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Athenahealth's Strategic Reset, Push for Speed in Ambulatory Care · Vanguards of Healthcare by Bloomberg Intelligence

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Speaker 1: Welcome to another episode of Bloomberg Intelligence's Vanguards of Healthcare podcast,
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Speaker 1: where we speak with the leaders at the forefront of
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Speaker 1: change in the healthcare industry. I'm Jonathan Palmer, and I'm
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Speaker 1: a healthcare analyst at Bloomberg Intelligence, the in house research
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Speaker 1: arm of Bloomberg. I'm thrilled to welcome Bob Segert, the
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Speaker 1: chairman and CEO of Athena Health, to our program today.
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Speaker 1: Bob has a very distinguished track record of leading major
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Speaker 1: technology and information services companies, but he's perhaps best known
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Speaker 1: for steering Athena Health through its transformative era from a
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Speaker 1: public company, through the Virons Health merger, and more recently
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Speaker 1: into the seventeen billion dollar acquisition by Bain Capital and
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Speaker 1: Helman Friedman. Today, Athena Health is a cloud native titan,
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Speaker 1: supporting over a h and sixty thousand physicians and touching
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Speaker 1: nearly twenty percent of the US patient population. I'm excited
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Speaker 1: to dive into the future of EHRs and the role
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Speaker 1: of generative AI and the clinic. Bob, welcome to the program.
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Speaker 2: Great, Jonathan, Thanks, it is great to be here.
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Speaker 1: Well, why don't we start with what brought you into healthcare?
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Speaker 1: I like to start with people's journey and how they
1:17
Speaker 1: got into the industry. So let's rewind a little bit
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Speaker 1: and get to your start and software and what led
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Speaker 1: you to Athena in the first place.
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Speaker 2: Well, it's a great question. And I have a fairly
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Speaker 2: long career now in private equity backed software and technology companies,
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Speaker 2: and I had been through several iterations of transforming companies,
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Speaker 2: and I was actually at the point in my life
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Speaker 2: where I was trying to figure out, you know, what
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Speaker 2: I wanted to do and where I wanted to go
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Speaker 2: and did I want to run another company or did
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Speaker 2: I want to do more board work and things of
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Speaker 2: that nature. And one of the things that I thought
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Speaker 2: about is I was a valuating opportunities. Is could I
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Speaker 2: get into something that actually made a difference, you know,
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Speaker 2: is there something that can make an impact other than
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Speaker 2: being you know, just you know, maybe an independent athlete
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Speaker 2: or just a merchant going out and just working on
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Speaker 2: interesting problems. That drew me to the opportunity within healthcare.
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Speaker 2: And it was actually Veritas Capital that commitsd me to
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Speaker 2: join the carve out of ge the g eccentricity business
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Speaker 2: that we then named Variance. Then we used to get
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Speaker 2: into Athena Health. So it was really the opportunity to
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Speaker 2: work in something exciting and interesting as well as the
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Speaker 2: mission driven element of healthcare.
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Speaker 1: Well, let's let's go back to that combination with Veritas
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Speaker 1: when you joined. Let's talk about the heavy lifting that
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Speaker 1: you had to do, and maybe let's start with what
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Speaker 1: vins Variance was, and then what Athena was and what
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Speaker 1: the combined entity looks like.
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Speaker 2: Now, Yeah, it's so funny when we named it varance,
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Speaker 2: you know, I said, you know, variance is an easy
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Speaker 2: pronounce and as as well virons and so I've always
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Speaker 2: had this which I say virus assurance. It was one
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Speaker 2: of the shortest lived brands in healthcare, by the way,
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Speaker 2: I think it was only around for like ninety days
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Speaker 2: as we looked at that. But look, so the g
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Speaker 2: Eccentricity Assets was a business that had really been under
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Speaker 2: invested in by General Electric for many, many years. It
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Speaker 2: was almost an or within an orphan of an orphan.
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Speaker 2: I mean, it was this unmanaged, kind of uninvested in
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Speaker 2: set of capabilities that we thought there was an opportunity
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Speaker 2: for us to polish that up and then use that
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Speaker 2: avenue to then roll up EHRs and create additional value.
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Speaker 2: And what ended up happening is about forty five days
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Speaker 2: after I joined, we ended up going after Athena Health
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Speaker 2: and we actually won the auction for that. So I
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Speaker 2: joined in September of eighteen to run Variance and then
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Speaker 2: we actually closed the Athena transaction to take private transaction
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Speaker 2: in February of twenty nineteen. So when we did that transaction,
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Speaker 2: Athena was the much larger business. So we actually ended
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Speaker 2: up folding the GE assets into Athena, creating kind of
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Speaker 2: a combined electronic health record red cycle management company.
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Speaker 1: And so what was the biggest challenge in that combination?
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Speaker 1: Was it just the fact that Variance was underinvested in,
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Speaker 1: was it the cultures? Was it just finding the right
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Speaker 1: product market fit.
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Speaker 2: There are a lot of challenges. Let me list has
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Speaker 2: put it that way. I mean, first of all, at
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Speaker 2: the time, you know, the founder CEO, you know, had
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Speaker 2: left the company. It was being run by Jeff m.
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Speaker 2: Melt was the executive chairman. There was activist investors in
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Speaker 2: so even the core of the Athena business was a
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Speaker 2: little bit challenged. Wasn't performing at the same level that
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Speaker 2: it had been. Culture and just kind of the morale
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Speaker 2: was relatively low. You had a GE business that was
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Speaker 2: a carve out that also felt like a step child,
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Speaker 2: and really bringing those two cultures together was probably the
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Speaker 2: biggest challenge. And when ever you bring two competitors together,
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Speaker 2: there's always the well, we're Ge, we're Athena. We do
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Speaker 2: it this, so we do it, yeah, we do it
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Speaker 2: this way. And we were trying to build out that
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Speaker 2: that GE business as well. So I'd say the one
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Speaker 2: of the biggest challenges for us was just culturally, how
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Speaker 2: do we bring these two businesses together such that you know,
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Speaker 2: the one plus one can equal more than two. The
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Speaker 2: second piece was really strategic decisions we had to make
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Speaker 2: on product so which products were we going to sell,
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Speaker 2: which market segments and when? Because we had products, so
5:01
Speaker 2: the decisions around what are we going to sell, how
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Speaker 2: are we going to rationalize the product portfolio, how do
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Speaker 2: we bring the cultures together, and then how do we
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Speaker 2: get the business just re energized and performing. And the
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Speaker 2: last area was really how do we build a management team?
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Speaker 2: And we had a lot of turnover in the management team.
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Speaker 2: Imagine people that just didn't want to go into the
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Speaker 2: private equity world. So it was a massive transformation.
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Speaker 1: So maybe talk a little bit more in each of
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Speaker 1: those buckets that you talked about, what was the final
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Speaker 1: outcome for some of those, whether it was the product
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Speaker 1: the management.
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Speaker 2: Yeah, so I'll start on the product side. So one
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Speaker 2: of the things that was in our thesis with the
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Speaker 2: variance business in Veritas Capital was that Athena Health had
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Speaker 2: gotten too broad in terms of what it was trying
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Speaker 2: to accomplish, and it had ventured out into the community
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Speaker 2: hospital market and had spent a ton of dollars on
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Speaker 2: this new offering at the expense of its core abiatory
5:52
Speaker 2: care offering. And as we looked at the market trends,
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Speaker 2: and we looked at hospital bed days, and we looked
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Speaker 2: at what was happening in abilatory care versus the acute
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Speaker 2: care that happens in the hospitpital, we saw basically a
6:01
Speaker 2: flat to declining kind of bed day hospital market and
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Speaker 2: an almost ten percent growing ambilatory care market in terms
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Speaker 2: of where services were moving out of the hospital and
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Speaker 2: into inilatory care, whether that's the clinic or ASCs. And
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Speaker 2: we said, look, the business right now is starving the
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Speaker 2: core to try to move into a market that's going
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Speaker 2: to be extremely difficult to be successful and it's not
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Speaker 2: the fastest growing. So one of the first things we
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Speaker 2: did is literally day one, we said, we're no longer
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Speaker 2: selling the hospital product in the market, so we stopped
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Speaker 2: selling it. We still maintained that software for customers. Seven
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Speaker 2: years later, we still have customers that are on that
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Speaker 2: platform and it works quite well, but we stopped investing
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Speaker 2: in that. The other core strategic decision we made is
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Speaker 2: there was a product within GE called Centricity Practice Solutions,
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Speaker 2: which was a direct competitor to the Athena SaaS model,
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Speaker 2: and we evaluated both those products and we said the
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Speaker 2: Athena SaaS model is so much more robust and powerful.
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Speaker 2: We made the immediate decision to also stop selling that
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Speaker 2: in the market. So those are probably two of the
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Speaker 2: biggest product decisions we made going in and it turned
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Speaker 2: out very very well for us.
