01 Mar 2012
Health Care’s New Frontier
Jonathan Bush / athenahealthby Deborah BlaggTopics:
What do you do if your start-up turns out to be a little too far ahead of its time? If you’re Jonathan Bush (MBA 1997), you use what you’ve learned to jump-start a successful venture in a related field.
What began as a network of holistic health-care clinics for women became athenahealth, a $245 million enterprise that provides cloud-based practice management, billing, and electronic health record services to over 31,000 medical providers across the United States. In 1997, Bush and his partner, Todd Park, both former consultants in the managed care practice of Booz Allen Hamilton, acquired an obstetrics practice in San Diego with $1.6 million in seed capital. The concept of a clinic where midwives and nurses provided quality care for healthy women with uncomplicated pregnancies quickly caught on. Within a year, athenahealth was operating 13 practices and achieving 50 percent revenue growth.
The only snag was cash flow. “It was almost impossible to get claims paid reliably or to keep track of the basic information flow among practitioners, labs, hospitals, and patients,” says Bush. “We had trouble making payroll. The existing information infrastructure couldn’t support our concept of outcomes-based, disruptive health-care delivery.”
As “the waters swirled around our noses,” Bush recalls, “Todd Park’s brother Ed came up with a web-based program to track the data we needed to get our basic claims paid.” By 1999, the nascent success of that program, called athenaNet, and the interest it attracted from investors and other medical practices convinced Bush and Park to shift the company’s focus from clinical care to Internet billing and information processing. Along the way, it relocated to Watertown, Massachusetts.
As CEO and president, the way Bush talks about that decision reveals a lot about the close-knit culture of a company that last year made the Boston Globe’s “Top Places to Work” in Massachusetts list. “With our commitment to improving women’s health care, letting go of the thrill of hearing newborns in our own clinics was devastating,” he relates. “But our mindset was we’d rather die than fail.”
Although athenahealth is now well past its heady start-up phase, the drive to innovate is still at its core. Bush spends roughly half his time fostering the atmosphere of collaboration, teaching, and learning that helps the company keep pace with clients’ needs. “Unlike some competitors that provide back-office services,” he explains, “we don’t just sell software. Our cloud-based platform gives clients the advantage of a constantly updated knowledge base that incorporates factors such as new billing requirements, insurance eligibility, and patient communication regulations. We respond as soon as new developments arise.”
Investments in constant innovation will make it difficult to sustain the 30 percent annual growth his company has enjoyed since 2006, but Bush is up for the challenge. “Irrational optimism is the basis of entrepreneurship,” he states. “You’ll never innovate if you’re afraid to stretch.”
Class of MBA 1997, Section I