Collective Intelligence: The Network is Nirvana

28 Jan Collective Intelligence: The Network is Nirvana

Collective Intelligence (kə-lĕk’tĭv ĭn-tĕl’ə-jəns) n.

1. Collective intelligence is a form of intelligence that emerges from the collaboration and competition of many individuals.
2. Collective intelligence appears in a wide variety of forms of consensus decision making in bacteria, animals, humans, and computers.
3. The study of collective intelligence may properly be considered a subfield of sociology, of business, of computer science.

The basis of this blog is a grossly misinformed comment I read on the January 24, 2008 HIStalk update:

From Cady Heron: “Re: Misys. Misys will have a big roll-out of an SaaS solution. athenahealth may start feeling some heat if Misys can overcome its current dismal perception in the market. As my contact stated, athenahealth is nothing more than a service operation for handling billing with a software front-end.

In my new ventures with Lemhi, I have been focused on health care delivery and finance reform models. As previously mentioned, I am focused on creating a next generation health plan model that looks at all aspects of health insurance, reimbursement, incentives, and consumer experience/outcomes. A significant part of our effort has to do with the way that care is reimbursed, as that is the single largest cost item on the expense side of a health plans finances (loss ratio in insurance parlance). This leads down a very winding road, fraught with train wreckages of the recent past, of how to create, maintain, and optimize high performance care delivery networks.

One of the single biggest challenges is how to ensure that we get value from the delivery network (physicians, hospitals, and related health care providers). We have not focused on price so much as we have sought to focus on the combination of price/outcomes which is the true measure of the value received for the money spent. Given the highly fragmented, dyscoordinated way that care is delivered, it seems rational that if we could realign the financial incentives to pay for high value care, that providers would begin to delivery care in high value ways. Concepts such as the advanced medical home, Integrated Practice Units, and related variations around the episodes of care financing appear to hold some promise.

Unfortunately, we are a long ways from there and the physicians office remains a complex quagmire of inefficiency, an astonishing lack of information, near complete lack of coordination, and misaligned incentives that promote volume over quality. The physicians are literally drowning in paperwork, insurance rules, claims purgatory, difficult collection rates, administrative headaches, and no meaningful way to determine the status of their practice as a functional business operation that delivers an essential service. The ~80% of physicians (someone correct this number) who practice in a less than 20 physician practices, are barely floating while struggling to row against multiple opposing currents. It doesn’t have to be this way.

The new star of the health care IT set, athenahealth, was built to solve this back office quantum entanglement. I have no relationship with athena other an incredible respect for their founding team, the intrinsic power of their business model, and innovation curiosity of watching the network effect be introduced to health care. You see, people like Cady Heron, are unable to grasp what athena is all about:

Its the network, stupid.

athena understood more than five years ago that competing in the health care IT world with software in the “features and functionality” charade was a zero sum game. They experienced the nightmare of having to individually update individual medical practices with software in the version-revenue upgrade game. They realized that this was not adding the type of value required to truly change how their practices performed (athena, as you recall, was founded on the whimsical notion of introducing a new age birthing center concept). They actually did “initiate a service operation to handle billing with a software front end“, but quickly realized that the myriad insurance rules from the various providers created an incredibly tangled morass of confusion that prevented them from being paid.

athena.png
athenahealth Overview. “Just a service operation to handle billing”

So instead of remaining a service operation only, they became a business intelligence engine that aggregated insurance rules, created software to analyze claims accuracy at the point of care delivery, and then advised physician practices on how to optimize their revenue. This was done through a series of technology, product, and service innovations. However, more important than any of these, the single greatest (smartest) thing that athena did was to build these solutions to function cohesively as part of a solutions Network.

You see, every single provider on the athena Network is linked into the same database, uses the same version of the software, and benefits from the shared learning of every other provider on the network. Everything that athena does is an aggregation of the collective intelligence of all of its users. More users equals more refinement, increased efficiencies, and increased influence in working with the insurance carriers to continue to improve the process. By designing with an architecture of participation in mind, Ed Park was able to create a revolutionary force that is just beginning to be unleashed within the industry:

network.png

The athena Network . “Putting Other Practices to Work for You”

There is no other software vendor who has designed their system in this way. Therefore, I smile (more often smirk) when I see announcements from NextGen, Cerner, or rival Allscripts when they discuss their hosting services in the context of athena’s Network. They continue to grab at features and functions, not realizing that people are more than willing to settle for less features and function in exchange for the power of the Network. Consider athena’s no-nonsense, no-license fees, risk-sharing proposition: implement our software for free, we will increase your revenues 15-20%, and we get paid based on our success in increasing your revenue.

