This year, as in past years, Healthcare Informatics has designated three vendor companies in healthcare IT as “Most Interesting Vendors,” and is featuring profiles of those three companies in its Healthcare Informatics 100 issue, which this year is our May/June issue. The “Most Interesting Vendor” designation is not an award, but simply a recognition. The trajectories of all three companies speak to some of the broader trends taking place in healthcare IT in general and in the healthcare IT vendor market, and are thus of interest to readers. On Monday, we published the story of Leidos. Yesterday, as the second of three articles, we profiled Nuance Communications. In this third article, we profile the Watertown, Mass.-based athenahealth.
In early 2015, the Watertown, Mass.-based athenahealth, the provider of ambulatory cloud-based electronic health record (EHR) systems, made quite a splash when it jumped into the hospital market with two strategic acquisitions of inpatient EHR systems. Athenahealth bought RazorInsights, a provider of cloud-based EHR systems to small, critical access hospitals, in January 2015, and then a month later announced a deal with Beth Israel Deaconess Medical Center (BIDMC) to acquire its in-house webOMR solution.
And that momentum hasn’t slowed as the company is currently working on developing its EHR solution for large hospitals and academic medical centers, through a co-development deal with the University of Toledo Medical Center (UTMC). As part of that deal, which was announced earlier this year, UTMC will transition off its current EHR and will go live on the newly developed solution, athenaOne for Hospitals & Health Systems, later this year and into next year. That deal clearly solidified athenahealth’s strategy to steadily push into the acute care EHR market for larger hospitals and health systems, putting it in direct competition with the major hospital EHR vendors such as Cerner.
When the deal was announced, athenahealth CEO Jonathan Bush said the two organizations would work together to “build a disruptive alternative to legacy health IT solutions that supports healthcare providers across the entire continuum of care.” When speaking publicly, Bush frequently refers to the company’s mission of advancing connectedness across the care continuum through its web-enabled, cloud-based services as “building the healthcare internet.”
Jonathan Bush
“There are a number of benefits that we believe we will gain from a partnership with athenahealth,” David Morlock, CEO of UTMC, says. “Athena is a proven company on the outpatient setting and they are a cutting edge group, so we saw the opportunity to move into the inpatient EMR space with them, under their model with aligned incentives. And it’s cloud-based and web-enabled, so there is the opportunity to integrate the inpatient and outpatient records.”
He continues, “The leadership at athena has a fundamental view that an EMR and healthcare IT system can be different than what we’ve seen in the marketplace over the course of the last decade, and we share that thinking with athena.”
David Morlock
The company, originally founded by Bush and Todd Park in 1997 as Athena Women’s Health, a women’s health and birthing practice in San Diego, Calif., got its start in the health IT space as a developer of practice management systems. The company has built its reputation among ambulatory providers and independent physician medical groups, while also steadily expanding its suite of network-enabled services for revenue cycle management and medical billing, patient engagement, care coordination and population health management as well as Epocrates and other point-of-care mobile apps.
The company reported $924.7 million in revenue in 2015 and was ranked No. 15 on the Healthcare Informatics 100 list this year.
Gaining Ground with Small Hospitals
With the acquisition of RazorInsights last year, athenahealth extended its presence into the 50-bed-and-under inpatient care space, which makes up about one-third of the U.S. hospital market. Started in 2010, RazorInsights, at the time of the deal, provided its cloud-based EHR systems to 25 organizations among rural, critical access, and community hospitals.
With the RazorInsights acquisition, athenahealth inherited some ready-made ancillaries, such as lab, pharmacy and radiology services, for small hospitals and has now integrated those with athenaNet to form the athenaClincials for Hospitals solution. In the past year, the company has converted existing Razor clients onto athenaClinicals for Hospitals and has sold the solution to net new small hospitals as well.
When announcing the acquisition, Bush described today’s hospital market as “woefully underserved when it comes to IT systems and IT partners that are accountable for reducing costs, increasing quality, and enabling a better patient experience.”
Erik Bermudez, research director at the Orem, Ut.-based informatics research firm KLAS, also notes that hospitals with 100 beds and smaller, and especially critical access hospitals at 25 beds and smaller, have limited budgets and resources as well as limited IT experience. “From my perspective, this is an absolutely phenomenal thing for the market,” he says, adding that athenahealth’s business model could prove to be appealing to “budget-strapped organizations.”
