How medicine’s digital revolution can empower doctors and patients, with or without ObamaCare.
By JOSEPH RAGO
'It’s a little bit like talking to a young prince," says Jonathan Bush, chairman and CEO of Athenahealth, a major player in information technology services for physicians, of his recent visits to Capitol Hill. “‘So—tell me about this market thing that your people use,’” he says, mimicking the political royalty with a grin and extending his forearm. “‘Wait: I must catch my falcon!’”
Athenahealth’s headquarters, on the banks of the Charles River outside Boston, is a world away from D.C., and it’s clear, as he continues his metaphor, that Mr. Bush enjoys the distance: “And these princes, they mean well and they’re lovely,” he says, “but they’re living in this alternate universe where there’s no such thing as a market in health care and they don’t understand why one might be remotely useful.”
He pauses. “That’s weird to me.”
Mr. Bush is an outlier in the generally buttoned-down world of the health industry. He’s exuberant, hyperactive, speaking in frenetic running monologues; it’s not hard to see why the political class might be taken aback: “I still have to keep going to Washington and sucking up,” he says, switching metaphors. “Because the problem is when you have a baby with an Uzi, right, they might accidentally mow you down. But here’s the thing . . . they’re brilliant people. It’s just that the idea of a market in health care never occurred to them.”
As Mr. Bush sees it, the profound problem with U.S. health care is that there’s “no landscape of choices, or choosers.” Due to the complexity of America’s third-party laundromat for health dollars—your doctor’s clerical staff bills your treatment to an insurance company picked by your employer, and it pays him with your money via premiums or foregone wages—“few doctors in America know the actual value of the services they render.”
Athena’s core business helps them manage their practices and get paid, but the larger purpose of the company, which he and board member Todd Park co-founded in 1997, is to try to shore up health care’s resemblance to a normal market. It has grown into one of the country’s most innovative health IT firms.
Athena began as a San Diego birthing clinic and floundered because it couldn’t cope with back-office volatility. All transactions were conducted on paper. No one understood how to navigate the dense and bewildering coding rules for dozens of different insurers or the fee schedules for government payers like Medicaid. Claims were denied with no explanation or vaporized in purgatory. The clinic went bankrupt in 18 months.
With Mr. Park (who has joined the Obama administration), Athena designed a program to digitize records and automate billing. It now colonizes the wilderness of paperwork and habitual financial chaos that defines running a doctors office, and it is also moving into clinical record-keeping for individual patients. Some 15,000 physicians in 43 states use Athena as a virtual office, a number that is growing at an annual 30% clip.
It is a massive logistical undertaking. Athena’s main facility is housed in a decommissioned World War II arsenal on the Charles, where 30,000 pounds of paper is processed every month, most of the tonnage being paper checks. Incredibly, doctors also receive on average 1,185 faxes each month—mostly lab results—and those are handled too.
State Medicaid programs, by the way, are easily the worst payers, according to Athena’s annual ranking. In New York, for instance, claims must be tendered on a dead-tree form instead of electronically and in blue ink—black is grounds for rejection—and then go on to spend a full 161 days, or almost a half year, in accounts receivable.
.While streamlining this disorder frees up time for the company’s clients to treat patients, it also throws off vast data, which are fed in central servers, aggregated and analyzed. This “athenanet” system is among the few health-tech offerings based on “cloud computing”—in the sense that the applications are accessed on the Web, instead of a computer’s hard drive, allowing constant updates and refinements. If a regulation changes or an insurer adjusts a payment policy, it is reflected on athenanet almost in real time; on the clinical side, the program can adapt at the same rapid pace as medicine itself.
Mr. Bush thinks the main benefit is the “collective intelligence” that he is starting to weave together from the 87% of American physicians who practice solo or in groups of five doctors or fewer. “We found one of the last few remaining crowds in health care, which are these independent practices. Now you can argue that this decentralization is not the best thing in the world,” but what’s most important, he argues, is that “they’re still allowed to go and make their own decisions.”
In effect, as the network gets bigger, it gets smarter, while opening the space for innovations to feed off one another and spread. There really can be “radical improvement” in health care, Mr. Bush says, but only if there are “radical improvers” able to set themselves apart and lead the forward advance. “No one ever says, ‘Here’s to the average,’” he declares pointedly.
The Athena model is superior to most electronic medical record systems, or EMRs, which are generally based on static software that are inflexible, can’t link to other systems, and are sold by large corporate vendors like General Electric. One reason the digital revolution has so far passed over the health sector is sheer bad product. The adoption of EMR in health systems across the country has been dogged by cumbersome interfaces, error propagation and other drawbacks. In 2003, for instance, Cedars-Sinai in Los Angeles dumped a $34 million proprietary system after doctors staged a revolt.
