Carle Health + HealthCatalyst: We keep hearing from experts that the way to improve healthcare operations is to make sure…
You’ve been in front of the media a lot lately. Cynics might say that you’re looking for a piece of the action of what Obama wants to spend on healthcare IT or trying to keep your competitors from getting it. What’s the real story?
The truth of the matter is, I don’t want anyone to get the shiny brass toy. Shiny brass toys are bad. The reason for the sudden burst of exposure is less about trying to get our share of the shiny brass toy fund than it is to try to stop the shiny brass toy fund.
The Bush Administration started with PQRI and pay-for-performance. The Obama Administration, in our opinion, should actually take the $50 billion and put it into pulling more quality data out the other end of the sausage maker, rather than mucking up the gears of the sausage maker by giving out specific EMRs.
I don’t want the Obama investment in healthcare to end up looking like the Congressional investment in General Motors, which is to say I don’t want really, really bad, dead things that ought to die sooner to be kept alive longer by a well-meaning federal government. I want software companies to die as quickly as is humane.
If the federal government gets in there and starts handing out free subsidies, then the providers of the world have to say, “Well, gee, I know it sucks, but if it’s free, does it suck that much, or maybe I should give it one more swing?” That’s what scares me to death. That’s why the interview with Wall Street Journal and with Fox and anybody else who will talk to me, including you. To make sure the Obama folks hear us saying, “Please don’t kill the emerging technologies by subsidizing the established and dying technologies in order to have something to do.”
Is the track record of doctors and hospitals who have already implemented the available technology good enough that we should be subsidizing more of the same?
The hyperbole is almost ringing as you ask. You’re the ultimate insider and I know that you know that the answer is no.
The folks who have installed this stuff are experiencing negative ROI. That’s why the RAND Institute came out with the study that showed that it’s 19% slower to have an EMR. There’s no pay-for-performance revenue to cover that 19% slowness. None of the supply chain is connected to EMRs, so all the laboratories and specialists and X-ray machines and PET scanners and mammogram machines aren’t connected to EMRs. There’s an incremental administrative cost in keeping the EMR current by typing results into the chart from these other sources of medical information.
Everybody knows in their heart of hearts that without a massive increase in pay-for-performance … it’s not really even performance at this point, it’s really pay-for-data … without a massive increase in pay-for-data in hopes that will prime the pump and we’ll figure out how the data maps to performance later. I’m sitting here looking at a row of plastic white yachts in Boca Raton and I’m thinking, “What is the definition of a yacht? A hole in the water into which one pours money.” I think of EMRs a lot like that … data yachts.
You mentioned the RAND study, which Cerner paid for at least part of. It seems they’re getting their money’s worth since Obama’s people are citing that big cost savings number like it’s gospel.
Wouldn’t it be tragic if the guys who went out early to buy this stuff got screwed? And the guys who follow along to buy the negative ROI stuff get a neutral ROI because the "I" is zero because the federal government showed up?
I don’t believe that the federal government should be involved in shiny brass object purchases. It’s like the difference between management and governance on boards of directors. The goal of the board of directors, or of the government, is to set the rules of the road for the CEO. In life and society, the goal of government is to set the rules of the road for companies. If the government intervenes and actually becomes a participant, there’s all kinds of adverse skewing that’s going to go on.
Certainly this is a world class case in point. If we end up with a Marshall Plan for EMRs, we will subsidize the approach to this that has not worked, that is certainly, among the readers of your site, clearly known to be a failed approach. We’ll keep those established players, those dominant buffoon gigundo companies, alive a little bit longer. It really feels like subsidizing General Motors. Who else would help save America from having access to cars that nobody wants?
I really feel that way about these big EMR, clinical, software-only business model companies. Nobody wants them. They’re being told that they should have them, but in their hearts, if you look at their Id, they don’t want them.
What’s nice about athena, and many other companies that are emerging, there’s a turn of companies that have actually triggered the Id. It’s good for society, and by the way, deep inside, I want it anyway. That’s what you want. That’s what the market does – it defines those things.
Should the government be in the business of pushing a specific, prescriptive technology rather than just saying, “Here are the quality and cost standards. You find the tools and methods that allow you meet them”?
You just said it. The fact that your question is phrased like the answer speaks of the irony of the mode we’re in. These are some of the most brilliant, well-meaning folks I’ve seen in the federal government in a long time. If they show up and put a fork in a lot of great innovation, it would be tragic.
I don’t think they will, honestly. I don’t think that the folks that I’ve spoken to, who are close to Obama and close to Daschle, are going to go with a Marshall Plan, “Please buy expensive shiny brass objects so the economy will be bigger.” I haven’t heard that from the folks in healthcare.
It could go either way, so we’re still very nervous and trying to get people to hear us even though we’re so tiny.
People say healthcare is behind all these other industries, especially the financial industry, which was probably the heaviest technology-using sector before it fell. Is healthcare fundamentally sound enough that now’s the time to automate what it is today?
There’s another question, which is, "What’s the right business model when you do load up on automation?" Never mind the status of the technology. What about the business model that drives the innovation of the technology?
