of the Inspector General -- which is actually an American institution, although it sounds like something a Chilean dictator would have -- has allowed us to unbundle the way we charge for records for our clinical records service," he explained. This allows Athena to charge a lower fee to providers who are recording data in an EHR and sharing it electronically, because the recipients pay $1 per record that the service can "match and file for you." In return, the recipients can customize the way they receive that data "and they pay for that data only when the information gets into the chart," Bush said.

The fee is limited to $1, and the mechanism works only when both parties use Athenanet services, "so it's a polio-infected version of what is needed, but anyway, we're starting to pulse some two-sided energy into this dead patient, the healthcare market," Bush said.

Previous
2 of 3
Next
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
David F. Carr
50%
50%
David F. Carr,
User Rank: Author
12/19/2013 | 12:39:33 PM
Athenahealth's Jonathan Bush to take a breather
Investors and financial analysts are probably reading too much into Jonathan Bush's announcement that he will take a sabbatical in 2014. He strikes me as fully capable of just wanting to take a breather ... or start another company on the side ... or maybe consort with the political side of his family. He's unpredictable, and that's part of what makes him interesting. But I think he also has a good organization in place that can survive for a couple of months without him.

Here's what the Motley Fool has to say about Athenahealth's financial prospects

What Everybody Ought to Know About athenahealth's Noisy 2014 Guidance (ATHN): http://www.fool.com/investing/general/2013/12/17/what-everybody-ought-to-know-about-athenahealths-n.aspx
David F. Carr
100%
0%
David F. Carr,
User Rank: Author
11/19/2013 | 9:43:41 AM
A partisan perspective?
Does Bush's perspective strike you as ideological or partisan?

Actually, I'm told most of the Athenahealth employees lean Democrat, but that doesn't stop them from working hard every day to bring about a new healthcare marketplace where Athena gets to play a central role.
2014 US Salary Survey: 10 Stats
2014 US Salary Survey: 10 Stats
InformationWeek surveyed 11,662 IT pros across 30 industries about their pay, benefits, job satisfaction, outsourcing, and more. Some of the results will surprise you.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest September 18, 2014
Enterprise social network success starts and ends with integration. Here's how to finally make collaboration click.
Flash Poll
Video
Slideshows
Twitter Feed
InformationWeek Radio
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.