It may not sound edgy, but athenahealth CEO Jonathan Bush is betting on platforms for its next act.
The 21-year-old company reported a 13% growth in year-over-year 2017 revenue earlier this month, and its stock rose 12.2% the following day.
But athena still faces challenges. Even as revenue has increasingly risen since 2014, bookings fell short and fell 15.9% year-over-year in 2017.
Under pressure from activist shareholder Paul Singer and fighting less-than-expected product sales in 2017, the company is in restructuring mode. It has trimmed its workforce, tightened operations and revamped its database architecture to expand product services for clients.
Bush contends a focus on administrative tools will drive more customers onto the athena platform this year. As providers' bottom lines are challenged through softening admissions and rising labor costs, they'll need to reduce administrative costs. It's part of a broader strategy.
“Our aspiration and the reason I’m still around is because I want to build a platform company," Bush, who helped found the company in 1997, told Healthcare Dive. "A company upon which other companies can be built.”
Athena is getting some help from a heavy hitter. Former GE CEO and chairman Jeff Immelt last week was appointed as board chair.
Old companies teaching themselves new tricks
Health IT companies last year had to manage with waning client interest as millions in funding that came with the meaningful use (MU) program coming to a close. Since 2009, most hospitals and office-based physicians have adopted EHR systems.
Vendors like athena have reevaluated their products to create new revenue streams.
The major EHR players are investing in revenue cycle management and population health products.
"Revenue cycle performance will come more into focus as the industry transitions out of the meaningful use era," Kyle Armbrester, SVP and chief product officer at athenahealth, told Healthcare Dive recently.
Cerner executives told investors on its recent earnings call the population health and revenue cycle markets offer good growth opportunities. Allscripts CEO Paul Black in November said such products were selling well.
For athena's part, in 2017, "the company made it most of the way through a major flipping of the script from 'it's about the product' to 'it's about the platform,'" Bush said.
For 2018, Bush said the company has three major focus areas.
It plans to open the network to increase the volume of data from non-athenaNet locations and integration of such data onto its platform.
The company is also working to multiply the network's intelligence. Using machine learning and data organization, Bush hopes to bundle up and eliminate what he calls "micro-aggressions of the administrative state" for clinicians.
Finally, athenahealth is adding new functionality — dubbed "micro-services" — to its platform.
An open appointment calendar is now available that acts like Open Table, where customers can search for and schedule appointments.
More tools are on the way. CTO Prakash Khot told Healthcare Dive the company is preparing to release about a dozen features in the coming months, including a directory to connect patients and providers to each other.
In addition, a national master patient index, a data terminology rationalization tool and the ability for developers to connect to the company's processing and data layers are all in the works.
Platforms for practices
The tools are the beginning of work elimination tasks the company is betting on to shift administrative burden away from physicians onto the company or patients themselves.
"The ability to eliminate administrative cost is a valuable arrow to have in your quiver," Bush said on the company's most recent earnings call.
The larger idea is to build a generalizable platform combining identity, patient data and access management — key ingredients to health information management no matter the clinical specialty — that can be re-used for different workflows.
The company also hopes to expand into small hospitals and build workflows for laboratory, pharmacy, imaging and surgery services.
“Each one of those represents not only an ingredient to the hospital market but an opportunity to be a market in-and-of themselves," Bush said.
If and when the services stand on their own, the company can re-use the base platform to add specific workflows necessary in other business segments.
It's a long game with an eye toward providing a platform for which developers can build tools on top of athenaNet for clinicians. It's a strategy to help create a stickiness for athenaNet not just for clinicians using the tools but also for those developing the add-on tools.
A new face for a new year
While 2017 laid the foundation for the company's "platform-as-a-service" vision, the company is looking to scale its current offerings and client base.
Since last May when hedge fund Elliott Management, led by billionaire activist investor Singer, disclosed a 9.2% interest in the company, athenahealth has been shaking up its senior management structure.
The investor in a May SEC filing said the stock was "significantly undervalued and represent an attractive investment opportunity."
In August, the company said it would establish the separate role of president, a title Bush previously held; the search is ongoing.
Last November, Marc Levine was named the company's new CFO.
Immelt joined as chairman of the board in February, the latest in senior management changes. He served as CEO and chairman for GE for 16 years and helped GE Healthcare go from a $3 billion enterprise to $20 billion.
"It’s a huge win for a little company like ours," Bush said. "The board and I wanted a chairman that could handle the complexity of healthcare ... but also understood digitization at a massive scale."
Immelt has previous experience working with activist investors Trian Partners while at GE.
Athenahealth says it has the pieces in place to grow in 2018. The question for the year: Can it deliver?
The company provided its 2018 guidance at its investor summit on Feb. 15.
Athenahealth expects a total revenue range of $1.31 billion to $1.38 billion, an increase over the total $1.2 billion revenue it hit in 2017.