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Athenahealth Is Now Taking Over Big Hospitals

January 21, 2016, 9:09 PM UTC
Courtesy of Athenahealth

Athenahealth struck a new deal with University of Toledo Medical Center (UTMC) to bring its cloud-based medical records system into a major hospital for the first time, expanding its reach beyond the doctor office. The move is a significant step towards implementing health care systems that go beyond the silo-ed medical records of past years to new systems that can share information across care settings, from a primary care physician to a hospital to a pharmacy—and beyond.

UTMC will implement AthenaClinicals, the company’s platform specifically focused on hospitals and health systems, across its organization, replacing its current traditional electronic medical records system. It’s the first time Athenahealth is moving into a large hospital. Up until now AthenaClinicals was being used in hospitals with 50 beds or fewer. For comparison, UTMC has about 250 beds. For UTMC CEO David Morlock, it was a decision that simply made better business sense.

“The old approach is flawed in some ways. It has really high capital costs to get started, then also really high ongoing costs to maintain,” said Morlock. “It needed to make more business and analytic sense than that. The opportunity with Athenahealth is that the incentives are aligned.”

Rather than pay a large upfront sum for a software package like those offered by traditional electronic health record providers like Epic, Cerner (CERN), and McKesson (MCK), UTMC and Athenahealth established a deal whereby the two will share the cash flow generated over time, said Morlock. Also, Athenahealth was a known entity for UTMC. The medical center has worked with Athenahealth for over a year within its doctors’ offices (i.e. non-hospital units), so it was familiar with the service. UTMC is able to easily connect its doctors’ office records with the hospital, seamlessly sharing patient information across sites.

One of the biggest challenges in health care today is what’s referred to as interoperability, meaning the ability for software systems to seamlessly share information between different providers. Up until now, electronic medical record systems have been sold as complete software packages where companies pay a large sum of money for a program that’s designed and installed specifically for a provider. Those systems are self contained within each medical center and don’t allow other systems to plug in to seamlessly share data.

That creates a roadblock when a patient is transferring between medical centers. The information that may have been collected at his or her doctor’s office isn’t in her hospital file—and vice versa. Each facility needs to collect the information from scratch, meaning that unintentional gaps can occur. This can happen again when a patient moves from the hospital to a separate rehabilitation facility when they once again enter a whole separate medical records system.

“The current conversation between providers is clumsy. It’s like eighth grade dating,” said Jonathan Bush, CEO of Athenahealth. “We wanted to create a hospital platform that more sophistically talks between providers, from acute care to laboratories to final billing.”

AthenaHealth (ATHN) is trying to link up systems via the cloud, either by spreading their own platforms or by providing APIs that allow outside providers to link into their databases. The ultimate goal is to create a new information technology system within health care that connects hundreds of thousands of patients to their own records, who can then share that data across providers. It’s also a system that can be implemented at a fraction of the cost of traditional electronic medical records.

“Think about what’s happened to ATMs over the previous decades,” said Bush.

ATMs went from being only within each bank to then small networks that worked for multiple banks, which you’d find by checking the icons on the back of your debit card. Today, ATMs are fully interoperable. You can go to almost any ATM worldwide and know that it’s going to seamlessly connect to your bank to get the cash you need—or even just check your balance.

“That’s the kind of change we are working toward,” said Bush.

To be sure, it’s a huge undertaking, one that many established and emerging electronic medical record players are also slowly working towards. It’s going to be years in the making, requiring companies big and small to take part in the transformation. At the end of last year, the Office of National Coordinator for health Information Technology released its new Interoperability Standards Advisory for the year, which sets the annual goals for connecting health care infrastructure. The ONC calls the commitment to connecting the industry a “critical element” for driving better patient care. The goal is to ultimately make sure “electronic health information is unlocked and securely accessible.”