Why It Stinks To Be A Healthcare Entrepreneur
By Todd Hixon
This is the title [paraphrased] of a keynote given last week by Jonathon Bush, the CEO of AthenaHealth, at the Xconomy Mobile Madness conference in Cambridge, Ma. What follows are my notes from the speech. The ideas are Jonathon’s. I really like what he’s saying and mostly agree, and he puts it very well.
Jonathan Bush, CEO of AthenaHealth. Photo via AthenaHealth.com.
AthenaHealth’s base business is medical practice billing in the cloud. This is an example of technology-enabled transformation of the health care business system, which we believe will be a big opportunity for entrepreneurs going forward. Founded in 1997, AthenaHealth is now a successful public company (ATHN).*
Jonathan was a co-founder and is the long-time CEO. He is scion of the Bush dynasty: a nephew of President George H. W. Bush. But his style is very much that of an entrepreneur: loose and irreverent.
Here are the notes I took from Jonathan’s keynote.
- It stinks to be a digital health care entrepreneur because you can’t get the data you need. The average doctor receives 1,100 faxes per month. The information is all analog: print, fax. Without digital data, there is nothing to do.
- Regulatory hell: new entrants get frisked with a cheese grater. Medicare is like an infant with an Uzi: well meaning but mostly confused. The downside is big if something goes wrong.
- Selling is a bitch: the doctor is the real decider, and she is swamped and dis-empowered. 60% of docs work for hospitals today; the hospital’s mission is to get the doctor to not shop for better value. Partners (Partners Healthcare in Boston, the leading integrated healthcare system) has raised prices 80% in five years by buying up all the docs. JD Rockefeller is giving them a high five from the grave. You have to figure out how to sell to the Borg.
There is insatiable appetite among caregivers for more access to the data they control: e.g., no doctor knows what an MRI costs. Typically there is an 80% cost difference in a 20 mile radius [i.e., if you had the information, you could get a much better price].
This is the year when these problems begin to melt.
He went on describing how AthenaHealth is trying to “punch a hole in the dike” by making its digitized data (5% of payments in US flow through its system) and its platform for selling to 40,000 caregivers available. They call this program: “more disruption, please”.
Jonathan’s conclusion: “The big opportunity for cost containment in health care is shopping. Getting the data to shop is the big challenge. We are a nation of shoppers but we don’t shop for health care.”
It’s great to hear something so important said so well.
* New Atlantic Ventures was not an investor in AthenaHealth.
[This post first appeared at blogs.forbes.com/toddhixon on March 27, 2013.]