Athenahealth , which announced last month its entry into small hospitals with the acquisition of start-up Razor Insights, has made another purchase that propels it into a larger inpatient environment. In an unusual transaction, the company which sells cloud-based billing and electronic health record services to more than 40,000 office-based physicians, bought the electronic health record of Boston’s Beth Israel Deaconess Medical Center, one of the country’s leading academic medical centers. Jonathan Bush, athenahealth’s chief executive declined to disclose the purchase price, except to say that it’s small. “We want to be able to do all delivery of care,” he says.
Beth Israel stands out as a contrarian in an academic hospital landscape dominated by Epic Systems, whose server-based software runs in the hundreds of millions of dollars. Under the guidance of its forward-looking chief information officer, John Halamka, Beth Israel is the only hospital in the U.S. to adopt a home-grown, web-based electronic health record. It is used by 1,800 health care providers. Halamka can boast an IT budget that makes up 1.9% of the hospital’s operating budget, as opposed to 3.5% to 4.5% for the industry. With two separate data centers, Halamka says the hospital experiences less than one hour downtime a year for non-critical tasks. “We’ve spent 30 years getting IT consumer-friendly, and now we’re using a commercial company to spread those ideas,” he says.
A 58-bed Beth Israel hospital in Needham, Mass. will serve as a test site for integrating athenahealth’s electronic health record with Beth Israel’s. (The hospital currently uses Meditech). Bush expects to have a working prototype by the end of the year, but doesn’t have a timeline as to when he’ll start selling to larger hospitals.
It’s a tough market. Hospitals have already spent millions installing electronic health records, and are not about to dump them any time soon. Athenahealth intends to hone in on its strengths, such as care coordination from hospital to doctor to home, and pick up new ones, such as tracking dosing for chemotherapy. “We have to skirmish,” says Bush.