In the financial services space, for example, in banking, nobody buys software to manage their checking account. They go to a bank and the bank provides software as part of the whole bank account experience. It’s a service. The fact that they’re increasingly enabled by software is a pleasant side effect and not the point of the business. Similarly, the Depository Trust Corporation, which settles trades for equities … they don’t sell the software. They provide it for free to all the different traders and entities that settle stock transactions. There’s huge software there, but they don’t sell you the software and say, “Good luck coordinating with everybody else.” They provide you coordination and you use software to make it easier for them to provide you with that coordination.
You mentioned the financial services sector. Very few players in the financial services sector are buying software. Most of the consumers in financial services, all of us that experience financial services software, aren’t buying the software and setting it up. Someone else is doing that and we’re using it and paying for it with our use. That’s what healthcare needs to get to. Athena’s there, but the rest of the world isn’t, and the world will get there.
I don’t even care if athena doesn’t make it. I really don’t. I really care that the model gets to a place that’s scalable, that can map to results. I honestly think we will be part of it and so it’s easy to say such things, but I really think that, most important is that we get out of this very Soviet idea of everybody has to do things according to our national standard and all of the software products will do at least sitting with our national standards.
Let go of all of that and say instead, "What results get you the most money? OK, I will deliver those results and will be morphing myself left and right to get there."
What did you think of the HIMSS recommendations to the Obama administration?
I didn’t read them yet. I just got an e-mail from HIMSS and all it said was, “It’s not February, it’s April, be sure to be there,” so I don’t know what they are. Tell me what they are.
$25 billion for certified, interoperable EHRs to bring everybody to Stage 4 of the HIMSS Analytics model …
Crap is my answer. Crap. I want to go back to the … wasn’t it John Glaser who had the three tracks? Track 1 is a little bit of money for anybody who buys an EMR. Track 2 is more money for people who can provide data. Track 3 is a ton of money for people who can provide clinical results. It made me say, "Aha, they are getting out of the muck of which tools and toys people use and saying, you guys figure it out, this is what we’re going to pay for." That made a lot of sense to me.
The idea that HIMSS is saying, “Oh, we need you to help us get tools and toys” betrays the boat show nature of the HIMSS community. “Hey, we need these big, shiny boats and we need these engines and I really gotta have this really important radar array.” No you don’t – you just have to get to the dock on time. Stop thinking of it terms of the toys and tricks and tools that you need. They’re thinking about it in terms of the inputs rather than the outputs. When I hear people talk about toys rather than results, my cynical genes act up.
The government talks about quality and software as the answer, but much of the complexity and R&D for software has to go into meeting the government’s own arcane reimbursement requirements. Is there an irony that the government wants patient care systems, but by its own financial practices, ensures that few development dollars will be left to build them?
No question. That’s the ultimate irony. But, of course, the irony within the irony is if it were really good software, they’d figure out how to handle that documentation in the background so the doctor could get back to care.
I’m reminded, amazingly, of athenaClinicals, where the documentation experience has nothing to do with the codes. We handle the codes. The doctor does what they do and if the doctor’s documentation experience doesn’t map passively-aggressively through modules of clicky-click to the right level encounter, we say, “By the way, you’re at a Level 3, did you feel this was a Level 4?” and the doctor might say, “Yes, I did feel like it was a Level 4.” And then the system will say, “Does that mean you did these other things that you didn’t click on?” and the doctor could say, “Yes, I did.”
That’s much less regulatory risk than the doctor is exposed to with a paper chart that no one can read. In fact, if the doctor is clicking on object-oriented data exclusively for the purpose of hiding from the OIG, that’s a crime. That’s a national waste of clinical resources. It’s athena’s job, and only athena’s job, which annoys me, to get that out of the way. We will handle the paperwork for the OIG and Medicare and Medicaid and we will make sure you are in the straight and narrow, that nothing in spirit or in documentation is inappropriate. We will keep you from doing something inappropriate. Among the inappropriate things we’ll keep you from doing is wasting your time away from patients being passive-aggressive with the federal government when you could be treating patients.
We have actually taken out malpractice insurance because we want to be in the same spot as the doctor.
You must feel pretty good about the Best in KLAS announcements.
I love KLAS when we’re at the top and I have questions about their methodology when we’re not (laughs). I get skittish when someone asks me to endorse KLAS when we’re at the top because I know that someday we won’t be and it won’t be for the right reasons. In the mean time, yes, I couldn’t be happier.
The majority of your implementations involve getting doctors paid. How would you explain that to someone who thinks the effort should be directly on patient care?
If I were more mature, I’d say, “Tell me more about this impacting patient care directly. Show me the regression analysis between your vision of what that means and healthcare quality.” Then I’d let them dangle because they don’t know. Documentation of standards for evaluation and management levels is driving much more of the quest for clinical quality than people admit. If I were really sophisticated, I’d be able to let somebody see that for themselves and have a major change of heart.
To me, where we actually are, as opposed to where EMRs tell us to be, and where various keynote speakers with all these things about access to care and total cost and total quality tell us to be … where we actually are, the practical, tactical details of where we are right now, is we don’t know what we ordered and we don’t know what happened to what we ordered. If we can answer those two questions, where every doctor in America knows exactly what they ordered and they know exactly what happened to those orders, the impact on real, genuine Institutes of Medicine-level clinical quality is tremendous. Tremendous. But that’s not even in the discussion right now.