He continues, “You also have eClinicalWorks coming into this market as well, so we’re seeing new entrants into this smaller hospital market and that’s putting healthy pressure on the traditional players.”
Athenahealth is already reporting early success with small hospitals using the athenaClinicals and athenaCollector solutions, Jay Roxe, vice president of product marketing at athenahealth, says. The Jacksboro, Texas-based Faith Community Hospital, a 41-bed Level IV Trauma Center, was previously a Razor client and is now using athenahealth’s suite of solutions and has seen tremendous improvements with patient collections in the first quarter of this year, according to Roxe.
Athenahealth’s business model, which is based on a percentage of its clients’ collections, is distinctly different than on-premise software implementations, which typically require large up-front and ongoing expenditures to install and operate.
“It’s more of a services model than a software licensing model,” Todd Rothenhaus, athenahealth chief medical officer, said during an interview at HIMSS 2016. “Being in the cloud allows us to make frequent small iterations to our software as opposed to the release of a big update.”
Todd Rothenhaus, M.D.
Within the ambulatory space, athenahealth’s responsiveness and collaboration with customers has paid off. “It’s not uncommon for an athena client to describe athenahealth as innovative, nimble, quick, smart, agile,” Bermudez says, specifically noting the company’s cloud-based architecture that allows for regular updates and upgrades.
The company categorizes the health IT services it offers into three segments—network, knowledge and work. Athenahealth’s intelligence network, AthenaNet, serves more than 75,000 healthcare providers with 38 million patient encounters in 2015. Through its network, athenahealth processes 100 million claims each year and 1.2 billion data transactions are processed annually.
“The whole business model of athena is based on information liquidity and we’re focused on it to a large extent,” Rothenhaus says. “With our Coordinator product, we have a large interface into LapCorp and one into Quest, and we’re tackling the image centers and we’ve built interfaces to all the state registries for things like immunizations. So, if a family moves from Florida to Montana, the doctor in Montana can ping the Florida registry to look up the child’s immunizations.
Roxe says the network enables Athena to have “tremendous visibility” into payment activities and practice operations, and turns this knowledge into insights. At the company’s network operations center, essentially a “mission control,” there are teams monitoring providers’ performance. Through this knowledge, the company has developed more than 40 million automated billing rules and 1,700 clinical rules embedded into workflows.
Specifically with regard to Meaningful Use attestations, athenahealth’s customers benefit from athenahealth’s technology. “Because it’s web-based, the company can remotely monitor the utilization and reporting and attestation metrics of each individual client, and identify the gaps and essentially serve that information up in a dashboard,” Bermudez says.
As a result, 98 percent of athenahealth clients received reimbursement for Meaningful Use Stage 2 attestation, compared to the industry average of about 30 percent, Roxe says.
Settings its Sights on Larger Health Systems
In the past 18 months, the company also has made significant investments, through acquisitions and co-development deals, to gain intelligence, skill sets and experience for the inpatient setting with the goal of deploying a solution for larger hospitals and health systems.
Bryan Hinch, M.D., UTMC’s CMIO, says athenahealth approached UTMC with the idea of partnering on an inpatient solution after the University of Toledo Physicians Group rolled out the ambulatory EHR a year ago. And it’s likely, Bermudez says, that athenahealth will leverage relationships with other physicians groups to gain their hospital businesses. However, larger hospitals and health systems are more complex environments, with more moving parts, compared to smaller physician practices, he points out, and that could be a challenging transition for the company.
Bryan Hinch, M.D.
“It’s going to be a completely different ballgame and it’s going to take some different thinking. Cerner and Epic have a lot more experience in that large academic and huge health system space. Do I see them getting there in the next handful of years? Probably not. But I have been surprised with where athenahealth has gone in the past,” Bermudez says.
As part of the company’s ongoing co-development work with UTMC, athenahealth’s R&D team regularly conducts on-site visits at the 267-bed hospital in order to interview staff and shadow physicians to learn their workflows, according to Hinch. “I don’t think they are just developing an EMR with us, they want to investigate, by coming on site, what they call the “hidden industry of work,” the work that can be offloaded away from the frontline staff and physicians to make them more efficient and patient-centric,” he says.
From a health IT perspective, Hinch is optimistic about athenahealth’s integration of outpatient and inpatient systems as well as potential opportunities to develop applications through the More Disruption Please program.
“We want to work with a company that is trying to not just move the needle a little bit, they are trying to move the needle to the nth degree to improve outcomes for patients and improve physician satisfaction,” he says.
