Jonathan Bush, Zus Health, on building the healthcare internet

Jonathan Bush has been working to bring the network effects of the internet age to healthcare for over a quarter century. In 1997, Jonathan founded what would become athenahealth, a cloud-based EMR platform business that he ran for over 20 years. During that time, his focus on efficiency and his understanding of modern technological tools allowed him to continually innovate the way that healthcare workflows were designed and used by providers around the US. His new company, Zus Health (pronounced Zeus), seeks to pick up where he left off at athena to build a unified patient record that will support providers as they seek to deliver better, more connected care. Zus just completed a $34M Series A raise led by Andreessen Horowitz with participation from F-Prime Capital and Maverick Ventures

Jonathan began his career as an EMT and then as a medic in the US Army. Even early in his career, he’s stated that he noticed the algorithmic nature of care delivery at different levels of certification/training. After finishing up college and working as a consultant at Booz Allen Hamilton, Jonathan opened Athena Women’s Health with his co-founder, Todd Park (future founder of Castlight and Devoted Health). They had what Jonathan would later refer to in his book, Where Does It Hurt?: An Entrepreneur’s Guide to Fixing Health Care, as an obsession with running a “ruthlessly efficient operation”. This obsession would lead the two men to creating one of the largest electronic medical records companies in the US, athenahealth. Jonathan led athenahealth as the CEO for over 20 years. In 2018, Jonathan resigned his position as CEO of athenahealth as a result of an activist investor campaign led by Elliot Capital. Since then, Jonathan has served as the Executive Chairman of Firefly Health, a virtual primary care company.

In this episode, we discussed:

• The origins for Jonathan’s vision for the healthcare internet
• Learnings from Jonathan’s experience building athenanet and as the Executive Chairman of Firefly Health
• The impact of the new wave of virtual-first care delivery providers as well as areas for future innovation in the healthcare space
• How to tackle an ambitious vision in the healthcare industry — hint: one step at a time

2:00–16:00 — Conditions that led to the founding of Zus

• On the concept of the “healthcare internet”: Jonathan sees shift towards DTC tech-enabled care delivery models as a huge evolution in the healthcare space that will enable new businesses and technologies to make care better, cheaper, and more accessible. While the concept of the healthcare internet has existed for a long time, Jonathan argued that it’s been limited to things like record keeping (heard of athenahealth?) until now.

“The journey towards a place online that is secure enough, connected enough, intuitive enough, compliant enough to eliminate duplication and use technology as well as it’s used elsewhere in our lives. As you know, it’s a saga that’s been going on for years.”

• Origins of the idea of a unified patient record: The emergence of athena clinicals was when Jonathan first realized the need and potential value of having a unified patient record. The issue at the time was the majority of athena’s revenue was coming from billing services (rev cycle management) and Jonathan acknowledged it was going to take a huge investment to re-platform to focus on care delivery as well as billing. Ultimately, Jonathan says that he wasn’t able to convince the shareholders nor the doctors they served, who were incentivized to keep care under the same shingle, to invest in work that wasn’t tied to the core revenue model.
• On why now is the right time for this innovation: Three major changes: 1) developer comfort with using platform technology, 2) rise of virtual/ tele-care, 3) pro-data sharing regulatory changes. First, Jonathan jokingly referred to the use of Perl code in 1997 to highlight the differences in the tech development community since he founded athenahealth. Developers are now more comfortable consuming other people’s core tech to enable what they want to accomplish (e.g., AWS, Twilio, Stripe). Second, the pandemic has seen the world become more comfortable with telehealth. Jonathan loved this change because it took costs out of the system — he brought up the fact that insurers literally had to give premiums back to consumers because they went over their profit limits. Finally, Jonathan discussed the impact of the 21st Century Cures Act which went into enforcement on July 1st, 2021 (roughly a week before this episode was published) that will give consumers (and their healthcare providers) the right to their healthcare data.
• On learnings from athenanet: When referring to the state of affairs on athenanet before “I got booted”, Jonathan proudly states that 15–18% of all visits to the doctor that happened on Athena were using the same workflows (i.e., same insurance/payment rules). While this may seem nominally small, in healthcare, Jonathan noted that this was unheard of. Where he acknowledged they fell short was in creating the unified patient record — noting that traditional brick and mortar provider systems didn’t want a record that was private enough and customizable enough to build their own IP on it. This customer need is one that Jonathan believes is unique to some of the new digital first providers.
• On the new wave of virtual providers: Jonathan refers to Regina Herzlinger’s concept of the “focus factory”, where, in her 1997 book Market-driven Health Care, she predicted the consumerization of the healthcare system. Jonathan posited that her prediction didn’t immediately come to fruition because there are local requirements for healthcare that force it to be a locally operated industry. Virtual care is tearing down these local requirements and enabling the creation of healthcare focus factories. Jonathan specifically highlighted companies like Ria Health that only focuses on low acuity alcohol treatment or Livongo with their focus on prediabetic care. Jonathan in fact, just spoke to a company that was thinking of building on Zus that is focused on creating a care experience tailored to the specific needs of racial minority groups.