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Speaker 1: Maybe for our visitors who aren't as familiar with the
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Speaker 1: market and EHRs and who plays where. Can you just
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Speaker 1: break down at a very high level the difference between
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Speaker 1: you the Q care setting and the ambulatory setting and
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Speaker 1: who's really competing in each.
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Speaker 2: Sure, so there's two primary elements of the market. There's
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Speaker 2: the ACTE care setting, which think about the hospital kind
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Speaker 2: of care setting. And then there's the abilatory care, which
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Speaker 2: probably for short is the clinics, so you think about
7:26
Speaker 2: your OBG y M that you go to or your
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Speaker 2: family practitioner that would be in ambilatory care. So those
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Speaker 2: are the two sides of that. The act care market
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Speaker 2: is primarily served by Oracle Cerner served by Epic and
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Speaker 2: met Tech. Those are the primary players the ablatory care market.
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Speaker 2: There are hundreds of EHRs that were driven by the
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Speaker 2: Meaningful Use Act to provide an incentive for physicians and
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Speaker 2: adopted the EHR. So tons of innovation went in, tons
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Speaker 2: of startups happened, And it used to be just had
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Speaker 2: to have a portal and that's how you know you qualified,
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Speaker 2: so it was really easy, but it's gotten a lot
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Speaker 2: more complicated, so that market's starting to consolidate. So if
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Speaker 2: you look at the inblatory care market, we're the leaders
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Speaker 2: in that in that position for independent positions, and then
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Speaker 2: you have other folks like an ECW as well that'll
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Speaker 2: be in that that marketplace. You know, you had all Scripts,
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Speaker 2: which is kind of moved into now verodigm what it's
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Speaker 2: called today, and a plethora of other companies that are
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Speaker 2: in that in that market.
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Speaker 1: And so in terms of growth, you talked about inblatory
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Speaker 1: being higher growth. But can you maybe just size the
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Speaker 1: market for us from a TAN perspective.
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Speaker 2: Yeah, So the overall the overall EHR market is roughly
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Speaker 2: thirty five billion dollars. Okay, so it's it's rather large,
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Speaker 2: it's growing, you know, mid single digits that are a lot
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Speaker 2: of people already have an electronic health record. So our
8:42
Speaker 2: market today is really a take share market as opposed
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Speaker 2: to a denovo kind of growth market. So you have adoption,
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Speaker 2: the you know, consolidation of different providers. So let's say
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Speaker 2: a private equity firm is doing a roll up that
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Speaker 2: can consolidate onto a platform or hospital systems buying, buying,
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Speaker 2: you know, other practices. So you have some consolidation and
9:02
Speaker 2: then you have the switching market. And then you have
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Speaker 2: the upsell that's part of that tam too. So let's
9:06
Speaker 2: say you have just a software piece and let's say
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Speaker 2: you now start to sell rev cycle solutions or you
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Speaker 2: sell a patient engagement application. There's upsell kind of opportunities.
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Speaker 2: That overall market's like a five to six percent grower.
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Speaker 1: And then if we think about those upsell opportunities which
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Speaker 1: are the biggest opportunities for you. I mean we mentioned
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Speaker 1: you mentioned rep cycle and patient engagement, but can you
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Speaker 1: talk about the suite of your offering because it's not
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Speaker 1: just you know, I think many of us traditionally just
9:29
Speaker 1: think of em rs or EHRs. It's just one product,
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Speaker 1: but there's a lot more to it these days with
9:34
Speaker 1: the suites of products that are being offered.
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Speaker 2: Yeah, so Athena and one of the amazing things about
9:39
Speaker 2: it is it's a full on SaaS based platform. We
9:43
Speaker 2: have one version of the code is full CICD, one
9:47
Speaker 2: common data lake that houses all the data with a
9:49
Speaker 2: master patient record. So we have this beautiful architecture. It
9:53
Speaker 2: was built extremely well and I think really the leading
9:55
Speaker 2: application in the market. But when you look at what
9:57
Speaker 2: sits underneath that kind of core technology platform. On top
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Speaker 2: of it, we have patient engagement solutions. So think about
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Speaker 2: this as patient incate take scheduling, patient portals, and access
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Speaker 2: our mobile applications that allow patients to be able to
10:11
Speaker 2: interact with their healthcare provider. You have the core electronic
10:14
Speaker 2: health records, so think about that as just being you know,
10:17
Speaker 2: all the documentation, all the clinical notes, all the work
10:21
Speaker 2: that the physician does when they're actually in the encounter,
10:23
Speaker 2: in the visit with the patient. Then you have the
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Speaker 2: revenue cycle side, so this takes this into into coding,
10:29
Speaker 2: closing the encounter, denials management, getting paid for claims. At Athena,
10:34
Speaker 2: we have the lock box, so we actually collect the
10:36
Speaker 2: financials for our practices and we commit them for them.
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Speaker 2: So you do the payment side as we do the
10:42
Speaker 2: payment side, posting, patient collections, you know, all that type
10:45
Speaker 2: of stuff that is all part of Athena. And then
10:49
Speaker 2: on top of that is then a series of other
10:51
Speaker 2: broader kind of applications and extensions, our interoperability efforts to
10:56
Speaker 2: ensure that data can free flow between our system and
10:58
Speaker 2: other systems. It's our work with payers where we're ingesting
11:02
Speaker 2: care gaps and diagnosis gaps, preferred referral patterns, we call
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Speaker 2: it paidor moment of care. And then all of our
11:09
Speaker 2: AI capabilities that are built on top of this that
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Speaker 2: are really driving the gentic opportunities, ambient voice listening. So
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Speaker 2: it's a very very broad and robust platform.
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Speaker 1: So we'll come back to the robustness and the AI
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Speaker 1: conversation I think in a second, but I think. You know,
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Speaker 1: as somebody who's seen Athena over the years, the cloud
11:26
Speaker 1: native architecture, I think is something that always differentiated it.
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Speaker 1: Can you just maybe talk a little bit about how
11:31
Speaker 1: that has been a competitive advantage for maybe the life
11:35
Speaker 1: of Athena, but you know more so today as you're
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Speaker 1: still competing in some of these legacy providers.
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Speaker 2: Yeah, I mean it's a huge advantage for us. And
11:42
Speaker 2: I'll give you a great example. So one of the
11:45
Speaker 2: major payers, we are having a conversation with them about
11:49
Speaker 2: their challenge with getting the data that they had in
11:52
Speaker 2: their network in the hands of physicians so they could
11:55
Speaker 2: properly take care of their patients in a value based
11:57
Speaker 2: care arrangement. So incentives are between the pair and the
12:01
Speaker 2: practice and they have important information that they need to get.
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Speaker 2: So we were talking to them and said, you know,
12:05
Speaker 2: you have eight million of your insured that are on
12:08
Speaker 2: our platform and oh, by the way, we know that
12:11
Speaker 2: because it's all one platform and we can actually build
12:15
Speaker 2: custom workflow that will allow you to present a care
12:19
Speaker 2: gap or a diagnosis gap into the workflow of Athena.
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Speaker 2: And they're like, Wow, that's really exciting. How long is
12:26
Speaker 2: that going to take? I go well, it depends on
12:28
Speaker 2: you know, the functionality, but we can probably write this
12:30
Speaker 2: thing in three to four weeks and then we can
12:31
Speaker 2: deploy it. And they said, but how long is it
12:34
Speaker 2: going to take? Like you're going to deploy it, but
12:36
Speaker 2: then you got to go to this system and this
12:38
Speaker 2: I go, no, no, no, you don't understand. When we deploy
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Speaker 2: it and turn it on, it goes to every single
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Speaker 2: one of our practices. So all eight million of your insured,
12:48
Speaker 2: the physicians who serve them will have access to that
12:51
Speaker 2: data interesting in their workflow. And they were blown away.
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Speaker 2: And that's the power of the platform as opposed to
12:56
Speaker 2: know a bespoke, custom built, custom configured, single instance type
13:01
Speaker 2: platform that might sit at you know, Detroit Mercy or
13:04
Speaker 2: might sit the mail clinic. This is an integrated, single
13:07
Speaker 2: source platform. So everything that we do, every time we
13:09
Speaker 2: update the software, every time we make a security patch,
13:12
Speaker 2: every time we add any feature functionality, it is automatically
13:17
Speaker 2: in the software and our customers don't have the option
13:21
Speaker 2: to not take the upgrade. It happens. It all rolls
13:23
Speaker 2: in so one version of the code, and the leverage
13:25
Speaker 2: we get from that is so powerful because we don't
13:28
Speaker 2: have to go retrofit. We don't have to go makeshift
13:31
Speaker 2: things as they change for different systems. It's all in
13:34
Speaker 2: the code and that's a massive advantage for us.
