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False Positive in Closing the Loop

by Jonathan Bush, President & CEO

Thanks for reading the blog Dr. Dudley, and thank you for sending in your comment.

For anyone who missed it, Tim Dudley—former user of a pained, old school EMR and once nervous athenahealth prospect—pointed out the usual downside scenario of any results-based marketplace; it’s hard to account for wind in your face. As you suspected, Tim, it’s true that major drivers of “open loop” orders in our network are actually related to patients who bug out. They don’t want to pay or co-pay or (like me) they don’t want to be handled by a urologist but don’t want to admit it to their female MD! This is the same story line that caused resistance to capitation back in the day…or episodic rates, etc.

It’s all true!

But, where athenahealth’s revenue is concerned, I’m ready to take that in stride. So, in the case of athenaClinicals, I’m okay with the fact that the open loop order will cost athenahealth revenue even if we do everything right! We expect that to happen, and we will adjust our pricing so that we are more or less made whole, but, mostly, I believe that we will GET BETTER at closing those open loops if there is money at risk for us than we will if there is only “good will” at risk.

I had the exact same experience eight years ago when I told my employees that their bonuses would be driven by the DAR and bad debt of our clients.

  • “But what if they suck?” was one anonymous question read at a company meeting back then.
  • “What if the sales team ends up with more inner city clinics that are dependent on Medicaid?” read another.

To these questions, I used that age-old, enlightened management technique: insert thumbs in ears. Nevertheless, as the bonuses started to roll, teams started slicing and dicing our DAR across clients, specialties, markets and the supply chain. The relentless, unfeeling pressure of our tiny little marketplace actually caused our employee base to understand these numbers and their drivers WAY better than they would have without the pressure. Earlier in the history of the company, our clients’ DAR was much higher than the most recent 39.7 average.

By the way, I’m not saying that athenahealth is going to put CLIENT revenue at risk. I’m only talking about OUR revenue…and perhaps some bonus money for clients that they aren’t getting today.

Don Berwick recently stepped down from the helm of Medicare and Medicaid. While I hate to quote him, since he would never meet with me (I’m still free Don!), among his parting shots as to why health care is so expensive were, according to the article:  the failure to coordinate care, administrative complexity of the health care system and burdensome rules and fraud. The only way everyone is going to keep at the constant revisions and tweaks needed to separate the false positives and false negatives that Dr. Dudley points out will be a constant and reliable marketplace with an easily imaginable upside for figuring it out.

Net net, you are right about the false positives and the slag in the system today. The thing is, I truly believe the only way to bust through that stuff and bring it under control…is to be at financial risk for it!

 Hope that helps.

Jonathan Bush is the President and CEO of athenahealth.

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