It is such a no brainer, that I once again request that any physician who is NOT using the athena Network to solve their back office conundrum to please explain the clinical, financial, or administrative rationale for not doing so. I am still waiting.

But as you can surmise, this is not all. In addition to the collective intelligence of the Network growing more powerful each day, the Network’s database of highly valuable practice information grows daily as well. This begins to reveal several potentially interesting ways that athena’s business models can expand in the future. First, athena is now positioned to provide detailed analytics and hhigh end advisory services back to the practices, and interesting enough, to the insurers they annually embarrass with their transparency initiative called PayerView. Second, given the ability to instantaneously update athena’s entire Network with all the latest quality and performance rules, every provider automatically is positioned to become part of a high performance network. athena’s software is being continually enhanced, Network wide, to help providers at the point of care make best practice clinical interventions which improve quality while simultaneously lowering costs. Third, the aggregate information from this vast Network becomes a powerful research opportunity to share best practices, increase efficiencies, and improve outcomes as a value add to providers.

Network membership, truly has it privileges.

So Cady Ostrich, you might want to reconsider your statement in light of the above facts (don’t even get me started on putting Mysis in the same galaxy as athena). My recommendation would be for you to get your head out of the sand, and into the athena cloud.

7 Comments
  • Vince Kuraitis
    Posted at 15:05h, 29 January Reply

    Scott, Very insightful. If we can use the collective intelligence of the network to do all this to enhance physician business operations, imagine the opportunities in using the collective intelligence of the network to improve clinical care.

  • Mark Frisse
    Posted at 03:41h, 31 January Reply

    One of the best syntheses I have read. Thank you very much.

    Mark

  • John
    Posted at 17:01h, 01 February Reply

    Scott, What aethna is doing is really not all that unique r as special as you make it out to be. Maybe athena is special for HIT, but in the bigger galaxy/world of business IT, no it is not for they are but replicating the model that Salesforce.com is using in the CRM space. Like the competitors of Salesforce (eg SAP, Oracle, former Siebel, etc. who have all introduced their own hosted, SaaS with very limited success) the same will hold true for HIT vendors that athena is competing against as these competitors will run into a couple of significant issues.

    First, moving from a traditional sales and distribution model of license with follow-on maintenance revenue to an annuity stream, ala SaaS, wrecks havoc with the sales force, particularly compensation plans. It also creates havoc on how one recognizes revenue as you move to an annuity stream, which to date Wall St has shown mixed feelings about.

    Secondly, is the re-architecture of the software itself to be delivered as a hosted solution for it takes far more than simply loading the software on to a Web server. My belief is that to be successful with an SaaS offering, you need to begin from scratch and build the software from the ground-up to serve in a hosted environment.

    I do like athena’s model and they will see continued success in small practices and hoave plenty of opportunities to extend their platform to serve this very under-served market. Where they may begin to hit some speed bumps, though, is scaling up to serve larger enterprises and become part of a broader network.

  • scottshreeve
    Posted at 18:00h, 01 February Reply

    John,

    I appreciate your comment. Welcome to health care! We are typically 5-7 years behind other industries when it comes to the adoption of business technologies. Heck, we have people who are thrilled to even be able to SEND an email to their physicians, let alone understand the implications of the SaaS model within health care.

    Athena IS unique in bringing this knowledge from other spaces into health care. It is also the first time in health care information technology that someone has developed this type of network. It has huge ramifications within health care to help address many of the problems we are currently dealing with – cost, quality, outcomes, efficiency, discoordination, etc.

  • Shad Wheeler
    Posted at 19:59h, 12 February Reply

    Scott, you are right on the mark about the impact Athena is having with their approach. I actually have a start-up that is similar to Athena except we are a pure subscription. However we designed our system to have the network effect. Much like Athena, the more users we have the more powerful and useful our service becomes. It really is amazing to me how far behind healthcare is in adopting new technologies. Hopefully we will see more of us entrepreneurs changing that and creating new and exciting services that will help solve the many problems facing our health care system.

    Keep up the great writing.

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