An Exclusive Interview with Jonathan Bush, Chairman and CEO of athenahealth

I was raised poor and therefore taught to distrust anyone born into privilege and politically connected families. For that reason, I fully expected to dislike Jonathan Bush, Chairman and CEO of athenahealth. After all, any one year of his schooling since toddlerhood (Andover, Wesleyan, Harvard Business School) cost more than my entire first state-college professional degree. On the other hand, I was intrigued at a mid-30s rich guy who bothered to spend time as an Army medic and New Orleans EMT, who sometimes publicly disagrees with his cousin on healthcare (not unusual, except his is the President of the United States), and who states his lifetime aspiration as "I want to end up as living proof that the best way to do well is to do good."

I was also intrigued by this statement in an article about him in Fast Company: "This Bush lives not in Washington but in Belmont, Massachusetts, probably one of the bluest towns in one of the bluest states. He coexists comfortably with an employee whose vegetable-oil-powered car proudly displays its bush=satan bumper sticker in athena's parking lot. This Bush has five kids and wears Lance Armstrong-style bracelets imprinted with athena's logo and the words teach and learn to remind employees what the company's culture is about."

CEOs are often well-coached, limiting their cautious interview statements to committee-approved rhetoric and spin. Well, I can say first-hand that Jon Bush isn't one of those. When we spoke, his opinions, ideas, and amusing asides came tumbling out like a landslide. Some have said he's hard to follow, but I thought it was just like a feet-on-desk, shoot-the-breeze session with an old buddy who happens to be very smart, energetic, and wickedly funny at times. He isn't afraid to have an original thought and then just air it out, or maybe to trade good-natured verbal punches just to see what you're made of. I can't make a definitive statement after an hour-long interview, but my impression is that he's a heck of a nice guy, high-bandwidth, and passionate about healthcare. And, I should add, a lot of fun to interview.


How was MGMA? Did any products or ideas there catch your eye?

No, I don’t think MGMA was the host of a major breakthrough, except for the fabulous presentations of athenahealth (laughs.) MGMA president Bill Jesse was cross examined about adoption rate of EMRs and admitted it was less than people think, which I thought was refreshing. It's still the best collection of practice management focused people in the country

The drum athenahealth bangs all the time is that everyone will adopt EMRs when they generate results. They just will. athena was a revenue cycle company, just like a pizza place, where you pay for pizza just like everybody else is selling. EMRs must be assembled in a way that generates results significant enough to be discussed at the golf game between docs. So far, no one in the EMR world has been able to book results and turn the database screen around and show the world.

athenahealth got a lot of press after grading insurance companies on their time to pay physicians. Was that done for the publicity?

Absolutely! We have created a public good here, and in exchange for delivering it to the public, we’d like to be acknowledged as the deliverer. We’d like to be known as the fiduciary. The truth is, we want to create change in this space. The rhetoric was launched miles ahead of reality. We declared HIPAA compliance years ago, and no one really is compliant except Medicare Part B processors. Very few doctors have heard of athenahealth and we think the best way to get the message out is to create useful public goods.

We've had great results from that, by the way. We’ve engaged in fabulous partnership discussions with payors. There have been a couple of sour grapes, but overall we'll achieve great supply chain clearing and new infrastructure. For those cynics on the blog, they should know that we’re turning the attention into better process infrastructure for doctors and payors. Fifteen payors since that thing ran have engaged and committed to develop resources to change their platform. I was borderline unlisting my number to prevent men in trench coats with bulges from coming to my house (laughs.)

EMRs for physicians’ offices are seen as an obviously good thing. Are they?

Certainly not as they stand today. However, where they stand today is an improvement over where they stood yesterday. The UI is an ingredient in the ultimate success of getting clinical information online. An interface mapped to a little server by the watercooler in the doc's office isn’t ideal. Additionally, the reality is that docs won’t be paid more for doing more accurate, more anal, more thorough electronic documentation. There needs to be other leverage in the model. A recent Rand study showed that the average doc with an EMR is 18% slower. There have to be other ingredients involved for there to be results. When there are results, EMR adoption will blow everyone away.

Technology is part of it, but knowledge and work are missing. More than 95% of what comes into a doctor's office is analog information like paper, fax, and courier crap. Crap that’s published on a website is analog as well - you have to go get it and do something with it. That won’t be changed by a doc buying a wonderful EMR. The notion of clinical information won’t be handled until that clinical information is online.

