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The Free Market, the Unrestrained Consumer, and Jonathan Bush’s Solution to Healthcare costs

Jonathan Bush Sq

Many observers have lamented the lack of a true market in health care, and tomes have been written about the rampant distortions in the system. Large provider networks battle large insurers in a game of chicken to set prices. Patients don’t have enough information to make good choices. Costs are hidden from patients by a cascade of employer, insurer, and provider policies. And the US government ultimately provides most of the money.

One of the most prominent advocates for a health care market is Jonathan Bush, a regular speaker at health conferences and author of the recent book Where Does It Hurt? To achieve the potent mix he envisions of innovative entrepreneurship, rich data sets, and long-term care for chronic conditions, he calls for a light regulatory hand and for smashing the current oligopoly in health care.

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Government (Or, How My Cousin the President Nearly Killed My Company)

Screen Shot 2014-05-14 at 8.03.26 AMI WAS NOW the CEO of a rising medical data company.We built automated systems to handle the administrative chores for thousands of medical practices. They didn’t buy anything from us. Instead, they subscribed to a service on the Internet.

This was what would later be called a cloud-based service, but in these early days of Internet era, we were still searching for a name for it. My partner Todd used to say in speeches that he would give Polynesian fruit baskets for life to anyone who came up with a single name for the combination of software, knowledge and work that we were selling. We had moved back east and had a new headquarters in a historic brick armory building along the Charles River near Boston.

Our future looked fabulous, except for one problem: My cousin, the 43rd president of the United States, was about to sign a bill that could destroy us.

This bill, like so many governments initiatives, stemmed from the best of intentions. The idea was to encourage the migration of the health care industry from cumbersome binders full of paper to electronic records. How was this to be accomplished? Well, hospitals and doctors were forbidden by so-called anti-kickback laws from exchanging services, information or products of value with each other. (It’s a law that infuriates me, for reasons I’ll go into later.) The bill before Congress in 2004 offered a regulatory safe harbor for hospitals to provide doctors with all the digital technology the bureaucrats could think of: servers, software licences, and training. That was absolutely the right answer . . . for 1982. The long and short was that hospitals could buy all the old stuff from our competitors, but none of the new still-to-be-named services from us. As often happens, the technology was advancing much faster than the law.

I caught the shuttle down to Washington and commenced lobbying with the fervor of a man with a gun to his head. I raced up and down the marble halls Congress, looking for someone, anyone, who would take the time to learn why this bill was so very wrong, so backward, so devastating, so lethal—at least to athenahealth.

But let me tell you, if you walk into Congressional offices sputtering about a clause in a bill that practically no one has read, something that has to do with hardware and software and online services, people tend to hurry away, or point you toward the door. I could find no one to pay attention. And as I grew more frantic, I started talking louder and faster. That didn’t help things.

Some might find my frustration strange, considering that during this drama my cousin was sitting a mile away, in the Oval Office. Wouldn’t a Bush, facing legislative trouble in Washington, contact someone in the White House entourage? The answer is no. Placing a call to him was not even a remote possibility. For starters, it’s unethical. It is also politically foolish. It would place him, me, and my company in scandal and bring shame upon our family. I would be much more willing to climb the steeple of the tallest church and bungee jump naked in the middle of the night than to call my cousin. And even if I were dumb enough to make the call, I trust George would have the good sense to tell me to get lost.

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Knocking the Palooza Out of the Data

Just back from the Health Datapalooza confab that took place last week – an event now in its 4th year hosted by the federal government. I had a few lingering thoughts to share. First, on the event name: I’m guessing it came out of my old business partner and current national CTO Todd Park’s experience in Washington, where trying to get any single distinct thought through “the interests” could knock the “palooza” out of a grown stallion.

You’d think the federal government would be the last ones to host a Datapalooza, but the fact is NO ONE ELSE has stepped up!

So they did.

And complain as I might about the G-men and G-women being industry conference conveners (makes me want to bathe with a wire brush) they pulled it off pretty darn well. The Department of Health & Human Services (HHS) attracted hundreds of serious entrepreneurs… and hundreds more wannabes (who real entrepreneurs desperately need in order to feel cool).

