Athenahealth on How Acquisitions Led to
New Products

Karl Zachar is VP of Business Development at athenahealth  and is in charge of mergers and acquisitions and strategic partnerships. Zachar will participate in a fireside chat: The Anatomy of a Successful Partnership at Spring Fling: Matchpoint Boston. Read other interviews from the series here

Matthew Holt: You guys have actually created a couple of new products in part by acquisition. So I want you to talk a little bit about what the product line is now and how it came to be.

Karl Zachar: I think you were referring to athenaCoordinator which was something we had on the drawing board for several years here at athena and was launched with our acquisition of ProxsysathenaCoordinator  allows a real,  economically sustainable model for patient referrals connecting hospitals with non-employed, affliated providers in the community.

So, we’re excited about athenaCoordinator because it’s a working example of Health Information Exchange.  Think of it as a “real” HIE – one with a sustainable business model.  Coordinator helps facilitate the coordination of care between “sending” providers and “receiving” providers – using athena’s terminology. Finally, we’ve created a unique model to be able to exchange information and make that information flow seamlessly and more efficiently in the transfer of a patient data from primary care physician to specialist or hospital.

Matthew Holt: And that also contributes to the bottom line, but also the physician and the hospital in terms of not only making efficiency but also some revenue transfer there as well.

Karl Zachar: So that was at the core of our thought process which ultimately led to this acquisition.  The strategic problem athena wanted to solve was: how does athena create an economically sustainable model where the sending physician (in this case, the primary care physician), the receiving physician (the specialist or the hospital), the payer, and the patient all  benefit from better care coordination?   This is driving the strategy behind athenaCoordinator.

Matthew Holt: Why don’t you sketch up sort of the general directions that you guys are going in now and then we’ll talk a little bit about what that might mean in terms of products and things you like?

Karl Zachar: Two of athena’s services have come via acquisitions: Communicator and Coordinator. So back to the question where are we looking next? There are four areas we’re are currently focused on for the next five to ten years.

First is developing tools and data to help providers thrive in the new ACO and risk-sharing reimbursement environment that will dictate the future of healthcare.  athena’s cloud based architecture is uniquely positioned to help healthcare providers have all the information and tools they need to take on the shared risk by giving them real time, relevant information at the point of care.  It’s a beautiful vision.  Imagine if your doctor had a consolidated, comprehensive record of all your health and wellness.  Then, she would have the tools at her fingertips to provide the best care and quality.  In this scenario, everyone wins.  That’s where healthcare needs to go.

The second focus is the patient.  To date, most technology solutions have done nothing to enhance the patient-physician interaction.  We are looking for solutions that enhance  intimate time between care giver and receiver.

The third area we’re focused is data.  athena’s platform – being cloud-based and a single instance of software – allows us to have very valuable, realtime data which is could be helpful to many players in the healthcare ecosystem –  whether it be payers, the government, manufacturers, pharma, employers, and others who can use the data to better our healthcare delivery system.

And then finally, we are keenly focused on large healthcare enterprises where we’re constantly finding ways to add value. Coordinator clearly was the first step into the enterprise.  Most hospitals are very interested in expanding their presence in the community expanding their ability to connect , and becoming better partners with physicians that are living in the surrounding communities but aren’t necessarily employed by the hospital.

In summary, Athena is constantly looking for creative ways to increase efficiency and productivity for providers and patients.  Athena’s “hedgehog” has always been – getting medical care givers paid for doing the right thing.

Matthew Holt: So in terms of, and that obviously gives you a large range of options in terms of things that you can plug in. There are probably two different ways of thinking about this and we’ve had some discussions with athena about both of them.

One is obviously, you can make acquisitions, plug-in, add another products on. The other you can do is, and I think Ed Park talked a little bit about this, is open up the API and have other people build into that and work in partnerships. So there’s sort of combination of things you can do to grow the ecosystem. Now you have obvious large basis of solutions you are using. Can you give a sense of where you guys are in that patent now and then I’ll also ask you a little bit more philosophical questions about how you go about this.

Karl Zachar: Athena is very interested in speaking with companies in all difference stages of their development that provide physicians the tools they need to be more efficient and more productive in doing what they do best, which is helping patients.

So, as you can see, we’ve been somewhat active on the acquisition front. But we’ve been more active, and we’re spending more of our efforts on a partnership strategy called More Disruption Please or “MDP”.  We want to partner with disruptive innovators, invite them onto athena’s MDP network so our approximately 35,000 providers can benefit from their innovation.

Over the next 12 months, I think you will see us develop many more partnerships with companies that share a similar philosophy to ours.  We’ll partner with those companies and allow them to interact our providers on the athenaNet platform.

Matthew Holt: Fantastic. Okay, very last thing. If I had Jonathan Bush  on the line with me, what would he say athenahealth would look like in 10 years time in terms of an organization or company, those areas you serve? Would you be comprehensive across all those scales or would you be still rooted in the physician market?

Karl Zachar: Despite Jonathan’s wildman appearance and athena’s terrific growth, athena has a singular, laser focus on aligning everything we do with our physicians.  Athena’s mission is to be the most trusted service and partner for this cohort.  That sharp focus singlehandedly accounts for our successful to date and has allowed us to grow faster than all our competitors.

Today, Athena serves approximately 35,000 providers.  Our tactical goal has always been to grow to serve 100,000 providers. But once we ring the bell at 100,000, I am sure we will set a higher goal.

More importantly, our strategic goal is to make athenaNet THE healthcare delivery platform for efficient and open exchange of healthcare information.  We will then invite disruptive, innovative health 2.0 type companies to partner with us and take advantage of athena’s open platform.  When we accomplish this, every stakeholder in healthcare will win.

Every athenista is working hard to see athena become THE health information backbone for all our providers rather than a product or services company. In five years, Athena will be known as an open platform company for every provider, patient, payer and stakeholder in the healthcare system. Creating this efficient information marketplace will make our physicians, our patients, our shareholders and every athenista very, very happy.

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