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Speaker 1: Well, I wanted to come back to the AI discussion.
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Speaker 1: You know, that's probably where I spend all my time
13:41
Speaker 1: these days, and so I think it's a really central
13:44
Speaker 1: part to your story. But you know, can we think
13:46
Speaker 1: about how do we think about you know, all the
13:47
Speaker 1: different areas where AI is touching the workflow? And I
13:51
Speaker 1: guess from your perspective, you know what's real and what's
13:54
Speaker 1: maybe a little bit hype for lack of a better term.
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Speaker 2: Yeah, Look, AI is going to have a profound and
14:00
Speaker 2: actually is having a pretty profound impact on healthcare today.
14:05
Speaker 2: And I think the first thing is to realize, like,
14:07
Speaker 2: AI didn't start with l MS, you know, in inference.
14:10
Speaker 2: I mean, we had machine learning techniques you know, all
14:13
Speaker 2: the way back through screen scraping, you know, work that
14:15
Speaker 2: was done.
14:17
Speaker 1: Here in the four Walls of Bloomberg exactly.
14:19
Speaker 2: So you know, we AI is not new dust. We've
14:22
Speaker 2: been we've been doing deterministic AI for you know, decade
14:25
Speaker 2: plus and there's some areas where that works just well,
14:28
Speaker 2: where you actually need a deterministic outcome when you get
14:32
Speaker 2: into the new kind of world of AI. When people
14:34
Speaker 2: think about AI, they're talking mostly about inference models and
14:36
Speaker 2: ll ms, and that's great for processing text, finding trends
14:40
Speaker 2: in data, and then summarizing that in a unique and
14:44
Speaker 2: usable way. And I think that technology today is really
14:48
Speaker 2: transforming primarily the physician patient experience. So one of the
14:52
Speaker 2: great things that's happening is ambient voice. So the ability
14:57
Speaker 2: for a physician to actually have a conversation with the patient,
15:00
Speaker 2: look at that patient like I'm looking at you now,
15:02
Speaker 2: as opposed to down to my computer screen trying to
15:04
Speaker 2: type stuff in and have ambient listening, be able to
15:07
Speaker 2: actually capture that and then convert that into a note
15:11
Speaker 2: for the physician that can be then summarized, and then
15:13
Speaker 2: the physician can go in and they can modify it.
15:15
Speaker 2: You know, they need to read it, they need to
15:17
Speaker 2: sign off on it, they can modify it. But that's
15:19
Speaker 2: just the start, and I think there's a ton of
15:21
Speaker 2: opportunity there. We're seeing a ton of delight. There's a
15:24
Speaker 2: lot of customers out there, a lot of providers out
15:26
Speaker 2: there that are providing these types of solutions. We just
15:29
Speaker 2: announced that we were going to embed our own ambient
15:31
Speaker 2: solution and it's going to be free as part of
15:33
Speaker 2: our core platform. So that was a little bit of
15:35
Speaker 2: a shockwave across the industry, these businesses that have been
15:38
Speaker 2: investing in this and now it kind of becomes free
15:41
Speaker 2: with Athena. But that's the starting point, and then that's
15:44
Speaker 2: going to move into clinical decision support. It's going to
15:46
Speaker 2: move into medical coding suggestions, it's going to move into
15:50
Speaker 2: prior authorization. And that's just on the clinician side. On
15:54
Speaker 2: the rev cycle side, you have all this data. We
15:56
Speaker 2: have a facts problem in healthcare. We take perfectly good
16:00
Speaker 2: digital information, we turn it into a paper. We then
16:03
Speaker 2: send that paper to somebody so they can then create
16:05
Speaker 2: it turn it into digital information. And a lot of
16:07
Speaker 2: that's done with data entry. So there's lots of people
16:09
Speaker 2: in healthcare that are literally taking fact documents and they're
16:12
Speaker 2: re entering that data. That's also a great opportunity for
16:16
Speaker 2: AI and llms to be able to process that data,
16:19
Speaker 2: to categorize that and then get that we instituted back
16:23
Speaker 2: into the EHR. So I could go on and on,
16:25
Speaker 2: but there's there's just a there's a ton of ways
16:27
Speaker 2: to drive efficiency and effectiveness, but I think the most
16:30
Speaker 2: important thing is really the patient physician experience.
16:33
Speaker 1: Interesting, So when we think about what you're doing in
16:36
Speaker 1: this area, how much of it is partnering with some
16:39
Speaker 1: of these providers that you might have referred to before.
16:41
Speaker 1: You know, you're not doing the ambient piece with somebody else,
16:43
Speaker 1: but you're building it yourself versus the Denovo investment. Can
16:47
Speaker 1: you talk a little bit about, you know, what you
16:49
Speaker 1: have to do to stand that up and if you
16:51
Speaker 1: could frame it in any way around dollars or people
16:53
Speaker 1: or engineers. I don't know what the right measure is,
16:55
Speaker 1: but that would be helpful.
16:56
Speaker 2: One of the things that you know, I've believed in
16:59
Speaker 2: for a long time being in the software world is
17:01
Speaker 2: the extensibility of platforms. And I believe that ecosystems compete
17:05
Speaker 2: with ecosystems, you know, the Apple ecosystem, the Google ecosystem,
17:09
Speaker 2: the Athena Health ecosystem. So we're very open network, we're
17:14
Speaker 2: open APIs. We have over eight hundred read write APIs.
17:17
Speaker 2: We use those APIs ourselves to exercise our own software,
17:21
Speaker 2: so they're thoroughly tested and embedded into the data flows
17:25
Speaker 2: within Athena. And because of that, we've extended that into
17:28
Speaker 2: our partner marketplace. So we have over six hundred partners
17:32
Speaker 2: that are on the Athena marketplace, and we build pre
17:35
Speaker 2: built integrations that allow those partners and our practices to
17:38
Speaker 2: be able to sign up for them on the Athena marketplace,
17:41
Speaker 2: and the integration is already built back up. Again, SaaS
17:44
Speaker 2: based platform, we don't have to build integration into each
17:48
Speaker 2: hospital system. We build the integration once. Once that's done,
17:52
Speaker 2: it lights up our entire network. So anyone in any
17:55
Speaker 2: of our practices could pick let's say, any of our vendors,
17:57
Speaker 2: an ambient vendor, a data analytics vent or it does
18:00
Speaker 2: it doesn't matter patient engagement, ven any of those could
18:04
Speaker 2: be picked up through our marketplace. So in terms of
18:06
Speaker 2: like how long does that take, it depends on what
18:08
Speaker 2: we're trying to do on that integration flow, but it
18:10
Speaker 2: could take two weeks, it could take four weeks, and
18:12
Speaker 2: once it's done, it's one to many, it's rent and
18:15
Speaker 2: repeat and we can continue to add people onto that
18:17
Speaker 2: network without any additional R and D effort.
18:20
Speaker 1: Interesting, so, but in terms of building your own products,
18:23
Speaker 1: can you talk about the one of the themes that
18:26
Speaker 1: comes up in these discussions, is just the challenges of
18:29
Speaker 1: actually getting the right people with the right skill sets
18:32
Speaker 1: to build these products. I mean, is there a war
18:33
Speaker 1: for talent that you're seeing for these engineers?
18:36
Speaker 2: And look, there's always been a war for talent, you know,
18:39
Speaker 2: for the best. I mean, we're we're a knowledge business
18:43
Speaker 2: and health, you know, we're we don't make automobiles or furniture,
18:47
Speaker 2: physical goods. You know, we're a knowledge business. So our world,
18:50
Speaker 2: and really the world I've come up in has always
18:52
Speaker 2: been a knowledge world. So you're always looking for the
18:55
Speaker 2: best people. I think today, you know, with AI, I
18:58
Speaker 2: think that premium on having the right AI talent is
19:01
Speaker 2: even more important and critical, and being able to get
19:04
Speaker 2: the right people that are hyperscalers right, that can really
19:07
Speaker 2: use you know, the kind of the ten x twenty
19:09
Speaker 2: x users of AI and technology. So we're always in
19:13
Speaker 2: the market for those types of people, you know. At
19:15
Speaker 2: the same time, there's also work that can be done
19:17
Speaker 2: that doesn't need that ten x or that twenty x
19:19
Speaker 2: you know, individual, So the warfare talent is real. I
19:23
Speaker 2: think the way you address that is by how having
19:25
Speaker 2: a compelling value proposition, building a great company with a
19:27
Speaker 2: great culture that allows people to bring their best selves
19:30
Speaker 2: to work and to really flourish, and that's really the
19:32
Speaker 2: way we compete for talent.
19:34
Speaker 1: Maybe just going back to the marketplace and the APIs,
19:37
Speaker 1: how do you balance maybe the challenges of you know,
19:40
Speaker 1: having this open marketplace versus maybe wanting to own some
19:43
Speaker 1: of these workflows. Ultimately, yeah, we believe in choice for
19:46
Speaker 1: our practices.