.Athena also stands in marked contrast to most of the wider health-care market, which Mr. Bush argues is homogenized and rigid, and getting more so. The problem is “easily fixed by releasing some power into the arms of consumers and cutting employers and certainly the government out of it,” he says, turning to ObamaCare. "Certainly I’m not commenting on the amount of wealth redistribution that we should do as a society. Fundamentally I believe we need some, and whether the amount we’re doing today is enough or too much or not enough, that’s not my thing. If we feel like rich people should pay more for not-rich people’s health insurance, that’s fine.
“But just give them the money,” he cries. “It’s totally inefficient wealth redistribution because they can’t get creative with it. They’re not allowed by law to get creative with it.”
What Mr. Bush means is that the government imposes standardized rules and mandates with no concern for how much they will cost or who will bear the burden. Given the choice, consumers might decide on cheaper policies that cover some services but not others, or decide to run more risk.
Yet for all the talk about expanding coverage, Mr. Bush says the real problem is that “You can’t buy what you want.” Another way of putting it is that “America will have one car. Everyone will have access to transportation, which means that everyone will have a black Escalade, with spinners. That’s it. There’s no Hyundais, no bicycles, no nothing.”
And it’s scandalously unfair. “These poor people who clip the things off the backs of cans to make the tomatoes cheaper are subsidizing the hypochondriac who gets his shoulder done with an arthroscope because it clicks when he serves at tennis.”
Under ObamaCare, Mr. Bush says, “everyone is going to get health care according to the wise-men benefit panel, who will tell you exactly what it is, and then they’ll run out of money, so every year the wise panel will just squish the benefit a little. People will start to say, well, that’s not going to work for me.” For this reason he doesn’t think central health planning will have any longevity, and eventually people “will start leaking out into the [private] market once we run out of Obama energy.”
His company, he thinks, will play an important role in such a world, where individuals would have more responsibility for weighing trade-offs—which, he believes, is the only lasting way to enforce discipline in health spending: “Today it’s so complicated that the average consumer—and this is what the academics say—you can’t put the average consumer in charge, it’s too complicated. Yeah it’s too complicated! So let’s make it not complicated,” he says. Athenanet generates “clean information,” the basic price signals about health care that “a regular old consumer could look at and say, ‘That’s worth it’ or ‘I’d rather do this one on the other side of Route 128 that does it cheaper.’”
Mr. Bush is less sanguine about the White House cost-control approach of better living through technocracy and “Benthemite micromanagement.” As an illustration he singles out the idea of dispensing bonus payments to hospitals that find ways to reduce Medicare spending. If the bonus is higher than what the hospital would have been paid under the status quo, then Medicare is worse off—but if the bonus is less than what the hospital would have earned otherwise, in what sense is it an incentive to change? In other words, “I’m going to give you a dollar bill for every 10-dollar bill you give me?” Mr. Bush asks incredulously.
The irony is that Athena will likely benefit from the Project Mayhem that is about to begin. “It’s probably terrible that all this new bureaucracy is being created,” Mr. Bush says. “But there’s going to be 50 new Medicaid-type plans in these insurance exchanges, run by the same insurance commissioners, these same sort of glazed-over-looking state secretaries of health. You know, just not really the brightest bulbs in the chandeliers of the world. Medicaid, the worst payer in the country by a factor of four! Mother of pearl! So I feel a little bit like a robber baron. I am going to make oil money dealing with them.”
The double irony is that Athena—while Mr. Bush might not put it in such an impolitic way, but then again, maybe he would—is also showing that the status quo for all its flaws is capable of organic change and real progress without the blunt-force trauma Congress is likely to inflict. Or in spite of it.
Take the nearly $47 billion in stimulus cash the White House has budgeted to prime the pump for health IT adoption. Mr. Bush says he’s glad his industry is getting more attention from the bully pulpit, but that “It is kind of too bad that all these software companies that we’re really close to putting out of business, these terrible legacy companies, with code that was written in the '70s, are going to get life support. That’s why I call it the Sunny von Bülow bill. What it is, basically, is a federally sponsored sale on old-fashioned software.”
“It’s designed like a box-buying campaign,” he continues. "You get this fixed chunk of money for a few years, you get to pay off your EMR, like its a thing. People in Washington think in terms of things that we’ll buy and then they’ll be there. Buildings. Roads. Tanks. What Lockheed Martin makes. Things.
"And this isn’t that. This is a market: its a set of agreements, it’s a language. What’s needed is a way of exchanging value and making choices, that’s ethical—and, you know, nobody, nobody, not nobody, has said a word about that.
Mr. Rago is a senior editorial page writer at the Journal.