April 10, 2013|Categories: All Things EMR
Today, in Part III of Jonathan’s interview with theEditorial.com (see Parts I and II), we find out what happens when he is approached by venture capitalists while running the Athena Women’s Health birthing center. Also, Jonathan broaches the idea of ‘shopping’ in health care. Give it a read! Oh, and don’t forget to check out the interview in its entirety here. – Michelle, Social Media Manager
Question: What did you do after the VC offered you $11 million for athenaNet [athenahealth's suite of cloud-based services which includes an electronic medical record, practice management and care coordination services.]
I burned our business plan and began the process of convincing my partner who was the source of all of our real intellectual capital, Todd Park. I had to talk him into this new idea that was just as important, just as beautiful and just as significant, just as worthy of our focus and that there had to be an athenaNet in the world in order for there to be an Athena Women's Health in the world.
It was clear that the reason we weren't succeeding was that we were dying the death of a thousand paper cuts. It was just the coefficient of drag. It was this numbing exhausting sort of bureaucratic paper chase.
Trying to negotiate with the health plans was just so humiliating and horrible—to sit there and talk to these IPAs and health plan people about what we were doing and how we were spending five times as much time with women. But while it was generating huge expenses it also generated huge savings on the other side. We’d hear lines like: 'Oh, yeah, we sympathize but… or we signed an agreement so we can’t...’ There was just no entrepreneurial energy on the side of the payer, at all.
The episodic model we designed for birthing applies to pretty much everything that we do that's got any expense in health care. In fact, the Obama administration probably thinks that Todd Park, my former co-founder of athenahealth and now CTO of the U.S., is whispering in people's ears. The government announced that Medicare was going to start a program paying for ‘episodes of care’ in a global budget just as we prescribed in our first business. So, instead of paying for the anesthesiologist and the obstetrician and the hospital, you could just pay episodes.
Question: You think it's a good thing?
It's absolutely essential. What US society lacks is shopping in health care. It’s the reason that health care is the biggest hole in our humanity. The conditions necessary for innovation are many buyers rubbing up against many shoppers. The sellers shop for the buyers.
Your formaggio dude, he does not want most shoppers. If everybody from Star Market came running over to his shop, he'd be like, 'We're closed. Get outta here.' They'd be eating all the chocolate nibs from the front desk. As a seller, you want to be able to pick your customer. He sells unique sheep cheese to buyers that want that. It works.
If it was the law to make sheep cheese available for all Americans, and if there was this essential sheep cheese repository and everyone had a certain amount of their income put into a pot, and you had to prove that this person really needed sheep cheese each time they needed it, his business would look nothing like it does today. And instead he's innovated and innovated and innovated on that little theme to where it's ecstasy for a very small number of people to buy that sheep cheese at $26 a pound. As is Pea Pod, which delivers very vanilla cheese, Velveeta, to your house and puts it in your fridge and for someone who works and doesn't give a shit whether it's sheep or cow, that's perfect, right?
Question: You believe in having many shoppers with many buyers?
Yes, we must have it.
What the government's done is basically monopolized 50 percent of the market into one buyer. So the government is one buyer and its 50 percent of all the dollars in the nation and patients are not going, 'I love the way you did that. That smile was incredible. I'm going to come back here more and I'm going to stop seeing the annoying person at Boston City Hospital.' That's not happening. There are no smiles. There's compliance. Minimizing the scenario of maximum regret is the total behavior pattern of health care.
What I'm trying to do with athenahealth is figure out how to reintroduce shopping.
Question: How likely is shopping to happen?
I think the first wave of shoppers will be doctors because health care is so complicated with all of its federally mandated codes for procedures and diagnoses and diseases, that you have to actually spend a lot of time doing it to understand it well enough to shop for it. The other reason is that it's now possible for doctors to engage in payment models that reward savings. The administration has created this idea of a global risk contract called episode-based payment. There's also something called an accountable-care organization where if the total cost of a population of people you care for goes down, you get half the savings. So, now it's like, wow. The doctors can make some money by shopping for this care. But how can they shop? How much does stuff cost? How will they know?
Our vision at athenahealth is that we're going to build a national health information backbone. So, when a bus in Montreal hits you, they'll see your wallet or your bracelet and they'll punch it and they'll see your chart wherever you've been in the country.
Question: When will we see this?
We're working on it. I think we've got forty million patient records today but we've only got about four percent of the doctors. We need to have about 20 percent of the doctors for it to be relevant.
Follow Jonathan on Twitter: @Jonathan_Bush.