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The Theory Behind the Guarantee

by Jonathan Bush, President & CEO

When Leon Leonwood Bean, founder of L.L.Bean, first created the infamous Bean Boot (officially known as the Maine Hunting Shoe), he sent mailers out to local fishermen and hunters to promote the new boot and guarantee complete satisfaction. Within a few weeks, 90 of the first 100 boots purchased were returned. The leather uppers had separated from the rubber bottoms. Though it almost put L.L.Bean out of business, L. L. stayed true to the guarantee and refunded the customers. After borrowing more money to perfect the boot, he put them back on the market. This winter, over 100 years later, L.L.Bean couldn’t even keep up with the demand for Bean Boots. They’ve even become the latest badge of hipsterdom.

Today, L.L.Bean continues to guarantee satisfaction on all its products. Customers are always trying to return 10 year old boots for brand new ones. But the company doesn’t get persnickety about it. The amount of business the guarantee drives (as evident by this year’s demand) more than makes up for the cost of some free boots, which may never have become a practical winter fashion statement without putting money on the line.

L. L. benefited from the true purpose of a guarantee, my friends. To the outside world, a guarantee appears to be a marketing campaign that drives you to buy something with the promise of it someday being free or replaced. But within the walls of companies, or at least at L.L.Bean and athenahealth, they are forcing factors to fix problems. Without the guarantee, Bean Boots may not have become sturdy and popular. And without the new Physician Quality Reporting System (PQRS) and Medicare Shared Savings Program (MSSP) guarantees we issued last month, we may have spent longer than we wanted floundering to figure out how providers can navigate quality and risk.

How do we make sure our clients thrive through this latest shift in the landscape? Admittedly, we don’t know how to manage the risk and results yet. These regulatory demands pack financial penalties for non-compliance, so we need to figure out how to document and apply for reimbursement, or the financial penalty will hit us now, too.

This concept isn’t new – you may recall our Meaningful Use and ICD-10 Guarantees. In fact, our first guarantee was essentially the birth of the Minimum Service Commitment (MSC) to customers. We couldn’t post Explanations of Benefits (EOBs) for crap. So we hired a company in Georgia to do it and had a winter similar to the one we’re just coming out of. Every time the temperature was below 32 degrees, our vendor shut down. In turn, sales essentially stopped because we depended heavily on referrals from clients, who weren’t getting paid because of our inabilities.

It was death by slow leaking revenue, which made it easy to put what little money we still had coming in on the line. We guaranteed our customers that if we didn’t post 95% of their EOBs within a day, we’d reimburse them 2% of our fees.** This was unpopular internally because the miss could be out of our hands, but it inspired innovation.

Suddenly, we had to rally around finding a sexy way to post EOBs on our own. Now we have a combination of two scanning operations, data entry, a rules engine and a quality assurance team. We haven’t had to pay out against this MSC for years.

Real revenue is on the line for these two new guarantees – PQRS and MSSP. If we end up paying out on either of them then we’ll consider it a marketing investment. If we don’t (which I’m betting on)…we will have mastered the next thing.


**Correction: athenahealth's Minimum Service Commitment was misquoted in this post. Our Payment Posting Minimum Service Commitment is as follows: "athenahealth commits to posting at least 95% of payment dollars within 4 business days after the date of receipt to your athenahealth P.O. Box. If we fail to meet that minimum standard, we will credit you 2% of that month’s invoice for every 1% we fall below 95%.” We apologize for the editorial error.



Jonathan Bush is the President and CEO of athenahealth.

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Comments

Submitted by Michelle Mangino - Tuesday, April 14, 2015

Hi Theresa, I'll make sure someone reaches out as soon as possible. -Michelle Mangino, social media manager, athenahealth

Submitted by Theresa Rockove - Thursday, April 9, 2015

We went live with Athena in November of 2014. We still have EOB's that are not posted within a day. We have some that are not posted within 30 days because the people in India are unable to understand how to get access to our payors websites., even though the access has been provided multiple times. I would like to know who we speak with regarding our 2% discount for the last 4 months?

Submitted by Rosetta Cherry - Wednesday, April 8, 2015

Athena does a wonderful job with the posting of EOBs, outstanding customer service. Do consider in the near future, to stop taking a percentage of meaningful use monies.

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