By Clifton Leaf
June 6, 2018

Jonathan Bush stepped down today as president and CEO of Athenahealth, the cloud-based healthcare data company he founded in 1997, amid pressure from an outside investor, Elliott Management, to take the company private or explore a sale. Elliott, the activist hedge fund run by Paul Singer, has offered $160 a share for the company, or just under $6.5 billion. My colleague Sy Mukherjee has the story here.

In recent weeks, the 49-year-old Bush, who also gave up his seat on the board today, had been accused by some of inappropriate behavior in the workplace. And in late May, he acknowledged that years ago he had violently assaulted his former wife—disturbing episodes that were detailed in a 2006 custody battle and recently revealed by the UK’s Daily Mail. (Bush said in a statement that he takes “complete responsibility for all these regrettable incidents involving [his] former wife” and that he has “worked very hard since then to demonstrate [his] remorse.” His ex-wife added in a separate statement, reported by Bloomberg, that the incidents are “part of his and our family history; however, it should not define Jonathan as a person, or our relationship overall.”)

The reports of spousal abuse are jarring and upsetting. But today’s announcement seems to have been driven less by issues of character and past actions than by current management.

Bush, who had taken his company from thought experiment to troposphere, couldn’t seem to keep it there—let alone launch it into a sustainable business orbit.

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From its first opening day trade as a public company in September 2007 to its high mark on March 4, 2014, Athenahealth’s stock rocketed up more than a thousand percent, compared with 76% for the Nasdaq. But the ride down from that summit has been rocky and rough: The company has lost a billion-and-a-half dollars in market cap over the past four years. And the stock is still pricey by many measures, trading at 60 times its earnings over the past 12 months. Even using the high range of income guidance the company issued this morning—$152 million in GAAP operating profit for the fiscal year ending in December—the P/E multiple would top 40. (The Nasdaq 100, for comparison, trades at around half that on a forward basis.)

With its days of lightning-fast growth seemingly behind it, there is a real question about whether Athenahealth’s stock, at least at the current value, is anywhere close to worth it.

Athenahealth offers a complex suite of IT services to hospitals and doctors—everything from billing, collection, and practice management software to electronic health records. Its secret sauce has always been twofold: first, the company puts everything “in the cloud,” meaning that every adjustment in software can be done instantly. And second, it had a larger-than-life, true-believing, vision-spewing, room-dominating, media-friendly evangelist for a CEO.

Bush, the nephew of one president by the same last name and the cousin of another, had seemingly spent more time (at least in public arenas) talking about the coming healthcare revolution than explaining his own business model. I’ve had more than a couple conversations with people over the years who tell me that they’re “impressed” with Athenahealth, but don’t seem to understand what the company does, or how it might do it better than its rivals—and there are many such rivals at that.

Explaining one’s business model and competitive advantage is kind of an essential role for a corporate chief: It’s CEO 101.

In a press statement, Bush conceded that his own personal qualities of management—and perhaps of leadership—had helped drive his departure: “It’s easy for me to see that the very things that made me useful to the Company and cause in these past twenty-one years, are now exactly the things that are in the way,” he said.

He’s right. But then, the first part of that sentence is worth amplifying, too. As famously wild and frenetic as Jonathan Bush was during the go-go years of his company—a tale beautifully told, I might add, by Fortune’s own Jen Wieczner in the January 2015 issue of the magazine (see “Is Jonathan Bush in a Bubble” in the Fortune.com archive)—he was also pioneering and provocative about how damn broken the healthcare system was…and still is.

While Bush quickly built a business doing the back-office “scutwork” of the healthcare system, as he called it, he developed a keener sense than most about how much inefficiency in that system there is. When he drilled deep into the healthcare “market,” he concluded that it wasn’t a market at all. Witness this paragraph from Bush’s bestselling 2014 book, Where Does It Hurt? An Entrepreneur’s Guide to Fixing Health Care:

“Now if the growing hospitals were like other behemoths in the market economy—Walmart, say, or Amazon—we might be wringing our hands over the pitiless power of markets. The big ones, which are more efficient, gobble up the small fry, or bury them. We lose the human contact of the local store. But in most case, there is an upside: We usually gain lower prices and a bigger selection—more choice. In the medical example, which is decidedly not a real market, that upside vanishes. As big ones take over the small, prices shoot up. Choices vanish. It’s as if water flowed uphill. It’s the victory of the inefficient. And hospitals, which touch only 5 percent of the population in any given year, have managed to exert their influence over the other 95 percent.”

In 1997, when Bush brought Athenahealth—his “dear Goddess”—to life, few entrepreneurs were willing to take on this colossal, Byzantine healthcare realm—or were clever enough to study its strange, meandering alleyways and find more direct paths from one point in the system to another. Bush was.

None of this excuses his acknowledged violent behavior with his former wife, of course—nor should it. Indeed, I find myself queasy about highlighting Bush’s contribution to the healthcare industry in light of what has emerged about his past domestic abuse. As for his alleged inappropriate behavior with some coworkers, the company would not “disclose details of individual claims, but can affirm that the company’s decision to settle a claim does not necessarily speak to its credibility or merit”—and adds that the company strives “to provide an inclusive, welcoming workplace where respect, trust and collaboration play an essential role.”

If there is hope for the boat that Bush built, it is that at least a few steady hands now seem to be at the helm. Two of those hands belong to board member Dr. Amy Abernethy, a former Duke research oncologist who has been extremely impressive in her role at Roche’s Flatiron Health, where she serves as both chief medical officer and chief scientific officer. Abernethy has agreed to help guide Athenahealth’s new leadership team on data strategy.

The company says it’s already busy looking for a new CEO. If it turns out to be someone like Amy Abernethy—or maybe Abernethy herself—I’d be inclined to believe that this early healthcare revolutionary might one day achieve the disruption its founder envisioned.

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