Athenahealth on Creating a Disrupter Ecosystem

By Scott Kirsner |  October 11, 2013

Athenahealth, a publicly-traded company based near Boston, has been pretty disruptive in its own right. It helps more than 40,000 medical providers around the U.S. ditch paperwork and manage their practices digitally, with cloud-based software and services that do everything from maintain patient records, communicate with patients electronically, and most importantly, get paid for their work by insurers. In 2012, its revenues were $422 million.

But CEO Jonathan Bush likes to shake things up, and so in 2011 he hatched a program called “More Disruption Please.” Its essence can be captured in a question: How could Athenahealth become more valuable to its customers by leveraging the efforts of outside players? MDP is open to entrepreneurs and other established healthcare IT companies, and already, Bush says, 800 companies and more than 1500 individuals (such as solo entrepreneurs or consultants) have signed up to be part of the community he is creating.

“Half the docs in the country are looking at our screen every day,” he says. “The idea is that others can sell through to our client base through what you might think of as an app store. We’re the backbone.” New apps to help doctors operate more efficiently or deliver better care would increase their loyalty to Athenahealth, and the apps’ developers might introduce Athenahealth to new customers.

Of course, the biggest issue in getting MDP off the ground, Bush says, was convincing the board that it was worth it to “give up some control, and some addressable market” that Athenahealth might have captured for itself.

But, says, Bush, “We get paid a percentage of our clients’ overall collections, so the less time docs spend on administrative stuff, the more efficient they become, we do better automatically.” And, he adds, “We’ll charge a commission for supporting and servicing products that come through MDP.” One example of an early participant in MDP is iTriage, which invites patients to enter their symptoms and then tries to help them make an appointment at an appropriate nearby provider. Bush calls it “OpenTable for healthcare.”

As a start, Athenahealth has created an API (application programming interface) to give other players the ability to tie in to its doctor’s online schedules; about a half-dozen early partners have been invited to start using it. (Security and HIPAA-compliance are obviously paramount.) About a dozen partners from the MDP program are visible to Athenahealth’s users today on its marketplace; the goal is to have at least 20 up and running by the end of 2013.

Kyle Armbrester is the Athenahealth executive who oversees MDP. The initiative entails sponsoring hackathons at places like MIT and also doing some investing in early-stage businesses; a few million dollars have been set aside for that purpose. Two early investments are Vitals, a doctor reviews site, and Castlight Health, which collects information about the cost of various procedures. And the company’s search for and support of disruptive ideas in e-healthcare, Armbrester adds, “will drive our acquisition strategy.” (Last year, Athenahealth acquired one of the startups that had been part of MDP: Healthcare Data Services, focused on data analysis for providers and insurers.)

Armbrester says that two models Athenahealth looks at, in terms of companies that have created successful ecosystems around them, are and Apple. “They’ve created huge value by supporting developers and startups that want to plug in to their businesses.”

MDP also has a Twitter account, and holds an annual MDP conference in Maine, every October. Bush says that last year it attracted over 200 entrepreneurs and executives, and that he expects it to expand significantly this year. (The whiteboard drawing above is from the 2012 MDP Conference; it was done by CollectiveNext. You can click to enlarge it.)

Bush says that plenty of large, established healthcare IT players would prefer to simply sell their own software to customers that they imagine they “own.” “The establishment profits from closed-ness,” he says. But Bush’s objective with MDP is to position Athenahealth at the center of a new ecosystem of die-hard disrupters — entrepreneurs and companies helping doctors navigate the challenging waters of e-healthcare.