And boy were there some great bloopers…

Kaiser came blistering onto the scene with an open API—to the location and hours of operation of its facilities! Kinda sounds like Yelp to me…I’d be surprised if developers will come a runnin’ to that one. Kaiser’s CIO (a very cool guy whom they or anyone in health care would be lucky to get) broke this news in a two-minute keynote speech. Imagine President Obama announcing, in a State of the Union address, that the green vegetables in the White House cafeteria were now much crunchier!

HHS Secretary Kathleen Sebelius applied similarly excessive fanfare announcing the release of cost data for 30 ambulatory procedures. The whole idea that Toddy (Park) was trying to get going with this Palooza was not to release REPORTS on things but to release the SOURCE data so that anyone with proper security and privacy clearance could INVENT a million reports that no one had ever conceived before!

So here are my thoughts on all of this, some of which I shared at the conference in my way-longer-than-two-minute keynote:

1. Release the data!! Secretary Sebelius announcing the release of cost data for 30 ambulatory procedures during her keynote felt like the Secretary of Energy serving up a can of 10W30 to oil companies to drill into.

Her words were great. To wit: “The fact that this [unlocking the data] is growing by leaps and bounds is a good indication that we can leapfrog over years and decades of inaction into an exciting new future.” YES! GO GIRRRL!  OK, so…where’s the data?

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State of Disruption

Disruptive leadership. That’s a thing now? I’m told that this is a kind of leadership—I thought it was a market dynamic.

Hmmm…

What does it take to be a “disruptive” leader?

Does it mean talk like a pirate when explaining how the company will be cutting benefits?

Does it mean dress like Ali G and try to imitate him but only muster a WASP accent?

I suppose it does…but that’s the easy part.

Job #1 in leading a true market disruptive: FIND AND FERTILIZE THE HIDDEN RAGE AT THE STATUS QUO THAT LIES WITHIN ALL OF US. Find it in yourself and feed it and then find it in others and attract them to work with you.

I’m constantly looking for change in my personal life. For example, I just bought a Tesla. My other car is a 1983 Land Rover. Why? Because in 1983 you didn’t need to sell cars with a seatbelt dinger and airbags in the front seat andD because Tesla is the first ATTACKER disruptive car maker to make it past the fetal stage in my entire life. I must feed them. I HATE the established car industry! I have been trapped inside a small number of culturally (and occasionally financially) bankrupt brands that have lost any interest in fighting the over-regulated morass that constraints.

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Scaling is Hard. Case Study: athenahealth

There are many companies that are competing to be the “operating system” for small businesses. The theory is that with the advent of the cloud in the digital age, small businesses can leverage a suite of services from a technology vendor to manage all aspects of their work – from payments to record-keeping to marketing to customer communications.  Among those competing for this vision are PayPal/eBay, Square and Groupon, with each struggling to pull together pieces of the equation and, importantly, reach the small business in a cost-efficient manner at scale.

One company in Watertown, Massachusetts has been executing on this vision for over a decade with a winning approach for one vertical slice of the small business market:  physicians.  Although this is not typically how athenahealth is described, it is one way to describe what they are doing that mainstream members of the technology community might understand.  I have found it pretty amazing that so few people in the tech community know their story or understand the scale and scope of what they have achieved.  That is why I’ve chosen athenahealth for the third in my series on scaling (following Akamai and TripAdvisor).

Founding Story:  A Pivot

Athenahealth version 1.0 was a complete failure.  The company was originally founded in 1997 by Jonathan Bush (1st cousin of George W.) and Todd Park, a pair of Booz Allen consultants, as a physician practice management company for obstetrics.

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What Happens Next? 2.0 Edition

Those of us who worry about the government creeping into all our lives can now stop fussing and fighting, cry it all out, and move on to implementing the Affordable Care Act (ACA).

But first, we need two core competencies: the ability to integrate health information across providers AND (soon thereafter) the ability to separate signal from noise.

Both of these competencies will require a propagation of the cloud. Let me explain why.

Our work in the health care (EHR) marketplace remains the same as if the ACA had been reversed…and it’s the same work we SHOULD have done years ago. That is, to treat the information that gets generated during the provision of care as if the consumer was actually paying for it. Because, in fact, they ARE paying for it and always have been—but the disintermediation by both third-party payers and the government has allowed us, as providers of health care services, to get pretty sloppy with the information that gets created in the name of client care.