“[You could build specialized care delivery models] if you didn’t have to pick one spot to put it, and you could spread out nationally, with virtual care. So all of those sort of digital first sub specialists emerging are just as important as this rise in risk type payment”

16:00–28:00 — Zus mission and growth trajectory

• On what Zus is actually selling: “Holy shit, product?!” Jonathan joked as if this was his ‘emperor has no clothes’ moment. Three products: 1) builder toolkit, 2) access to patient data, 3) data storage and sharing capabilities. Jonathan spent the majority of the discussion highlighting the potential of the builder toolkit, making the analogy of a build-a-bear for EMR functionality. To take the example of Roman, Jonathan was incredulous about the fact that this organization might have to pay for a full featured EMR when they really just want to write a few specific prescriptions. Keeping his same shocked tone, he notes that the full EMRs don’t even have any information about prospective members on the platform. The builder toolkit will start with patient relationship management functionality, then move into provider workflows, and eventually payment.

“[Zus] feels like an intellectual, agile iteration…of the old model — the atomic unit of all medicine is this insurance claim…every medical record, every system, all can be mapped back to a fee for service claim, even a duplicate…If you were to think about disease, wellness, comfort, safety, that is not what you would do, right, you would map it back to a person or a problem, or a plan, or maybe all three”

• On the market need Zus is addressing: Building workflows for delivering care is hard. Jonathan saw that clearly when he built athenanet and in that case, he was able to spread the cost of building those workflows over ~118k doctors in the US. As he was “sitting around the house hoping someone would call in order for me to do something with my life” he noticed that a lot of the companies he was on the board of (notably Firefly Health) were looking into building their own specialized workflows, but they just weren’t going to get across the desert. By building a “build-a-bear” for these types of specialized workflows and spreading the cost over the various tech-enabled care delivery organizations, Jonathan thinks he can enable these businesses to build a better mousetrap to improve the consumer experience.
• The reluctant CEO: Jonathan is infatuated with the idea of a platform business because it means he’s enabling other companies to innovate without having to convince every consumer of the value of the platform. He recounts the trials of setting up his projector in the breakroom at a hospital to give them his pitch, then training others to give the pitch, then training the people to do the account management and after a few iterations you have this massive company. Instead, he hopes that Zus is going to be a “biodiversity multiplier” that enables more CEOs to bring innovation to more consumers in a more scalable way.

“I barely want to be a CEO again, and the fact that I’m now only a CEO of a very small number of very high caliber people that are only working for in turn, entrepreneurs, CEOs and CTOs. [It] feels like I’m not going back and trying to you know, get out the leases like Willy Loman.”

Note: Willy Loman is a fictional character from “Death of a Salesman”

• Growth pathways for Zus: The first wave is going to include the universe of digital-first providers, focused on solving issues related to patient relationship management. If the first wave is successful, Jonathan believes they’ll have an interesting set of data points on millions of Americans. The second wave of customers will then be traditional providers that may want to plug into Zus as a data resource — Jonathan is careful to note that they don’t necessarily want to replace the EMRs for these customers. Finally, the third wave could be the employers and employees themselves — suggesting that in the same way LinkedIn profiles have replaced resumes, Zus profiles may replace health records that individuals maintain themselves.

28:00 — END — Innovation in healthcare more broadly

• Broader healthcare forces spurring innovation: Jonathan wants to see doctors making a lot of money by making healthcare cheaper. He walked through several examples of how we’re getting there, but focused on the importance of technology to create marketplaces and to encourage more data sharing that enables a more connected care delivery system.
• On tackling an ambitious vision: Jonathan loves the idea of agile development as a metaphor for solving problems. He believes entrepreneurs and innovators should focus on solving one problem at a time for customers right now and use the ambitious vision as a longer term goal to get to over time. Two major errors Jonathan has seen innovators make are 1) getting too big a customer too early and 2) biting off more than they can chew in terms of scope. In both these situations, when/if they fail, there’s so much that likely went wrong that they don’t know where they left off at death and “it’s hard for the next guy to pick up the rifle and keep going up the hill”.

“This idea of a moon shot into anything is annoying, you know, it’s just silly…Find a job to do that’s worth doing that is in the vein of a vision that is inspiring, knowing that it ain’t going to go the way you imagined”

……..

We are so appreciative to Jonathan for joining us on this episode of The Pulse Podcast! Subscribe for our new releases on Twitter, Spotify or Apple podcasts.