Athenahealth CEO: Hospital Leaders Should Attack Status Quo

HIT leader and now author, Jonathan Bush, doesn't mince words. Hospital chiefs are almost all "facing in exactly the wrong direction," he says, when they should be in "assault mode" against "that which is bigger and more sclerotic" than themselves.

It's National Hospital Week, and while many hospital and health system leaders and staff may be celebrating, healthcare IT leader and presidential cousin Jonathan Bush is lobbing a bombshell of a new book into the lobby.

"Where Does It Hurt? An Entrepreneur's Guide to Fixing Health Care" rolls hits the street Thursday, May 15. I will have a full review next week, but this week, the CEO and co-founder of the ambulatory EHR software maker Athenahealth tells me why he co-wrote the book, and why hospitals as we know them, due to technology and other factors, are as endangered as the traditional department store. This is an edited transcript of my conversation with Bush.

HLM: My readers are hospital executives primarily, and large healthcare systems and large practices and payers. What's your biggest piece of advice for them?

Bush: You have to be on a path to disrupting that which is bigger and more sclerotic than you, and you have to do it in a way that is ultimately going to be viewed as on society's side. And as you get bigger and more established and get more pricing power as a hospital executive, that becomes a more momentous task. But for every institution in the United States, it is possible, because you can take out the health plans.

You can take out tertiary care that's going on in other regions that should be super-regionalized, and so today, the Stone Age nature of healthcare, the largest institutions that we have, are actually relatively small at something that could be operated on a much larger scale.

[Leaders] need to move and really, by and large, almost all of them are facing in exactly the wrong direction. They're charged by their boards these days, either tacitly or explicitly, with preserving an asset, preserving market share, preserving price, preserving physician relationships.

They are not charged with destroying some other asset of someone else, and I don't mean a direct competitor. I mean a giant category larger than they.

And most hospitals, even though they operate on a social mission, they don't operate for profit necessarily, most of them. You know, they are populated by incredibly well-meaning people. When they don't try to destroy that larger obstacle that to progress, to lower cost, they are actually the problem.

So that idea of getting out of positional defense and into an assault mode is what those leaders need to try to do.

HLM: So the strategy of buying all those primary care practices up is doomed to failure?

Bush: Absolutely. I expect a lot of hospitals to rage against the dying of the light, or to explode. All the contracts are void. The doctors spin off into the community, end up admitting patients to hospitals but not be paid by them.

You can see that kind of explosion. And if they're able to cut costs drastically enough, [and] quickly enough, just the losing of the doctors will save them a lot of money. But yeah, they are aiming for a wall, and picking up speed.

HLM: Let's talk about interoperability. Epic gets its share of shots in this book, but you also mention working with Memorial Sloan-Kettering to build a connection to Athenahealth. What's the status of that? Is this book going to adversely impact that? Talk about the front lines of interoperability.

Bush: Yeah, I'm a little worried that the book, which is by me and not by Athenahealth, might punch Athenahealth in the nose a little. I hope not. I am a shareholder, so I did try to act with some grace and maturity.

Epic is not wrong. Epic works in the service of its customer, and its customer is the board of directors of hospitals, who are facing the stern of their ship. And they're saying, I need to make it harder and harder and harder for doctors to do anything else but operations in my hospital.

I don't want them to choose no operation, and I don't want them to choose operations in someone else's hospital, and so forcing them all to be on a big piece of iron that only points at me feels like a good idea, feels like a good fiduciary duty to the community of stakeholders that own that hospital.

Plus, you can spin it to where you look like a good guy, like you're focused on quality and cost. So I don't blame Epic for that. If you want to drive your car into a wall, it's not the car company's fault. If you want to buy a closed piece of big iron to keep referrals from leaking out, it's not the guy who's making the big iron's fault. That's good.

Listening to your customer and doing what they want is not bad. It currently is flying in the face of what society largely wants, and so there's a little cosmic dissonance there, but I blame Epic least, hospitals second least, and our larger culture of kind of unimaginative safety netting most.

HLM: Sure, and it's appropriate that Clay Christiansen is writing your introduction, because I immediately think of The Innovator's Dilemma.

Bush: That is exactly right. The whole reason there was a book on healthcare, The Innovator's Prescription, is because as he looked into healthcare, [and] he was like, well, why isn't healthcare acting? The Innovator's Dilemma wasn't the non-healthcare innovator's dilemma. It's the innovator's dilemma full stop.

So why on Earth does he need another book just for healthcare? This is the vexing thing. What is it about healthcare that is making the basic functioning of a demand curve and of human agency not function?

Why don't assets gravitate toward higher utilization? The most broken industries in the world, even car plants, try to utilize their lathes more efficiently every year. And hospitals, they don't do a lot of the basic things. If a hospital cuts the cost of a mammogram, they don't get more mammograms next month, and if they raise the cost of a mammogram, they don't get fewer mammograms, so of course, you've got underutilized, marginally overpriced mammograms rattling around inside of every market in the country.

Next week: My book review, and a few more thoughts from Bush.