While they are becoming more empowered, consumers haven’t throttled us during those instances when they must submit to a second test because the first result got fumbled somewhere in the care chain. Now, as each state goes for the federal dollars provided to them in the Affordable Care Act (ACA), they’ll feel greater pressure to…well…not lose information, and be able to provide it to any appropriate care giver who needs it. All while still trying to balance their budgets.

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Heady Times for Health Care in the Cloud

In 1990, when I got my first health care job driving ambulances, not a soul in the New Orleans EMS department had a cellphone. Not even the head of the service. The mayor, his chief of staff and the police chief each had one. That was about it. These phones weighed like 15 pounds and were hardwired to a car battery. And we ambulance drivers documented our care on “run sheets” found on metal clipboards but, since so few people bothered to read them, we also wrote key vital signs and other metrics on a three-inch-wide piece of white tape smacked across the patient’s abdomen.

Today, everyone in New Orleans — and everywhere else — has a cellphone. These cellphones have the computing power to find, and add to, and direct everything that anyone would need to know about a patient anywhere in the world… but they don’t do it! Today’s “do-everything” cellphones are the size of your wallet, yet most ambulance crew run sheets are still paper, found on metal clipboards. And most good patient data is still found on those three-inch-wide pieces of tape.

Why? I’ll give you one good reason and one bad one.

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Learning Hard Lessons from the RIM Story

One of our account managers sent me a link to this open letter written by a high-level employee to the leadership of Research in Motion or RIM, makers of the BlackBerry, laying out their concerns about the company. The company faces stiff competition in the smart phone market and recently announcedplans for 2,000 layoffs.

The account manager thanked me for what I have done to lead us in a way that has avoided this fate for athenahealth. So, thanks to him.

HOWEVER, I don’t think we are totally free of all eight concerns rattled off by one anonymous OG RIMMER. Here are some of her/his pleas to management and some of my thoughts on them as they apply here at athenahealth. (If you could see our internal blog version of this post, you’d see more than a dozen thoughtful comments from athenahealth employees on how they think we can learn from this story.)

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First Meaningful Use Dollars Are Just the Start

The first of our clients just got issued his Meaningful Use check. He is Dr. Allen Ferguson, a family practice doc in Eaton, Ohio. He practices in a health professional shortage area so it was a little bigger than the $18K maximum year one payment. He was thrilled and we are thrilled for him…but not ecstatic, yet.

Unlike other companies, our goal is not and was never to build an application that could only be used to get a bonus like the Meaningful Use bonus. It is to actually GET EVERY BONUS available and every payment dollar deserved by every doc on our network.  Our mantra for each service team is this: Be the best in the world at getting docs paid for doing the right thing.

This presents a two-fold challenge in this mini-era of Meaningful Use bonus infatuation. First, we want it all, and less than all will not do.  We have guaranteed that every Medicare eligible doc on our athenaClinicals EHR service who signs up and does his or her part will in fact get it. Hence, our real measure of success is 100% of docs winning and NOT the idea that winning is possible. Second, we are committed to ensuring that every doc actually achieves the measures even though the government has taken a “don’t ask/tell” stance by requiring only that docs “attest” that they are compliant rather than show it. We can’t play that way. Since we’re on this thing called the cloud, we actually do know exactly how Meaningful Use compliant every one of our docs is and exactly what they have to do to cross the threshold to meet the definition. Continue reading…

Why CMIOs Matter, and Why We Hired One

On Monday morning, April 4, we were proud to announce that Dr. Todd Rothenhaus has come onboard here at athenahealth to serve in the role of chief medical information officer, or CMIO. It’s a new position and we’re excited he’s joined us. Among many other tasks he’ll take on, he’ll be working on various product development and physician advocacy initiatives.

So now that we’ve got one on the payroll…you might ask: what exactly is a CMIO? And why do we now have one at athenahealth?

I have always known, at a gut level, that from a sales perspective, CMIOs are more important for us to engage with early in the sales process than a traditional CIO (no offense Halamka, I still wanna be friends). In fact, we became major sponsors of CMIO magazine long before I truly appreciated the role of a CMIO!

The CMIO is almost always a doctor, but a doctor in an executive position responsible for managing the health information in a medical organization. They lead implementation of EMR and other health information technology systems. And it seems there is a Lorax element to most. Remember that Dr. Seuss favorite? Well, in the way that the Lorax speaks for the trees, the CMIOs I know speak for the other docs in their organization where management of information is concerned.Continue reading…

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