19:48
Speaker 2: If we can do it better and you want to
19:50
Speaker 2: buy the Athena version of it because it's embedded within
19:52
Speaker 2: our solution, we'd love for you to do that. But
19:54
Speaker 2: if you want to do something different, we're totally okay.
19:56
Speaker 2: It's back to this ecosystem philosophy. I just don't believe
20:00
Speaker 2: closed ecosystems. I don't think they work. I don't think
20:02
Speaker 2: they serve the end customer or the end consumer. Right.
20:06
Speaker 2: You want to provide choice, and Athena we're open by
20:10
Speaker 2: choice to try to be able to drive a better
20:12
Speaker 2: outcome for the clinicians that are using our software. And
20:15
Speaker 2: if they like our scheduling but they want to specialize
20:17
Speaker 2: scheduling and they want to use another tool, you can
20:19
Speaker 2: do that and we make it easy for them to
20:21
Speaker 2: do that. And that's different than some folks out in
20:23
Speaker 2: the market case.
20:24
Speaker 1: Well, is the right way to think about them that
20:25
Speaker 1: to summarize, maybe what you're saying there is that the
20:28
Speaker 1: way competitors are thinking about ambulatory you know this close
20:32
Speaker 1: that this is the idea of a closed system is
20:34
Speaker 1: ultimately you know, not going to work for them in
20:36
Speaker 1: the long term.
20:37
Speaker 2: I don't believe so, you know, I don't believe it works.
20:40
Speaker 2: I believe that providing choice is the right way to
20:42
Speaker 2: move and allowing people to customize and to be able
20:46
Speaker 2: to extend your applications and the unique ways that they
20:50
Speaker 2: need so that they can drive competitive differentiation for their practice.
20:54
Speaker 2: I think that's the real value and we and we
20:55
Speaker 2: see it. We see it when people evaluate Athena Health
20:59
Speaker 2: and they look at our own in APIs and look
21:00
Speaker 2: at our marketplace partners and they say, wow, you mean
21:03
Speaker 2: we could literally use you kind of platform as a
21:05
Speaker 2: service and we can build our entire own patient engagement
21:09
Speaker 2: set of capabilities on top of this if we wanted to. Yeah, now,
21:13
Speaker 2: I don't recommend that you do that because that's a
21:16
Speaker 2: lot of work that you're going to have to maintain,
21:17
Speaker 2: and our stuff is really really good, but yeah, you
21:20
Speaker 2: could do that. And I think it just provides this
21:22
Speaker 2: flexibility that let's company say, wow, we really can use
21:26
Speaker 2: this platform to scale and frankly the future proof them
21:30
Speaker 2: for the world of AI.
21:32
Speaker 1: Well said, if you think about how customers look at
21:34
Speaker 1: you guys today and how they're evaluating let's say Athena
21:38
Speaker 1: versus maybe their their legacy system or one of your competitors,
21:42
Speaker 1: what is the tip of the spear. I guess that's
21:44
Speaker 1: maybe weeding to the tipping point and going with Athena
21:47
Speaker 1: versus somebody else.
21:49
Speaker 2: A couple things. One, our software is easy to use,
21:52
Speaker 2: it's highly intuitive, and doctors like it. Now like is
21:57
Speaker 2: an aggressive term in the world of EHRs, and it's
21:59
Speaker 2: probably physicians that will listen to this podcast and chuckle,
22:03
Speaker 2: but you know, it is easy, it is intuitive, and
22:06
Speaker 2: it is adaptable, and I think that is a key thing.
22:08
Speaker 2: The second is we provide the revenue cycle management services
22:13
Speaker 2: on the back end to take out a lot of
22:15
Speaker 2: the administrative work that these practices just don't want to
22:18
Speaker 2: have to deal with. And the way we price our
22:20
Speaker 2: services on what's called a percentage of collections, and that
22:24
Speaker 2: aligns our incentives to the incentives of the practice, so
22:26
Speaker 2: as opposed to we just get paid a fixed monthly fee.
22:29
Speaker 2: It doesn't really matter if our software works well or
22:32
Speaker 2: if you get good revenue cycle outcomes, you know, doesn't
22:35
Speaker 2: it doesn't impact us. But the way we build it
22:37
Speaker 2: impacts us. So when we collect more for the practices
22:40
Speaker 2: that we serve, we make a cut of that and
22:42
Speaker 2: we make a higher percentage. So it really aligns our
22:45
Speaker 2: culture and all of our incentives to drive a delighted
22:48
Speaker 2: customer experience and to drive better revenue cycle outcomes. I
22:51
Speaker 2: think those those two things are important. And the third,
22:53
Speaker 2: I would say is the fact that we are so
22:56
Speaker 2: open and interoperable, and that is the key. With the
22:59
Speaker 2: first EHR to implement tech get scale, every one of
23:02
Speaker 2: our eligible providers is now on TEFKA, the Trust Exchange
23:06
Speaker 2: and Common Framework. I mean, that is done and we
23:09
Speaker 2: were the first ones to be able to do that.
23:11
Speaker 2: And I think that interoperability platform that we have is
23:14
Speaker 2: probably the third kind of key differentiator.
23:16
Speaker 1: Well, interoperability has been one of these things that I've
23:18
Speaker 1: been talking about with guests for years, and you know,
23:21
Speaker 1: I think we're further along than we were five ten
23:23
Speaker 1: years ago. But from your perspective, you know, is there
23:26
Speaker 1: still a lot of work to be done in interoperability.
23:28
Speaker 1: And you know, where do you think we ultimately get
23:30
Speaker 1: to I don't know in the next five ten years.
23:32
Speaker 2: Well, I hope we get the free flow data. And
23:34
Speaker 2: you know, one thing I have to commend the current
23:37
Speaker 2: administration on is there a push to really drive a
23:39
Speaker 2: broader level of interoperability and the idea that patients own
23:42
Speaker 2: their data. And I do believe the patient owns their data.
23:45
Speaker 2: Practices don't own their data. We sure don't think we
23:47
Speaker 2: own their data to them. Of health, patients need to own
23:50
Speaker 2: their data. The fact that a patient can have test
23:53
Speaker 2: results that they cannot easily transmit from one hospital system
23:56
Speaker 2: or one clinic to another because of interoperability barriers is
24:00
Speaker 2: just wrong and it leads to waste in the healthcare
24:04
Speaker 2: system because it leads to more testing and more work
24:07
Speaker 2: that has to be done or delayed care because you
24:09
Speaker 2: don't have the information that's needed. So the efforts that
24:12
Speaker 2: are going on with TEFKA, for example, the interoperability to
24:15
Speaker 2: kill the clipboard, you know, initiative that's going on. I
24:17
Speaker 2: was at the White House several months back, you know,
24:19
Speaker 2: as part of the original signers of that whole kind
24:21
Speaker 2: of initiative that's been led by the administration. Those are
24:26
Speaker 2: the type of things that we have to do, and unfortunately,
24:29
Speaker 2: there are barriers out there in the healthcare system that
24:32
Speaker 2: try to prevent that. And it's some of these closed
24:34
Speaker 2: ecosystems that exist that aren't necessarily as open, that aren't
24:38
Speaker 2: necessarily as interoperability, that somehow feel like that data is
24:42
Speaker 2: their data, and somehow if they allow someone else to
24:45
Speaker 2: have access to that, there's some HIPPA risk, or there's
24:47
Speaker 2: some security risk, or it's just not it's just not true.
24:51
Speaker 2: Those are those are those are veiled excuses for not
24:55
Speaker 2: driving the level of interoperability that frankly, our practices and
24:59
Speaker 2: our patient deserve.
25:01
Speaker 1: I hear that hippa reason all the time, and it's
25:04
Speaker 1: always a head scratcher if you actually think about the
25:07
Speaker 1: context that it's being used. And you know, you mentioned
25:09
Speaker 1: the administration and being in Washington, how important is what's
25:13
Speaker 1: going on there right now? And maybe to characterize it
25:16
Speaker 1: as a fluid situation with this administration, what are you
25:20
Speaker 1: looking for out of Washington and what are you really
25:23
Speaker 1: paying attention to in terms of new legislation that's coming
25:26
Speaker 1: down the Pike, What are you advocating for?
25:29
Speaker 2: Yeah, probably two things that we're most advocating for. One
25:34
Speaker 2: I talked about, which is this interoperability and ensure that
25:36
Speaker 2: we actually drive what I call like experiential interoperability. So
25:41
Speaker 2: there's one to say, we're in compliance and I get,
25:45
Speaker 2: you know, I want information, let's say on a patient,
25:47
Speaker 2: and I get one hundred ccdas to come over as
25:50
Speaker 2: opposed to just the information on allergies, which is all
25:52
Speaker 2: I really wanted. That's that's one piece and we're advocating
25:55
Speaker 2: for that very very strongly in Washington. The second piece, though,
25:58
Speaker 2: is really important, which is the reimbursement that independent physicians
26:03
Speaker 2: receive per urvu or basically the work unit within healthcare.