At athenahealth, I’ve got 549 providers who are on athenaClinicals. For those providers, I know exactly what they ordered and I know exactly what of those orders never happened, never turned into a result. The number are devastating. It’s like over 50% of what a doctor orders never turns into a result for that doctor. Who cares that stuff the OIG wants to see if 50% of what a doctor ordered evaporates right after he orders it? That’s much more significant financially and clinically. No one talks about that because standalone EMR software can’t answer that question.
Revenue cycle management is suddenly the hottest thing in the industry, which is good for athena but also brings in new competition. Is that good or bad?
Obviously it would be great if there was no such thing as a free market and nobody decided to go build a competing solution to athenaClinicals and Collector, but that would keep us from running as hard as we are. I have the emotional maturity to acknowledge the benefit of the fact that there will be other competitors someday.
My sense is that the people at American Express are able to struggle through acceptance of the fact that there is also Discover, Mastercard, and Visa. I’m OK with the idea that there will be other revenue cycle management networks in the country someday. I’m ecstatic that they’re not out there today, but I’m accepting of the fact that it’s OK for the world that they be there someday.
I don’t want to be so arrogant as to say, “I want competitors.” To hell with that. I don’t. I wish everyone would suddenly get amnesia about how well we’re doing and not come in here. I accept that it’s good for the world that they won’t get amnesia and they will come in and they’ll push our price down and push our quality standards up. That’s OK.
Athena stock took a dip in the fall, but has rocketed back like there was no economic crisis. What’s different about athena that has let it avoid taking a price hit?
I don’t know. We did have an investor day and the timing of the recovery, back in the 30s of our stock, mapped very closely to that investor day. I’m assuming that by getting athena … we’re a very small company, relatively speaking, amongst public companies with a very small number of shares, again relatively speaking … so bringing 80 key investors in for the day and seeing who we really are and what the DNA of athenahealth is and what it promises, those 80 people could get hungry and really treat our stock with respect.
If we were bigger, it would be harder to get the whole wide world to treat our stock with the respect that it deserves, but luckily we’re small, so the elite of the investment community have said, of course, long term, Obama not Obama, Daschle not Daschle, in the end, regardless of the short signals, athena is a way to a good future and that’s got to pay off. I was ecstatic about the result and it really was a function of the 80 people who showed up at the door.
What will you do with the messaging company you bought?
We build another product that looks like Clinicals and Collector, which is to say we build an integrated, percentage-of-revenue priced, fiduciary principled, patient-compliant service. We’re not there yet. Meanwhile, we’re selling 17 cents a reminder calls. When we get it right, it’s going to be a full-on … for a small percentage of your revenue, we’ll answer 100% of your phone calls and treat every single patient you have like a Russian prince.
Is that a change in practice where you will actually take on some of the patient-facing work for doctors as a service provider?
I don’t see it as so much a change in practice. Our job is to be the best in the world at getting doctors paid. Athena’s mission statement is to be the most trusted business service for medical groups in the United States. If you want to do that, when you do research on what doctors want and what they trust, it’s people who get them paid for doing the right thing. They hate people who get them paid for doing something that they later regret they did and they hate people who don’t get them paid.
Our hedgehog, to use a business school term, is to be the best in the world at getting clinicians paid. If our strategy is to get these guys paid and connecting with patients is a key part of getting them paid, it’s no change in strategy. It’s a change in tactics.
You said early on that you hoped to preserve the company’s culture as the company grows. Have you been able to do that?
I started with an immature notion of preserving the culture. What I’ve learned is that I’ve preserved key elements of the culture, but if I was wiser, what I would have said is that I don’t want to preserve the culture, I want to keep the culture current with the journey.
For example, I’ve become much less of the class clown. Watch that Wall Street Journal interview. I didn’t even recognize myself because I was so struck with the weight of the questions and she was so thoughtful … it’s a different thing from a blonde guy jumping up and down “saying look at me, look at me" because I’m afraid no one will pay attention to me, to, “People really are paying attention, make sure you don’t mess up this answer.”
That’s my journey. There’s a similar arc to the character of our whole culture at athena, of our personality as a company. I do want to preserve what’s important about our culture, but I think what I mean to say is I want to preserve the notion of being true to our culture wherever it may be at each stage of development. Write that down and find out later whether that was the beginning of the slippery slope to evilness. I don’t think it is.
I need to be more mature, more subtle, less desperate for attention, more secure as a CEO than I did when no one had ever heard of us. We want to make sure that each iteration of our culture as we grow has the same level of integrity. I’ll die before I let go of the culture we have right now. Will our people and will our CEO lose their career, lose their reputation before letting go of the principles that are appropriate for the hour? That’s what’s consistent.
What’s appropriate for the hour will change year over year. I’ve seen that. I’m witnessing it right now. But the integrity of sticking to those principles of the hour or of the year or of the decade is the maker or breaker of whether we get to keep playing.