At athena, we will make healthcare online regardless of who in a doctor’s supply chain is online or not. We intercept the doctor’s teleprinter or fax lines and manually map the information, including stat mammograms and pizza menus, back into our EMR system for them. That inclusion of service with great software is going to generate results. For example, I’m the only guy in America who can tell you the percentage of orders that don’t have a matching result, as long as they're using athena’s new EMR service. The EMR companies don’t have any idea of this. It’s not their mission. Their mission is to provide an ingredient, but their ingredient doesn’t fundamentally provide results. They’re not idiots, though. They will eventually provide web native connections to real time information.

Do you see companies that sell traditional EMR products as your competitors?

Sure. Do-it-yourself is athena’s competitor, whether it’s the software you have, the chart you have, or new software you buy. I have a hard time distinguishing between software you can do it yourself on. Maybe your dropdown menu is better or your clicks are better, but those are arrangements of deck chairs on the Titanic.

We need competition. We need the second Starbucks in the neighborhood. We need competition willing to cannibalize their margins, not make 90% but hit the doctor on a dashboard he can deal with. Today there are no such players. I think we would do better if such competitors existed. Maybe next year when there are 20 competitors I’ll take that back (laughs.)

Does your personal physician use EMRs and is he or she a customer of your company?

She wants it but we’ve asked her to wait. She is waiting to be implemented. She doesn’t use an EMR, but did when she worked for hospitals. She's socially oriented, willing to do medicine she's proud of while sacrificing her income. We're just glad her husband makes lots of money so she can afford to do that (laughs.)

Despite what seems to be an airtight value proposition, you've lost some customers because of cost. Why is that?

Last year, 0.3% customers left. I don’t know whether we were too expensive. A couple of them died and a couple were acquired by other practices that didn’t want to change their platform. We’re in the Inc. 500 two years running and so far, growth and customer retention hasn’t been a problem, but I can imagine it becoming one potentially as the market gets smarter.

Not all the costs in a very small physician practice are recognized in checks written. Maybe the nephew works on the computers and the wife helps out on weekends. We’re averaging eight to 10 percent higher cash collections per doctor, although I suppose some aren’t getting that. Maybe it hurts to see a check go out to athena, or maybe they think, "If I switch it off, maybe it will stay there." So far, it hasn’t hit us financially.

I can see the notion that paying upfront each month as a percentage is tough, especially if you’re a genius doc who thinks he can figure it out for himself. We have less than 1% market share, so lots of docs in do-it-yourself mode still leaves us a whole lot more that we haven’t met yet. We’re adding 1000 docs a quarter. So far, it isn’t a problem.

What’s your take on RHIOs and a National Health Information Network?

We love that. We didn’t know there was a word for what we are – it's called a RHIO. All clients are on one single Oracle database. When you look at an insurance card, odds are it’s already in your practice because it was added by some other practice in the database. When billing for a new procedure with esoteric payment rules, someone else somewhere in the country has had it and you’ll benefit because it’s in one national online resource. That's a RHIO. I know the results delivery, so that's a RHIO – a national clinical integrity RHIO report.

I’m a big fan of that, whether it's a statewide committee or a national RHIO. I wish that CCHIT and RHIOs had lunch together and harmonized, to use an overused term, and standardized. CCHIT is a list of features you have to have, RHIOs are what you have to have to get your data online. It doesn’t seem to me that the two are connected. The features aren’t as important as getting clinical data online and better connected.

Integrity is the connection of “say” and “do.” Everyone chooses healthcare because they want to make a difference. Whether they "want to" or "really do" depends on whether “say” and “do” are the same. Our whole gig is connecting "say" and "do." Clients not on athena get on average 35% of their claims paid the first time they try. With Athena, it's 90%. 10% is still an outrageous kickout rate, but its better than 65%. Clinicals are worse than revenue cycle and we are taking that on with our new EMR service.

Everyone needs to have a service with their EMR that drives integrity. Doctors will be paid for performance – why aren’t vendors willing to go at risk? That makes me a little pissy. We just got legal clearance to charge for athenaClinicals as a percentage of doctors' claims settled. We don’t charge for the encounter and there's no upfront fee or flat fee. Originally we had some Stark concerns, but now it's OK. The administration has done a great job of getting regulatory clutter out of the way for improvement. There is much more long-term benefit than putting a disconnected legacy EMR in every pot.