26:07
Speaker 2: What is there reimbursement level that allows physicians to actually
26:10
Speaker 2: make a wage that provides the incentive for them to
26:14
Speaker 2: go to med school and to invest the way they
26:16
Speaker 2: have to invest to become a physician. And unfortunately that
26:19
Speaker 2: has gotten very out of whack within the US healthcare
26:22
Speaker 2: system over the last ten years. Over the last ten years,
26:26
Speaker 2: real reimbursement rates have declined by thirty percent for that
26:29
Speaker 2: independent physician that's out there in the marketplace. While costs
26:32
Speaker 2: have gone up, inflation is going up, burnout is sitting there.
26:36
Speaker 2: This last year, the administration put a raise in finally
26:38
Speaker 2: through CMS, and that was welcome relief. But we need
26:42
Speaker 2: that to be permanently indexed to inflation, like it happens
26:44
Speaker 2: in other sectors, like it happens within the hospitals. We
26:47
Speaker 2: have to have that physician fee schedule index to inflation
26:50
Speaker 2: such that the physicians that are lifeblood of the US
26:53
Speaker 2: healthcare system, particularly in the underserved rural communities, aren't being
26:57
Speaker 2: pushed out of the medical profession. We can't afford that.
27:00
Speaker 1: And so do you see that just coming through another
27:03
Speaker 1: CMS rule. You know, how is that ultimately going to
27:05
Speaker 1: come to culmination?
27:07
Speaker 2: Well, you know, it's it's all part of the budgeting process,
27:09
Speaker 2: and that's complicated. That's where it gets That's where it
27:12
Speaker 2: gets tricky. And how do you how do you pay
27:14
Speaker 2: for all these things that are important? But I just
27:16
Speaker 2: think it's critical for the national security United States, the
27:20
Speaker 2: economic prosperity of our nation. Have the healthiest population as possible.
27:24
Speaker 2: And the way you do that is by making sure
27:26
Speaker 2: that you've got the right physicians with the right ability
27:29
Speaker 2: to provide care for for our nation. I think that's
27:32
Speaker 2: the most important thing. So we just got to figure
27:34
Speaker 2: out a way to get that funded.
27:35
Speaker 1: Got it. You know, if we think about Athena as
27:37
Speaker 1: kind of a derivative on those physician reimbursements, right, that's
27:40
Speaker 1: how you guys make money from charging your clients. Can
27:43
Speaker 1: you talk to me a little bit more, And we
27:45
Speaker 1: touched upon this with the risk taking around revenue cycle,
27:48
Speaker 1: but can you just talk about the revenue model at Athena.
27:51
Speaker 2: So the Athena revenue revenue models is pretty fairly simple.
27:55
Speaker 2: We'll go in and we'll sell our suitest services. We
27:57
Speaker 2: call it Athena one, right, that's our patient and page,
28:00
Speaker 2: our electronic health record or ref cycle solutions, and we'll
28:02
Speaker 2: sell it at a fixed percentage of collections basis. So
28:07
Speaker 2: it's not all RIF cycle. You know, it's EHR and
28:09
Speaker 2: it's the patient apps, and it's all the other stuff.
28:11
Speaker 2: But we sell that as a package, and we believe
28:14
Speaker 2: that the alignment incentive is important, so that's why we
28:16
Speaker 2: do percentage of collections. We will do per encounter or
28:19
Speaker 2: per visit pricing, and that happens particularly here in the
28:23
Speaker 2: state of New York. Were're at today they don't actually
28:25
Speaker 2: allow percentage of collections by law, so we have to
28:27
Speaker 2: do per visit or per encounter based pricing. So we
28:30
Speaker 2: will do that, and then on top of that, there'll
28:32
Speaker 2: be other things where there could be add ons, whether
28:34
Speaker 2: it's data analytics capabilities, whether it's different feature functions, medical coding. Well,
28:40
Speaker 2: we'll do that where that could be either on a
28:42
Speaker 2: per unit basis or on a percentage of collections basis.
28:45
Speaker 2: So it's a little bit of a model where we're
28:50
Speaker 2: flexible to meet the needs of the customer, but it
28:53
Speaker 2: tends to gear towards percentage of collections. Got it.
28:56
Speaker 1: And then for somebody who's switching from a legacy into
29:01
Speaker 1: Athena and Athena one, you know, what's the rule of
29:04
Speaker 1: thumb in terms of the ROI that they get from
29:06
Speaker 1: from that that switch or how do you kind of
29:09
Speaker 1: how do you from a financial perspective pitch the idea.
29:12
Speaker 2: Yeah, so's there's a couple of things and it's not
29:14
Speaker 2: always about ROI. So we we sell a lot of
29:17
Speaker 2: customers where the ROI is zero relative to their current
29:21
Speaker 2: platform on paper, but where they're getting more delighted physicians,
29:26
Speaker 2: they're getting as the data you know and and those
29:29
Speaker 2: are hard sometimes to put an ROI on. It's not
29:31
Speaker 2: always about cost. Now, our big advantage is attractive pricing
29:37
Speaker 2: and cost for better REP cycle performance. And typically you know,
29:41
Speaker 2: we'll see five to seven to ten percent improvement in
29:44
Speaker 2: the REP cycle performance. Now that can vary, it can
29:46
Speaker 2: be a lot bigger than that, depending on how sophisticated
29:48
Speaker 2: the customers, it could be smaller than that. But it's
29:51
Speaker 2: really about the physician experience. It's about access to data
29:55
Speaker 2: for patients. It's about taking the administrative burden and the
29:58
Speaker 2: hassle of the REB cycle out, moving their financial take
30:02
Speaker 2: rate right and what they actually end up being able
30:04
Speaker 2: to pay their physicians. And it's the extensibility of the platform.
30:07
Speaker 2: Those are really the things that we that we compete
30:09
Speaker 2: on and typically win on.
30:11
Speaker 1: And then if I'm a hospital administrator or not a
30:14
Speaker 1: hospital administrator but a provider, you know, what are the
30:18
Speaker 1: KPIs that I'm looking at day to day on ATHENA
30:20
Speaker 1: one that that really helped me manage my practice and
30:23
Speaker 1: the most efficiently.
30:24
Speaker 2: Yeah, so a few things you know, as a physician
30:26
Speaker 2: practice one, you want to look at your schedule yield
30:28
Speaker 2: and you want to see how many patients you're seeing
30:30
Speaker 2: every day, and we have tools and capabilities that allow
30:34
Speaker 2: practices to be able to fill their schedule campaigns that
30:37
Speaker 2: go out you know, wellness campaigns or you know flu
30:39
Speaker 2: campaigns that try to bring you know, volume into the practice.
30:42
Speaker 2: So it's that that scheduled dynamic. The second thing is
30:45
Speaker 2: then am I getting paid every dollar that I should
30:48
Speaker 2: get paid? So it's their payment yield on their allowables
30:52
Speaker 2: for the payers, whether that's the government or commercial insurer,
30:55
Speaker 2: So that allowables percentage, and then it's our daar what
30:58
Speaker 2: are basically accounts receivable are that sit within the system.
31:01
Speaker 2: So how fast am i am I getting those dollars in?
31:04
Speaker 2: So if you're filling the schedules, if you're getting paid
31:07
Speaker 2: every dollar that you should get paid based upon the
31:10
Speaker 2: allowables in your contract, and you're getting the money as
31:13
Speaker 2: fast as possible. Those are really three of the key
31:16
Speaker 2: KPIs that are important to these practices. There's there's others,
31:19
Speaker 2: but those are those are.
31:20
Speaker 1: The high level ones. Maybe flipping the question around for
31:23
Speaker 1: you managing the business, what are you looking at in
31:25
Speaker 1: terms of how you think about what your KPIs are
31:28
Speaker 1: month to month or quarter to quarter or year to year.
31:31
Speaker 2: Yeah, from look from our from our business, we're we're
31:33
Speaker 2: trying to do with a few things. Well, one, we're
31:35
Speaker 2: trying to retain our existing customers, so we look at
31:37
Speaker 2: our growth revenue retention results. We're also looking at net
31:41
Speaker 2: revenue retention for upsell for some of our packaged offerings
31:43
Speaker 2: where there's additional services on top of Athena. We're looking
31:47
Speaker 2: at our core new logo bookings for growth. So those
31:50
Speaker 2: are kind of three key things that we look at.
