“Un-breaking” healthcare: athenahealth’s use of electronic health records
athenahealth is using technology to improve the healthcare system – but can its model compete with larger companies?
I spent the last few minutes of my doctor’s visit in early 2013 in silence, as my doctor clumsily typed away notes about my progress. He apologized before he started typing, complaining that he was being forced to transition from paper-based notes to a new computer-based system with which he was unfamiliar. This moment was awkward, but it represented an important trend in healthcare delivery improvement.
Electronic Health Records in the U.S.
In 2015, 84% of primary care physicians in the United States used electronic health records (EHRs). The U.S. trails countries like Australia and the United Kingdom in this respect, where EHR penetration levels among primary care physicians were 92% and 98%, respectively.[1] This discrepancy represents both a performance gap for the United States and an opportunity for continued innovation. The quality benefits of shifting to EHRs are well known; as a result, EHRs have been promoted by the Obama administration and a number of prestigious hospital systems, such as Partners HealthCare.[2,3] A University of Michigan study found that an increase in EHR usage by 1 standard deviation was associated with a 5.3% increase in physician productivity.[4] However, these innovations have not made their way into every American’s primary care visit, which is shocking considering the amount of health care spending in the U.S. — over 17% of GDP and over $9,000 per capita.[5]
Enter athenahealth
athenahealth is one of the companies taking on the challenge of improving health care operations at scale. It aims to not only give providers access to EHRs but also optimize their usage of EHRs over time. In addition, athenahealth provides a number of technology and cloud-based services to practices to help manage various challenges embedded in the operations of a typical physician practice, including revenue cycle management and clinical decision support.[6]
One of the most salient features of athenahealth’s offering is that it provides very little customization to its customers. Rather, it runs a single instance of its software across all of its providers in a cloud-based network fashion.[7] There are a number of benefits to this approach:
- Scale: athenahealth can scale its growth relatively quickly by providing a consistent product to a variety of new customers that takes much less time to install and upgrade than a customized product.
- Best practice sharing and optimization: athenahealth can collect a ton of data from providers simultaneously regarding their productivity with the service. If athenahealth discovers an optimization opportunity from one provider group, it can easily adjust its product to benefit all of its providers.
- Lower upfront costs: less installation time allows athenahealth to spend less on labor designing and setting up the product, which makes it more affordable for athenahealth to acquire new customers. On the provider side, athenahealth doesn’t have to charge high setup fees. In fact, for many of its products, athenahealth charges nothing upfront. Instead, athenahealth makes money only when its providers are appropriately reimbursed, aligning its business incentives with the provider’s operations.[8]
Opportunities
Looking ahead to the future, there are at least two potential areas in which athenahealth should focus its energies:
- Moving from primary care to hospitals: While healthcare overall is a sizable portion of U.S. GDP, hospital care is the largest single component of health care spending (~32%).[9] With that said, athenahealth only holds significant market share within primary care – it’s not even mentioned among the top hospital EHRs despite the fact that it provides the service.[10] Its lack of customization leads to product features that are less robust than what large academic medical centers require. However, there may be significant revenue upside in competing in the hospital market.
- Building interoperability with other EHRs: Across the country, there has been a recent trend of consolidation in the provider market, with many providers merging (or developing clinical affiliations) with each other.[11] If an athenahealth customer gets acquired by a non-athenahealth customer, athenahealth may lose that customer if the acquirer implements its system across its consolidated network. While athenahealth can attempt to win in the hospital market, a more feasible approach to defending revenue might be to try to allow its technology to communicate with that of nearby competitors.
The work of athenahealth and a number of its competitors is incredibly important for the future of health care, although it often goes overlooked when compared to more “high-tech” innovations. Achieving the basic goal of appropriate information-sharing is a difficult challenge to solve, but it’s fundamental to patient care. It has been very promising to see this aspect of the system show some signs of progress.
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References:
- “2015 International Profiles of Health Care Systems.” The Commonwealth Fund, January 2016.
- Partners HealthCare, 2016. http://innovation.partners.org/healthcare-information-technology-hit
- Centers for Medicare and Medicaid Services, 2016. https://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/index.html?redirect=/ehrincentiveprograms/
- Adler-Milstein J, Huckman RS. The impact of electronic health record use on physician productivity. Am J Manag Care. 2013 Nov;19(10 Spec No) SP345-52. PMID: 24511889.
- “2015 International Profiles of Health Care Systems.” The Commonwealth Fund, January 2016.
- athenahealth, 2016. http://www.athenahealth.com/
- ibid
- ibid
- Centers for Medicare and Medicaid Services, “National Health Expenditures 2014 Highlights.” https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/downloads/highlights.pdf
- Green, Max. “50 things to know about the EHR market’s top 50 vendors.” Becker’s Health IT & CIO Review, Jul 6 2015. http://www.beckershospitalreview.com/healthcare-information-technology/50-things-to-know-about-the-ehr-market-s-top-vendors.html
- Cuellar, Alison Evans and Paul J. Gertner. “Trends in Hospital Consolidation: The Formation of Local Systems.” Health Affairs, vol 22 no 6, November 2003.
