Watertown, Mass.-based athenahealth, a provider of cloud-based EMRs, announced recently it would acquire San Mateo, Calif.-based Epocrates, a mobile health company known for its point-of-care medical apps. athenahealth will pay about $293 million in cash. It's a match hailed by the executives of both companies, and also by industry analysts, as a smart move for athenahealth.
"We believe this will help in accelerating physician adds at a reasonable cost and also provide new opportunities in monetizing their physician network," Piper Jaffrey analysts Sean Wieland and Mohan Naidu wrote in a brief after the announcement.
That's the idea, says athenahealth CEO Jonathan Bush, who says growing the company fast enough to keep up with the needs of the market is top of mind for him - that and his vision for a health information 'backbone' keeps him and his colleagues excited about their work, he says.
Q. Elaborate about your vision for athenahealth being the "backbone" for healthcare information.
A. We need a national health information backbone, and what I said is I want to be a health information backbone. I am open to the idea that that we'd have many, just as we have Visa and Mastercard and, you name it. We need one. We don't have any right now. We've got a bunch of closed, kind of information hoarding soviets that are not good. So that needs to be blown up in a new model. What I mean by that, what I think the form it will take is that there will be a market for health information exchange. Those who are good at exchanging health information will make money by doing the trading for caregivers that sign up for them. So we've gotten the government to say it's OK for the receiver of health information to pay the sender of health information for the information that they send. We've got an infrastructure that now they can clip in pretty easily to a doctor without being on any of our core services. We've obviously got a bunch of core services that do a wonderful job of curating and managing health information. Now, as a result of this acquisition, we've got 50 percent of the doctors in the United States on our application. So we're getting there. We're actually starting to get there.
Q. What about the hospital market? Is there room for growth in that area for athenahealth?
A. Yes, absolutely. You can't very well say you're going to be the backbone for health information as long as nobody goes to the hospital. So, of course, we've got to be moving in that direction as well. We already have a service called athenaCoordinator, and that service includes all the registration and pre-certification associated with hospital admission. So, we've crept up to the hospital door, and we're just inside it today on athenaNet, and the goal over the years will be to connect into the rest of the hospitals. For example, we'll be piloting making athenaClinicals the medical record of record for an inpatient facility during the year. We're also working in the development area with companies that partner with us to do medical billing for hospitals in partnership with athena. We have to move out to doctors across all of their settings because they're the ones who generate orders, we need to move down into all the different places that patients end up as a result of all those doctors orders.
Q. How do you compete with the Epics and the Cerners, or do you even try to?