31:52
Speaker 2: And then of course we're trying to look at our
31:53
Speaker 2: efficiency and are we driving productivity, are we driving automation
31:56
Speaker 2: across our workflows so so we can maintain you know,
32:00
Speaker 2: our operating margins. And then we have a whole entire
32:03
Speaker 2: customer success organization that is focused on the outcomes for
32:07
Speaker 2: our customers. So we spend a lot of time looking
32:09
Speaker 2: at what is happening with our aggregate network DAR, what's
32:12
Speaker 2: happening with the top death style performers, the lower bensile performers,
32:16
Speaker 2: what are the key things that they are not using
32:18
Speaker 2: the software? Because once again SaaS software, we see every
32:21
Speaker 2: click within the EHR, so we can actually go in
32:24
Speaker 2: to practices and say, hey, you're not using these macros.
32:27
Speaker 2: You're not using these accelerats or other tools within Athena
32:30
Speaker 2: that we've seen other orthopedic practices use that they've improved
32:34
Speaker 2: their DAR but ten percent. But you're not using those.
32:36
Speaker 2: So let's educate you on how to use some of
32:38
Speaker 2: these tools, how to use some of these capabilities so
32:41
Speaker 2: that you can get improved performers. So we really focus
32:43
Speaker 2: on those customer outcomes as well when we do our
32:46
Speaker 2: operating reviews.
32:47
Speaker 1: And so one of the things you mentioned was in
32:49
Speaker 1: you know, driving operating margin. You know, where's the beverage
32:52
Speaker 1: in the business.
32:54
Speaker 2: Yeah, So, look, it comes from a lot of different places.
32:57
Speaker 2: Number one, I think great businesses grow revenue and improved margins.
33:00
Speaker 2: I mean, that's what great businesses do. Good businesses do
33:02
Speaker 2: one of the one of the one of one of them,
33:05
Speaker 2: you know, but great businesses do both of them. So
33:08
Speaker 2: I think every great business needs to do both of those.
33:11
Speaker 2: And by driving margin improvement, you can then reinvest those
33:14
Speaker 2: dollars back into new products and new capabilities that hopefully
33:17
Speaker 2: create a virtuous cycle right, success with your customers. Right.
33:21
Speaker 2: So it's a it's a really good place to be
33:22
Speaker 2: in because when you start decreasing margins or start decreasing
33:25
Speaker 2: overall dollar profitability, you start to then cut costs and
33:29
Speaker 2: you start to maybe compromise on R and D. So
33:32
Speaker 2: we're really focused on ensuring that we can drive you know,
33:35
Speaker 2: that overall revenue growth and we can drive drive that
33:38
Speaker 2: margin growth.
33:39
Speaker 1: Well, thinking about the capital investment, you know, where where
33:42
Speaker 1: what are the big buckets that you're investing in today
33:44
Speaker 1: and what do you see I don't know, five years,
33:47
Speaker 1: ten years down the road from a product roadmap or
33:49
Speaker 1: or organizational roadmap that that you know you're investing in now.
33:52
Speaker 2: Yeah, two key things for us really. So one is
33:55
Speaker 2: and our biggest investment is around R and D. It's
33:58
Speaker 2: around software development. You can imagine with the software platform core,
34:01
Speaker 2: we are at software development. Some of that gets capitalized
34:05
Speaker 2: in the way we look at our software development stat
34:07
Speaker 2: but that's the most important thing. And we're going to
34:09
Speaker 2: spend this year over three hundred and fifty million dollars
34:12
Speaker 2: in cash R and D on new product development and
34:16
Speaker 2: most of that, just over fifty percent of that is
34:19
Speaker 2: actually new capabilities. It's not maintenance. And in my world
34:22
Speaker 2: of you know, software, it used to be kind of
34:23
Speaker 2: the eighty twenty world role right, twenty percent net new,
34:26
Speaker 2: eighty percent of maintenance. We're over fifty percent on net new,
34:29
Speaker 2: So a lot of dollars are going into net new capabilities.
34:32
Speaker 2: The other thing that we're investing dollars in is the
34:34
Speaker 2: infrastructure to run our system. So whether that is you know,
34:38
Speaker 2: our co Loo centers, whether that's our you know, public
34:41
Speaker 2: cloud vendors through Amazon, our inference models and things of
34:44
Speaker 2: that nature. You know, we are investing in the data
34:46
Speaker 2: platform and technology to enable you know, a secure, seamless,
34:51
Speaker 2: highly performant know environment as we're as we're hosting these
34:54
Speaker 2: solutions for our for our practices and customers.
34:56
Speaker 1: That's great. Maybe switching gears a little bit. You know,
34:59
Speaker 1: you've you've had a long track credit or in the industry.
35:01
Speaker 1: Can you talk about your leadership style a little bit
35:03
Speaker 1: and how it's maybe changed over the last decade or so.
35:07
Speaker 1: I mean, you've been a CEO at a number of companies,
35:09
Speaker 1: a number of private equity backed companies. I'd love to
35:12
Speaker 1: get a sense of, you know, where you started at
35:15
Speaker 1: as a CEO and where you are today and how
35:17
Speaker 1: that's been me transformed.
35:19
Speaker 2: Well, Look, it's been a journey, it's been almost twenty
35:21
Speaker 2: years now coming up, and this is my fifth CEO job,
35:25
Speaker 2: so I've seen a lot of different.
35:26
Speaker 1: Congratulations, thank you very much.
35:28
Speaker 2: All of them successful so far, and we're going to
35:30
Speaker 2: continue to make this one successful. You know. I think
35:34
Speaker 2: just from a leadership style standpoint, I think there's a
35:37
Speaker 2: few key things. One is you've got to get the
35:40
Speaker 2: right people on the bus. People are critically important, and
35:45
Speaker 2: what I learned through my early days is getting the
35:48
Speaker 2: right people early is such a critical success factor. So
35:52
Speaker 2: that's one important thing. The second thing is alignment around strategy.
35:57
Speaker 2: Everyone needs to understand where we're going as a business,
36:00
Speaker 2: and they need to understand how that then translates back
36:03
Speaker 2: into what they do on a day to day basis.
36:05
Speaker 2: So really focusing on strategic alignment. So my leadership teams
36:09
Speaker 2: we spend a lot of time together and staff meetings
36:12
Speaker 2: and reviews and looking at metrics, looking at data, and
36:15
Speaker 2: part of that is to build trust and to build
36:17
Speaker 2: relationships that allow for alignment, so so that the teams
36:21
Speaker 2: are talking the same thing. When they go out and
36:23
Speaker 2: they talk to our employees and our colleagues and our customers,
36:26
Speaker 2: they're saying the same thing. So that's critically important. And
36:28
Speaker 2: then the third piece is really around execution and follow through.
36:32
Speaker 2: And you can have a brilliant strategy, but you have
36:34
Speaker 2: to execute it. And I say only action. Change is
36:36
Speaker 2: a business. You have to do something. You can't dream
36:39
Speaker 2: about it, hope for it. You've got to go do something.
36:42
Speaker 2: And that feedback loop from strategy through the operating plans,
36:46
Speaker 2: through the execution to the feedback loop is critically important.
36:49
Speaker 2: So that's kind of philosophical. And then from an overall
36:52
Speaker 2: style standpoint, I try to be as approachable as possible.
36:56
Speaker 2: I try to ensure that we get the right dialogue
36:58
Speaker 2: amongst staff, that we drive consensus wherever we can. And frankly,
37:03
Speaker 2: you know, people talk about consensus a lot, but which
37:05
Speaker 2: you really need is coalition. Okay, you know, you need
37:08
Speaker 2: people that are really bought into what you're doing. And
37:10
Speaker 2: I spend a lot of time, you know, with our people,
37:13
Speaker 2: out with our employees, with our leadership team, ensuring that
37:17
Speaker 2: we can try to drive to coalition, not just consensus
37:20
Speaker 2: across the leadership team. And that comes from being approachable,
37:23
Speaker 2: and I think that's so important. The higher you get
37:26
Speaker 2: in an organization, the less approachable you are, the more
37:28
Speaker 2: intimidating than you are. And I just try to be
37:30
Speaker 2: a real human being to folks and you know, laugh
37:33
Speaker 2: and have fun. I like to tease a little bit
37:35
Speaker 2: as well, but I also like to take it back.
37:38
Speaker 2: So you just try to keep that really kind of
37:40
Speaker 2: human element to it.
37:41
Speaker 1: Well, maybe apply that that lens or that framework to
37:45
Speaker 1: you know, the work you've done at Athena. I mean,
37:47
Speaker 1: is there a couple of test cases that you could say,
37:50
Speaker 1: you know, we we dove real deep on the strategy
37:53
Speaker 1: and then here's how we execute it on it. You know,
37:55
Speaker 1: I'm always curious to hear, you know, where the rubber
37:58
Speaker 1: hits the roads in some of these discussions.
