April 16, 2013, 7:30 p.m. ET By JON KAMP
In a time when even the corner coffee shop takes orders by iPad, the average doctor’s office remains stubbornly analog. Athenahealth Inc., ATHN -1.41% a provider of software for physicians, is trying to nudge medical management into the cloud.
The Watertown, Mass., company’s systems help doctors submit claims to insurers, track health records and coordinate patient traffic with hospitals, but Chief Executive Jonathan Bush says he wants to get more doctors to start managing their business and patient records online.
Although more health-care providers and hospitals have invested in electronic records, physicians have been slow to embrace the cloud. And while the fast-growing company has roughly 28,000 doctors using its systems, that number represents only about 4% of an overall physician market.
The 44-year-old CEO—a nephew to one former Bush president and cousin to another—recently spoke with The Wall Street Journal about the challenges of digitizing the health-care industry, and a key reason why the company spent $293 million on medical app purveyor Epocrates. Edited excerpts:
WSJ: How digital are doctors’ offices today?
Mr. Bush: Well, digitization has two meanings. In the rest of the world, it means a mobile app or an Internet app that connects the user to the world. In health care, it means that there’s a computer [in the doctor’s office]. The fact that that computer may talk to nothing at all or only to other computers within one company or system is a side note.
We’re probably 95% computerized on the revenue-cycle side [billing and payment] and we’re probably 50% computerized on the clinical-cycle side [patient records and referrals]. Virtually no one in health care, other than the athenahealth client base, is on any kind of cloud connected to anybody else.
WSJ: How much do doctors still rely on paper?
Mr. Bush: It’s 2013, and the average doctor is getting 1,100 faxes a month.
WSJ: What’s the hardest part of keeping records straight?
Mr. Bush: The worst paperwork nightmare for doctors, whether they’re employed or independent, is the clinical-information supply chain [such as prescriptions and patient referrals]. But doctors don’t get paid any differently whether their information is a mess and gets lost or not. Because the doctor isn’t stung financially yet, it hasn’t been their greatest complaint. Their greatest complaint has always been the revenue cycle. Because if you don’t get your claims paperwork right, you don’t get paid.
WSJ: How are you getting providers to adopt cloud-based systems?
Mr. Bush: Our breakthrough for coordination [is] called athenaCoordinator. Anyone in the country can now sign up to be on this network. So any of our clients, if they are sending to a local pharmacy, or to a specialist or laboratory, they can “friend” that laboratory or specialist or pharmacy onto athenaNet, and without getting onto any of our other services, that entity can start paying for and receiving online clinical information from our cloud-based service without having to be on it. So it’s a bridge to the cloud.
WSJ: What was the thinking behind your recent purchase of Epocrates, which makes widely used drug and clinical-reference applications for doctors?
Mr. Bush: The biggest obstacle to athena’s business success has been the fact that we’re totally unknown. And when we’re known, we’re not trusted because we’re too new, too young, too complicated.
Everybody knows Epocrates and trusts them. And so the first benefit is that, is just that we can now be known.
WSJ: How do you keep cloud-based records secure, and have you ever been hacked?
Mr. Bush: We pay a company to hack us every year, so I guarantee that we’ve been hacked. On the commercial side, we have experienced a denial-of-service attack related to the marketing vendor.
We have smaller leaks all the time, you know, a fax number is wrong by a digit, and the number that is loaded into the system is not the pharmacy down the street, but some law firm. And all of a sudden protected health information starts spilling out into this law firm’s fax. Hopefully the law firm calls and we find out about these things and we fix them. And then we publish to those affected that we made this mistake.
WSJ: Hospitals are steadily buying out physician practices, which are your main clients. Are you trying to serve hospitals more directly?
Mr. Bush: You can’t have an information backbone that helps make health care work as it should that skips the hospital. So it’s always been our intent to incorporate them. With athenaClarity [an analytics system for medical groups and health systems] we have all the hospital claims and expenses data. We’re also doing all the hospital registration and pre-certification as patients come in from the community. But it’s invariably the case that we’re going to have to take [on] the rest of the work at the hospital…and our hospital clients are very clear that that’s what they want from us.
WSJ: Will people ever carry around their own health records?
Mr. Bush: You should be able to instruct all of the doctors that you see to make your records available through a portal, and if you get stuck in an emergency room somewhere, there ought to be an emergency access code, that any doctor in the country can look up your chart.
That’s what we’re doing. Until patients become consumers, that’s going to be one of the slower-moving initiatives at athena.
WSJ: Athena started as a birthing center. How does that inform your current work?
Mr. Bush: It gave us a level of detail and immersion in the day-to-day agony of trying to run a doctor’s office inside the regulatory and claims environment that doctors do that is with us every hour of every day. And it gave us a connection to the humanity of the health-care mission. There were babies born within 10 yards of my little office all day long, every day of the week.
WSJ: You are from a pretty well-known political family. What lessons from your family members do you take to work?
Mr. Bush: I worked for my uncle George—41’s—campaign when I was a teenager and he has been an idol my whole life. Not at the same level as my dad, who also had a much bigger impression on me. But my uncle is very, very, very loyal, committed to his team, and I am that way as well. My father is a salesman, a connector, an empathizer. His time as a showman—he was a dancer on Broadway, and his ability to create a story out of air turned out to be very valuable to me [in the] early days.