Featured photo credit: www.athenahealth.com
Thanks for the post. Its interesting to think of the consequences of collecting all information digitally. Once smart analysts, like HBS grads, have access to all the health care data its likely that there are many cost and performance improvements that can be found. Without electronic records completing this analysis would be much more difficult. With all the data, it would also be interesting to compare the U.S. to other health care systems that are both cheaper and give better results to find the many ways that we can improve. I think improving our health care system will be one of the big challenges for our generation.
Whatever happened to owning your own medical record?? It is your own, most-private information that comprises that record after all, and I think an argument could be made from an ethical standpoint, as well as financial, that Athena should offer a universal EHR. Financially speaking, a non-proprietary EHR system would most likely increase the conversion rate of attracting would-be customers shopping for a new health care provider. Ethically, patients would likely provide more accurate medical information to any new provider if they could bring their electronic medical record with them, which in turn would allow higher quality of care with the new provider.
Another challenge athenahealth will face with its new hospital product offering is convincing hospital systems to switch from their existing EMR system, which likely required significant up front costs to customize and train doctors on. I shadowed a physician at Brigham & Women’s hospital last week to learn more about her use of technology and the pain points she is facing as she goes through a typical day. She was using the EPIC system and had become a “super user” by spending extra time programming shortcuts and templates for her department. Although she said she doesn’t love everything about it, EPIC has become a core part of her daily activities and she is starting to capture the benefits as her patients progress through their care and she tracks them in the system. To differentiate from such established vendors as EPIC, athenahealth will need to provide not only a better product but a more responsive product that doctors believe will better serve their needs. The hospital value proposition differs from the value they are offering primary care (namely, their one-size-fits-all, plug-and-play solution). It will be interesting to see how athenahealth evolves its product strategy as it seeks to maintain its impressive year-over-year revenue growth levels.
I agree with Joanna’s comments – it will take a lot for them to compete with the established EMR systems at hospitals or even at PCP’s that are already using a system. Another point that I didn’t see in your post is how athenahealth interfaces with patients. I did some reading on their website and was pleased to see that they have a patient portal allowing them to review their health history, sign practice forms, pay bills, schedule appointments, communicate with doctors… They have also made the portal mobile and accessible 24/7. Some next steps could be including accessibility to radiology images, ability to share the EHR with specialists or other physicians, connection to pharmacies to manage prescriptions, or incorporating lifestyle content to help drive behavioral changes to improve or manage health conditions.
Source: http://www.athenahealth.com/practice/athenacommunicator/patient-engagement; Accessed: November 20, 2016
Given the problem you describe in the introduction (only 84% of PCPs use EHRs in the US), I’m not sure if I agree with the opportunity to move into the hospital space. As others have noted, this is a very competitive, mature market and the type of functionality a hospital EHR system requires is very different to what is needed in primary care.
I would think adjacencies to primary care would be a far more attractive growth direction for athena. What about extending functionality to get end-to-end integration for a patient with chronic disease? E.g. someone with diabetes sees a dietician, an endocrinologist, a podiatrist, a cardiologist, a pharmacist, a wound care nurse as well as a PCP–all out of hospital. I would be interested in seeing the EHR penetration of these areas of healthcare and weighing up the attractiveness of this growth direction vs that of hospitals.
Great post!
I think many of my thoughts are summarized by the commenters above, but I guess my main concern is what happens when a few corporations own the majority of health information in the country. With all of that data, you could see the benefit of them being able to maybe send out a reminder to you that hey, because of your history, you are more prone to this disease, so come get that checked out. Or you could see the opposite, where they want to charge you more because you are a higher risk patient. Also, with the consolidation as you noted, it becomes an increasingly scary place for hackers. Imagine the fear that could be inspired by having access to so many American’s health records.
It is clearly the future, but as with all technological disruption, the downside can look scary.
Great post! I think another key opportunity for aethenahealth is partnering with companies like Flatiron Health to consolidate the vast array of data available through analyzing EHRs to make the data useable and useful towards improving healthcare overall. Also, are these EHR platforms between PCP offices talking to each other and learning best practices through each other? This could be another way for aethenahealth to differentiate their positioning as an EHR in a way they are more appropriate for given their system has no customization theorhetically making consolidation of information and cross communication easier.
Great post. As you mentioned, the importance of interoperability among EHR systems is paramount. This administration is extremely focused on the lack of interoperability that exists between most EHRs and with Cerner (Siemens) and Epic, in particular. On average, a single interface between EHRs can cost between $5,000 – $10,000 and hundreds-to-thousands of these interfaces may be required across a large, integrated delivery system. While the ONC has issued a report and is pressuring the EHR vendors to ‘open’ their
systems and eliminate any/all interoperability fees, the duopolies of Cerner and Epic have been slow to
proactively act. In March, HHS Secretary Burwell introduced the Interoperability Pledge, a joint commitment with number of healthcare providers and health IT companies to make patients’ data more accessible and transparent, as well as implement national interoperability practices. The companies who have taken the pledge include Epic, Cerner, Allscripts, athenahealth, and Meditech (which together provide ~90% of the EMRs in the U.S.) and some of the largest private healthcare systems, including HCA, Community Health Systems, Ascension Health, Intermountain, and Kaiser, so we all look forward to seeing improvements in interoperability moving forward.