38:00
Speaker 2: Yeah, I mean at A great example is recently with
38:04
Speaker 2: you know, our pivot aggressively into our native AI capabilities.
38:10
Speaker 2: So you know, a year ago, we were using partners
38:12
Speaker 2: for a lot of this, We were using deterministic GI,
38:15
Speaker 2: we were using l MS, but we hadn't gone all
38:17
Speaker 2: in on our own kind of ambient solution, our own
38:21
Speaker 2: clinical decision to support our own you know, AI enabled coding.
38:25
Speaker 2: And it was really a realization of us at staff
38:27
Speaker 2: talking about kind of where the market's going, what was
38:29
Speaker 2: happening with l MS and we sat there and we
38:31
Speaker 2: had this entire development plan and we go, you know what,
38:35
Speaker 2: now is the time to strike. We've got we've got
38:38
Speaker 2: to pivot. So we literally went to the board and
38:41
Speaker 2: I said the board, we're going to all these things
38:43
Speaker 2: we said we're going to do.
38:45
Speaker 1: We're not there on the scrap heape now doing those
38:47
Speaker 1: right now.
38:48
Speaker 2: Some of those are going to happen, but we're pivoting
38:50
Speaker 2: this way. And oh, by the way, we're going to
38:51
Speaker 2: spend another twenty five million dollars of bubble investment this year.
38:55
Speaker 2: We're going to go hi. And by the way, I've
38:57
Speaker 2: already started hiring people. So just say yes because because
39:01
Speaker 2: because we're doing it. And we made that pivot, and
39:04
Speaker 2: and that was a conscious decision by the executive leadership team.
39:08
Speaker 2: That wasn't you know, our head of product coming up
39:10
Speaker 2: with some brilliant idea or me coming up with some
39:11
Speaker 2: brilliant idea. It was really us in concert looking at
39:14
Speaker 2: the market, looking at the capabilities, understand what customer needs were,
39:18
Speaker 2: and then making a huge pivot that allowed us to
39:21
Speaker 2: announce that in October last year at our Thrive conference
39:24
Speaker 2: to you know, much much positive, uh, you know, applause,
39:28
Speaker 2: you know, from our from our our customers out there,
39:30
Speaker 2: So that's a that's a great example of us really
39:32
Speaker 2: kind of pivoting and taking action and working as a
39:36
Speaker 2: team to drive a differentiated outcome.
39:38
Speaker 1: Maybe going back to the board for a brief second.
39:42
Speaker 1: You know, when I when I think about the different
39:44
Speaker 1: structures of companies, whether it's venture backed, public, private, PE backed,
39:48
Speaker 1: do you see the PE backed structure as as giving
39:52
Speaker 1: you some sort of advantages to how you can act
39:55
Speaker 1: and when you can act and how quickly you can act.
39:58
Speaker 2: Absolutely, I'm a big advocate of private equity and the
40:01
Speaker 2: alignment of incentives. You know, agency costs is real, and
40:06
Speaker 2: when incentives get aligned and when there's a clear path
40:09
Speaker 2: for communication, I think it really drives speed and decision
40:12
Speaker 2: making and clarity of purpose. And it's a reason why
40:15
Speaker 2: private equity back ventures tend to drive you know, three
40:18
Speaker 2: hundred to four hundred basis points of incremental return over
40:22
Speaker 2: the public markets. So I haven't seen the data lately,
40:24
Speaker 2: and those things fluctuate, you know, year to year and
40:26
Speaker 2: quarter to quarter, but over time there tends to be
40:29
Speaker 2: a three to four percentage point spread on returns for
40:32
Speaker 2: private equity back and it allows just ease of communication.
40:37
Speaker 2: So I have two key leaders, one from Helmet and
40:39
Speaker 2: Freemen and one from Bank Capital that I will go
40:42
Speaker 2: to and we can make decisions on the fly. I
40:44
Speaker 2: don't have to schedule a full board meeting and wait,
40:47
Speaker 2: you know, six weeks to be able to get it down.
40:50
Speaker 1: Everybody read the deck.
40:51
Speaker 2: I just get on the phone and we just make decisions.
40:54
Speaker 2: And that drives just the ability to just innovate and
40:59
Speaker 2: to rapidly pivot. And you know Veritas, my previous partner
41:04
Speaker 2: at Athena, you know, they had a saying that said,
41:07
Speaker 2: you know, good news travels fast, and bad news needs
41:09
Speaker 2: to travel even faster. And I so believe in that,
41:14
Speaker 2: and that's a good one that alignment. And I always
41:17
Speaker 2: start my monthly reviews with with my private equity sponsors
41:22
Speaker 2: of these are all the things that are going bad,
41:25
Speaker 2: and then these are all the things that are going good.
41:27
Speaker 2: Because there's a lot of things that are going good,
41:28
Speaker 2: but these are all the things I'm worried about. And
41:30
Speaker 2: this that ruthless transparency and that spirit of partnership that
41:34
Speaker 2: you can get with the right private equity firms like
41:36
Speaker 2: a Helmet and Freeman, like a bane capital really allows
41:39
Speaker 2: the CEO to just be freed up to execute and
41:44
Speaker 2: to drive differentiated performance. I think it's a huge, huge
41:48
Speaker 2: value creator.
41:49
Speaker 1: Well, we've talked about the laudrys, the things that are
41:51
Speaker 1: going well, maybe at a very high level, just because
41:53
Speaker 1: you brought it up, where are you looking at that?
41:56
Speaker 1: You know, maybe things aren't going as well or what
41:58
Speaker 1: are you concerned about in the ecosystem going forward?
42:01
Speaker 2: We're never moving fast enough, you know, speed and agility.
42:04
Speaker 2: We're never nimble enough. You know, how do you pivot?
42:06
Speaker 2: How do you know what technology to build? When? Who
42:10
Speaker 2: do you partner with? How do you structure that partnership
42:13
Speaker 2: such that it can endure or such that it can change?
42:16
Speaker 2: You know? For example, you know, one of the things
42:18
Speaker 2: that we did early on is as we were looking
42:20
Speaker 2: at LMS, we said, we don't know who the ll
42:23
Speaker 2: M winners are going to be. Is it going to
42:25
Speaker 2: be Open AI, Is it going to be Anthropic? Is
42:29
Speaker 2: it going to be Google? Is it going to be
42:32
Speaker 2: something we don't even know about today. Oh, by the way,
42:36
Speaker 2: the providers. Is it going to be like Suki and ambient?
42:38
Speaker 2: Is it going to be a bridge and ambient? Is
42:39
Speaker 2: it going to be a nuanced like who's it going
42:41
Speaker 2: to be? And one of the things that we did
42:43
Speaker 2: is we said we're going to make it agnostic. So
42:46
Speaker 2: we're going to build the system in a way that
42:47
Speaker 2: we can plug and play any ll M into our solution,
42:52
Speaker 2: any partner into our solution. And that strategic design choice
42:57
Speaker 2: allows us to be nimble. If we would have been
42:59
Speaker 2: better it made a bet on a single platform or
43:02
Speaker 2: a single way of doing things, we wouldn't be able
43:04
Speaker 2: to use the latest and greatest and newest technology. And
43:06
Speaker 2: I believe that the llms are going to advance in
43:08
Speaker 2: a way that some may be better for orthopedics, others
43:11
Speaker 2: may be better for cardiology, others may be better for
43:13
Speaker 2: family practice. We want to be able to provide that
43:15
Speaker 2: choice and that ability to swap those models in and out.
43:18
Speaker 2: And that's a great example of how you know, we've
43:20
Speaker 2: built that flexibility, that nimbleness into our system.
43:23
Speaker 1: So what is the world going to look like? You know,
43:24
Speaker 1: from an inblatory practice perspective five years from now, if
43:28
Speaker 1: everything comes to fruition, you know, and I know predicting
43:31
Speaker 1: five years is probably impossible. We could even say, how
43:34
Speaker 1: is how is the practice going to look different in
43:36
Speaker 1: two to three years.
43:38
Speaker 2: While I wish I could predict the next five weeks,
43:40
Speaker 2: little's the next five years. But things are changing so fast.
43:43
Speaker 2: Here's what I do think though. I do believe that
43:46
Speaker 2: inblatory care is going to continue to grow. More and
43:48
Speaker 2: more procedures are going to move outside of the hospital,
43:52
Speaker 2: you know, and the restrictive procedure list has basically been
43:56
Speaker 2: lifted in a lot of ways by the administration, so
43:58
Speaker 2: more and more work can be done in invatory surgery centers,
44:00
Speaker 2: which is part of the broader invatory care kind of network.
