This morning, I attended a program at the Massachusetts Technology Leadership forum featuring John Lewis, Regional VP of Sales, of athenahealth. John's presentation centered on his company's experiences of selling what he referred to as health care's first cloud-based service.
Following on the heels of recent conversations, I've had with CIOs, about placing confidential patient data in the cloud; I expected John to tell us how he overcomes this objection. Instead, he spent the morning convincing us that operating in the cloud is his company's competitive advantage. John supported this thesis with figures, facts, and logic.
athenahealth supports 33,000 health care providers and processes $5 billion in collections/year. The company has a 30% growth rate. This growth rate is an indication of satisfaction-since as a SaaS provider, athenahealth's success depends on client renewals.
The company also offers an Electronic Medical Record (EMR) application and a patient portal. John told us that the majority of recent prospects have been buying both the revenue cycle and the EMR products.
Health care standardization has been slowly evolving for the last twenty years. Nevertheless, it is still largely a world of "one off" transactions.
Each patient is different, has different ailments, and therefore requires different treatments. Each health care provider has a different system for treating patients and recording the services and results.
Some of this variation is attributable to the differences between patients. Some is an artifact of a largely manual system that has made it difficult to group like patients and develop standards of care.
To complicate matters, each health care payer pays differently. This is because payers' rates take into account volume discounts. Furthermore, health care providers sometimes need to collect payments from more than one payer for a single patient.
John argues that by providing services in the cloud, one of the main advantages athenahealth offers its customers is simplification of a complex process. Because the company process claims for thousands of practices, it collects a lot of data and can spot, and respond to, trends quickly.
Visibility leads to continuous improvement
The company's original goal was to speed up revenue cycle payments and reduce receivables. They did so by reducing the number of claims that payers reject.
The company constantly analyzes the revenue cycle to identify hiccups in the system. Each time a payer rejects a claim for any of its practices, athenahealth updates a central rules set.
Anything the company learns on behalf of one practice benefits all the practices. Today, the company flags most errors before the claims reach the payer. Because claims go in right the first time, practices also save on small claims that its clients wouldn't formerly have bothered to reprocess.
athenahealth also uses knowledge management to help its clients comply with meaningful use criteria. For example, the company noticed that a lot of clients were falling behind in measuring demographics. Once it spotted the problem, athenahealth developed a program that taught users to ask patients about their races, so that the practices could then qualify for greater reimbursement.
athenahealth now reviews the data to spot opportunities to streamline practice workflow. For example, they now batch all their clients' claims before delivering them to payers.
There's power in numbers
What struck me as interesting, is that John indicated that because, athenahealth serves so many practices, they are-or will soon be-in a position to negotiate with other parties about the way in which the two entities exchange information. If so, this may be an important step in accelerating data standardization in health care.
Responding to change
John points out that his company's cloud-based solution is particularly compelling when you consider how quickly health care is changing. Since everyone is running on the same instance of software, athenahealth can respond to changing rules quickly-without requiring clients to install new software. For example, when athenahealth obtained certification for its software, all of its users received certification at the same time.
Readiness for bundled payments
When someone asked whether bundled payments would erode athenahealth's competitive advantage, John responded that the company already supports capitated practices. He said that while fees may decrease on the revenue cycle side, the complexities associated with health care payment will merely shift to the clinical side.
Will cloud solutions triumph?
The jury is out. Hospitals are under pressure to contain costs, but patient privacy remains important.
Even though IT professionals in other regulated industries are also beginning to move data to the cloud, John admits that his is still a missionary sell. Nevertheless, the facts, figures, and logic that John presented convinced me that athenahealth offers advantages that many practices find appealing. The bonus will be accelerated data standardization if athenahealth gains sufficient market power to influence some of the parties with which it exchanges information.
See examples of how BB Marketing Plus works with health care clients in the health care marketing section of this website.