Assuming healthcare cost is a zero-sum game, speeding up payments to doctors means third parties will want more money to offset what they're making by being slow to pay. Even if not, you're just increasing the income of doctors. How does that help the healthcare system?

It’s a great example. We did a study of a payor with very good unit cost. They concluded they would make an order of magnitude more money in paying compared to what they’d lose in not working the float. The cost of managing the claim is ten times just paying it. The average claim is less than $150. Carriers don’t want to talk to docs. The average practice is 3.5 docs. If they had to talk to all of them every day, they’d go broke. Ultimately some day, we will be back at a zero sum on the claims side. Hopefully by then there will be so much opportunity for pay-for-performance that we can direct the provider to new opportunities.

Of the companies and products in healthcare and healthcare IT, which would you consider disruptive and most likely to cause positive change?

I think the concept behind Healthy Markets was a disruptive concept that was awesome. I'm not sure what happened to it or what will happen next. They did a medical savings account connected to a defined contribution product. The employee could agree to stick with small provider network that handled big costs like pregnancy or hip replacement. If you agreed to use their tiny network if it happened to you, those networks worked together so that all ancillary services and costs were bundled. That gave the employee a much lower cost. If you say you want to wander into MD Anderson or Mass General if anything goes wrong, then your premium looks like what you’d get in the open market. You agree to use our recommended solutions for the expensive episodes that drive up the cost of healthcare. We almost have enough data to do it reliably across the country. That is a disruptive concept that will do amazing things for cost and quality.

I like how Eclipsys has oriented themselves as The Outcomes Company. I like that they don’t charge you a license and run. That idea is the right one. They have to make their legacy products fall into that line. That’s the right way for those companies to go to market. It's brave to leave those 90% margins behind and be at risk for what your client does. It's good for society.

Describe your company's culture and how you keep it from being lost as you grow.

The goal is to keep the culture no matter what happens with the company. We want teachers and learners who play for the team to win. If a function doesn't require a teacher and learner, we outsource it. We fire stars who don’t play for their team to win - we had to let a couple of them go recently.

Our #1 strategic asset isn’t the rules engine or software, even though those are fabulous, it’s our culture. It is my exclusive #1 priority, just like the real estate people say location, location, location, we say culture, culture, culture. We can’t hire for specific healthcare knowledge because the pool of people isn’t large enough to find the most highly talented individuals. We've built an elaborate knowledge management system so that anyone who’s bright enough can be effective. We give tests upfront. We look for teachers in the interviews – can you articulate a concept and make it light up for someone else? Our average employee has had eight interviews before being hired. 35% of them change jobs within the company in a given year.

Is the intertwining of healthcare and politics inevitable?

Yes, I guess we’re there now. If the industry doesn’t perform a good enough fiduciary duty for its customer, the government steps in and you have a highly regulated industry. The key is how much of the regulatory clutter can you somehow subvert and shape into something that is constructive.

You've already got money, so is there any other giant carrot dangling out there for taking athenahealth public someday?

I don’t know – that’s why we don’t have any plans. I want to be a public utility and a public good. There's something reassuring about the visibility of a public company. It serves as a good control on your behavior. Like they say in business school, watch what you do or you might be on the front page of the Wall Street Journal. We have investors and we’re very long in the company – we haven’t begun to fight. We want to get investors a return without having to cash out, let them enjoy the benefits.

You've spoken about higher calling and doing what you love. Given the mess that healthcare is in, is just making your customers more efficient enough of a challenge to keep your interest for another 30 years?

The larger calling of integrity will keep me interested for my life. We have a long way to go on claims, but it won’t keep me interested for 30 years. I look at the IOM report about how many people are harmed by mistakes. Tons of people are getting wiped out, humiliated, ripped off, and injured in healthcare. There’s a great human decency calling that’s a lifetime worth of work.

Who do you admire in the industry?

The new management team of Eclipsys. They were a tired company. Steve Wiggins of Oxford and Healthy Market. He didn't have the execution quite worked out, but he has great concepts.

Do you read HIStalk?

Everyone here loves your blog, we chuckle and chortle at your comments and are delighted when athenahealth is mentioned. You've accomplished notoriety even without using a last name. Nice work. Good luck with your blog – it's really cool.