44:03
Speaker 2: So I think you're going to continue to see you know,
44:05
Speaker 2: that growth. It's going to be driven by you know,
44:08
Speaker 2: consumerism as well, so consumers wanting to have access to
44:11
Speaker 2: their data, wanting to have you know, the information around wearables,
44:15
Speaker 2: sitting you know, within their overall health record and cojustin
44:17
Speaker 2: and that you're going to see a lot more consumerization
44:19
Speaker 2: in the next five years. You know, healthcare is way
44:22
Speaker 2: behind on the consumerization side. When you know more about
44:25
Speaker 2: your uber driver than you do about your doctor, that's
44:27
Speaker 2: probably a problem. Okay, So consumerization is going to be
44:30
Speaker 2: a key trend as we move forward. And then I
44:33
Speaker 2: think you're going to see the world get more and
44:34
Speaker 2: more interoperabile, driven by the push of the administration, which
44:38
Speaker 2: I think is helpful and hopefully that hopefully that continues
44:40
Speaker 2: so there's better free FLOWID data. And then you're going
44:43
Speaker 2: to see AI continue to get embedded into workflows, whether
44:46
Speaker 2: that's clinical workflows so the doctor to the patient as
44:48
Speaker 2: I was talking about earlier, and then increasingly in the
44:51
Speaker 2: red cycle on the back end, to take a lot
44:53
Speaker 2: of that administrative kind of just junk that doesn't need
44:56
Speaker 2: to exist out of the system. I think when those
44:58
Speaker 2: things come together, you're going to to get a consolidation
45:01
Speaker 2: more than likely of electronic health records. Many many of
45:04
Speaker 2: these smaller companies won't be able to hang and won't
45:07
Speaker 2: be able to keep up with the pace of change
45:09
Speaker 2: and the drive of AI. Going forward, You're going to
45:11
Speaker 2: see new innovators out there, but I think you're going
45:13
Speaker 2: to see a very very strong ambiatory care market served
45:17
Speaker 2: by several hopefully Athena one being the leading inblatory care provider,
45:21
Speaker 2: providing great services out in that marketplace. So I'm very
45:24
Speaker 2: optimistic about where health tech goes in next five years.
45:27
Speaker 1: Well, you mentioned consolidation and from where I sit, you know,
45:30
Speaker 1: we see a lot of consolidation around providers, particularly with
45:33
Speaker 1: especially MSOs. Is that an opportunity for.
45:35
Speaker 2: You huge So we're almost one of the preferred electronic
45:39
Speaker 2: health record companies for MSOs because of the extensibility of
45:44
Speaker 2: our platform, because of the fact that it's a single
45:47
Speaker 2: instance of the code, so they expand from state to state,
45:50
Speaker 2: they can put it onto the platform, they have access
45:52
Speaker 2: to all that information. The scale of Athena Health all
45:55
Speaker 2: fifty states, one hundred and twenty specialties, sub specialties, one
45:58
Speaker 2: hundred and seventy thousand now provide e or strong across
46:00
Speaker 2: our network. That allows these aggregators, these MSOs to be
46:05
Speaker 2: able to scale their business. And remember what I said
46:07
Speaker 2: about our open APIs it also allows them to easily
46:11
Speaker 2: integrate their secret sauce on top of our platform one
46:15
Speaker 2: and done, one time, integrated to every single one of
46:19
Speaker 2: the members in our MSO, and that is hugely powerful.
46:22
Speaker 1: Interesting. So we're coming towards the end of our time.
46:25
Speaker 1: You know, if I think about Athena in the future,
46:28
Speaker 1: you know what what still has to be done? You know,
46:31
Speaker 1: what are the key building blocks that you still need
46:33
Speaker 1: to work on for the company.
46:35
Speaker 2: So you know, growth is critically important for us. So
46:38
Speaker 2: you know, we need to continue to expand our networking
46:41
Speaker 2: capabilities and that includes extending the core, THEENO and offering
46:45
Speaker 2: into broader you know, red cycle capabilities. It also means,
46:49
Speaker 2: you know, taking our offering and allowing it to be
46:51
Speaker 2: more accessible you know, lower down in the stack or
46:54
Speaker 2: for people that want lighter weight our CM capabilities, so
46:56
Speaker 2: we're looking at broader kind of product portfolio. All of
47:00
Speaker 2: that need to drive We've got to complete the AI
47:02
Speaker 2: journey and it'll never be completed, but we've got to
47:05
Speaker 2: get AI native Athena wand fully launched across our patient
47:09
Speaker 2: engagement applications, our clinical applications and red cycle and we're
47:14
Speaker 2: well on our way to be able to do that.
47:16
Speaker 2: And I think the third thing is we've just got
47:18
Speaker 2: to continue to drive a culture of customer delight and
47:22
Speaker 2: improve the quality of our revenue cycle performance. We have
47:26
Speaker 2: to have just a relentless passion and focus on driving
47:31
Speaker 2: the best outcomes for our clients, and we can always
47:34
Speaker 2: do better. We do a great job today. I'm very
47:36
Speaker 2: proud of our team and the work that we do,
47:38
Speaker 2: but we constantly have to push ourselves to get better.
47:41
Speaker 2: And I think if we can do those three things,
47:43
Speaker 2: this company is going to thrive and really be successful
47:46
Speaker 2: for the upcoming several years.
47:48
Speaker 1: I'm looking forward to watching. One of the ways I
47:50
Speaker 1: like to end these conversations is to ask the guest
47:52
Speaker 1: about a life lesson from either our person or a
47:55
Speaker 1: professional life that drives them. Is there something that you
47:57
Speaker 1: see as your mission that you've learned from one of
48:01
Speaker 1: these life lessons?
48:02
Speaker 2: Yeah. Look, I think one of my ethos is that
48:06
Speaker 2: I like to create teams that can deliver more than
48:11
Speaker 2: they ever thought was possible, you know. And one of
48:14
Speaker 2: the ways that you do that is by communications and
48:18
Speaker 2: relationships with those teams. And one of the things that
48:21
Speaker 2: I didn't do so well on my first CEO job,
48:23
Speaker 2: I think I was referred to at a point the
48:25
Speaker 2: human cyborg is having that EQ side and that relationship side.
48:30
Speaker 2: And that's probably the biggest lesson that I've learned is
48:33
Speaker 2: you have to build relationships. You have to build community,
48:36
Speaker 2: you have to build trust, and if you can do that,
48:39
Speaker 2: you can enable teams to flourish in a way that
48:42
Speaker 2: they did not think was possible. And there's nothing that
48:44
Speaker 2: brings me more delight than watching our leadership team succeed.
48:50
Speaker 1: Has there been a mentor along the way that helped
48:53
Speaker 1: instill that lesson you know, I wouldn't say handle.
48:56
Speaker 2: I don't know if there's been like a one mentor.
48:59
Speaker 2: I would say probably the biggest mentor in my life
49:01
Speaker 2: was my father. Growing up, he was working at a
49:05
Speaker 2: gas station that he ended up ultimately owning a small
49:08
Speaker 2: little Amaco station if anyone knows what Amaco is. Back
49:12
Speaker 2: in the day, I had a small town of Crownpoint, Indiana,
49:15
Speaker 2: and I started working with him at the age of thirteen,
49:19
Speaker 2: and that's when I learned a couple of things. One
49:20
Speaker 2: that no job is beneath you, and I watched my
49:23
Speaker 2: dad work seven days a week relentlessly, And that you
49:27
Speaker 2: have to give back to the community. My dad was
49:29
Speaker 2: involved in almost every civic organization in the town, and
49:32
Speaker 2: that giving back is critically important. And then the critical
49:36
Speaker 2: nature of customer service and having respect for the customer
49:38
Speaker 2: and a passion for customer excellence. And those three things
49:41
Speaker 2: stuck with me. Hard work, passion for the customer, and
49:45
Speaker 2: giving back to the community. I think those life lessons
49:47
Speaker 2: I learned as a young adolescent and Crownpoint, Indiana still
49:51
Speaker 2: served me well today.
49:52
Speaker 1: Well, I really appreciate you sharing that story about your dad.
49:55
Speaker 1: That's very powerful and I think we can all relate
49:58
Speaker 1: to some of those lessons from our from our parents.
50:02
Speaker 1: I think we'll put a bow on it here. Thank
50:03
Speaker 1: you so much for joining.
50:04
Speaker 2: Us, Bob, my pleasure is great seeing you.
50:06
Speaker 1: That's Bob Segert, Chairman and CEO of TENA Health. Thank
50:09
Speaker 1: you so much for joining us for our latest episode,
50:11
Speaker 1: and to our listeners, please don't forget to give us
50:13
Speaker 1: a review and make sure you click the follow button
50:15
Speaker 1: on your favorite podcast app or site so you never
50:17
Speaker 1: missed a discussion with the leaders in healthcare innovation. I'm
50:20
Speaker 1: Jonathan Palmer, and you've been listening to the vanguards of
50:22
Speaker 1: healthcare podcasts by Bloomberg Intelligence. Until next time, take care,