The foyer of Athenahealth’s Watertown, Massachusetts, headquarters features an unusually constructed staircase designed with intermittently elongated steps.
It’s a purposeful design quirk conjured up by former CEO and founder Jonathan Bush, who wanted it to serve as a reminder to his employees to be attentive to details and think about where you’re walking, according to Aaron Miri, chief information officer of Dell Medical School at The University of Texas at Austin. Miri recently visited the company’s office during a customer summit in November, just before the company announced it would be sold to private equity firms Veritas Capital and Elliott Management for $5.7 billion.
The staircase is still there, presumably, but a lot has changed. The EHR vendor has new ownership that will take the company private. Bush is gone, having resigned over the summer as the company was resisting pressure from Elliott to engage in takeover discussions.
But the former CEO that was the outspoken face of the company hasn’t exactly left the building.
“Jonathan’s DNA is all throughout that organization, even without him being there, as a reminder you have to be attentive and think differently,” Miri told FierceHealthcare.
Athenahealth customers are wondering if those subtle reminders will get lost in the noise of a company undergoing a significant transition. For the last year, Athenahealth has been cutting its expenses to the bone in an attempt to shave as much as $115 million from its budget. And for the last year, the company has faced increasing pressure from one of its top investors, Elliott, to consider a sale. That intensified in May when the venture firm made a public offer of $165 a share, or close to $7 billion.
As part of that acquisition, Athenahealth will merge with Virence Health, a relatively unknown value-based care solution Veritas purchased from GE Healthcare earlier this year. In a letter to customers, Executive Chairman Jeff Immelt said the two companies have “complementary portfolios and highly talented people,” adding that Athenahealth was “operating business as usual.”
But some clients say events over the last 12 to 18 months have negatively influenced the company’s ability to meet support demands. According to one executive at a hospital that has used Athenahealth since early 2017, the turnaround time for support requests can be six to eight months long. In one instance, the company told the hospital it could accommodate dental records. Six months later, it fell apart.
The executive added that the company’s billing and tech support is “all just horrid.”
“If you have more than just a simple question, they have to ‘get you in touch’ with the appropriate team, which indicates too much is occurring in non-patient-facing areas,” the person said. “We depend more on each other in the community for answers than we do them.”
Miri, who got face time with a dozen of the company’s senior leaders and board members at the customer summit in November, says executives appeared committed to ensuring that existing customers were satisfied, even as the company negotiated a sale. But he also acknowledged that some requests had a longer turnaround than usual. In one case, he was told one of his top requests—to create a Spanish-language option in the patient portal—wasn’t in the company’s plans to fix anytime soon.
Though Athenahealth's user interface is generally good, there are still issues that frustrate physicians, Miri added.
“You could tell their focus was clearly on customer service and customer focus,” he said of the executive meeting. “But it doesn’t mean a hill of beans unless it translates to getting something done.”
Uncertainty moving forward
The private equity takeover has sent nervous ripples through Athenahealth's customer base, said Erik Bermudez, vice president of clinical and continuum of care at KLAS Research, who added that across the industry, acquisitions have generally led to more negative impacts for customers than positive.
A recent survey of 155 healthcare executives conducted by Reaction Data found that 51% of respondents are taking a “wait and see” approach regarding the merger with Virence. A quarter said they are likely to leave the vendor, and 57% of noncustomers said they are not likely to consider switching to Athenahealth’s EHR.
One reason for that may be the challenge and expense of switching EHRs in general. Many hospitals and physician practices have already directed cash to EHR installs or upgrades and aren’t likely to switch anytime soon. Those with tight budgets, like federally qualified health centers or smaller clinics, simply don’t have the capital to make such a switch.
Bermudez says many customers were attracted to Athenahealth’s sometimes self-generated hype, disruptive persona and focus on population health, which has generated a loyal base.
“Has the shine come off the apple a little bit?” he said. “The past two years have been pretty turbulent.”
At the same time, the company could benefit from going private. With some obvious exceptions, health IT companies that have remained private are often better off without the burden of quarterly reports or shareholder pressure, says Kenneth Kleinberg, an independent health IT consultant and principal of Healthe-Motion.
But, he says, there’s little doubt that Veritas is acutely attuned to the real business and financial pressures EHR vendors face, which could trickle down to the company’s operations. And there are still plenty of questions about how the company will integrate with Virence, what Veritas’ long-term plans, and whether that includes selling the company again in a few years.
“All in all, I would think Athenahealth clients are probably happy the uncertainly is over, but they have a new set of uncertainties to deal with,” he said.
Some say what made Athenahealth different is what attracted them in the first place. And they don’t want to see that change under new ownership.
“No one—myself included—wants Athenahealth to become like everyone else,” Miri said. “Then there’s no differentiator. Just pony up and go buy Epic.”