One of many earliest figures in healthcare expertise is making a comeback.
In 1997, Jonathan Bush based a ladies’s well being and natal care clinic known as Athena Ladies’s Well being, however pivoted lower than two years later to construct apply administration and doctor billing instruments as Athenahealth. Over the following 20 years, Athenahealth grew to become a significant supplier of digital medical data and medical billing expertise with greater than 100,000 suppliers utilizing the corporate’s instruments by the point Bush resigned in 2018 amid a protracted takeover bid from Elliott Capital Administration, the hedge fund run by activist investor Paul Singer.
After three years out of the sport following being “full-on canceled,” as he places it (on the time of his ousting from Athenahealth, stories circulated about his remedy of female employees and his ex-wife), Bush returned to the healthtech sport late final 12 months, founding Zus Health, which is targeted on making a shared well being information platform designed for use by the rising crop of digital well being firms. Final 12 months, Zus raised a $34 million Series A round of funding led by Andreessen Horowitz to construct out his imaginative and prescient. Bush spoke to Quick Firm in regards to the shift going down in healthcare that he’s hoping to capitalize on, how healthtech founders can succeed as VC funding contracts, and what he makes of Amazon’s acquisition of OneMedical.
What do you see as shifting in healthcare? How are digital firms difficult established well being methods and what’s the chance there?
[With] conventional suppliers, their care is related to their geography and their referral patterns are related to different individuals of their space. The hospital itself can solely serve the individuals that may drive there. They’re in a neighborhood battle for a deep, vertical monopoly.
With the pandemic and the continued evolution of the concept of shared software program instruments like Twilio or Stripe, there’s additionally been 1000’s of firms that have been born and raised in the course of the pandemic to make use of our new acceptance of digital-first [experiences] to do an enormous swath of care higher. Not by doing a vertical monopoly play, however as an alternative saying, “I’m going to take one slender factor—anxiousness, prediabetes—and crush it nationally.”
These new firms don’t give a shit about vertical monopoly. They don’t have any plans on even having an examination room, not to mention a lab, a pharmacy, an working room, an imaging heart. This new class of firm, mixed with a brand new class of instruments and acceptance of digital-first [healthcare] as advantageous, perhaps higher, created a window—and that’s what obtained me again to work.
What’s Zus Well being trying to assist these digital well being firms do?
Each PowerPoint slide in each convention at each tutorial medical heart within the historical past of time since PowerPoint was invented asks, “Why don’t we have now a standard well being file, or no less than why don’t we have now interoperability?”
[Part of it is that] medical data are designed for the first use case of defending fee. It’s not really what you’d write or ask to see to optimally deal with somebody. You may scroll round and discover some helpful shit and use your instinct to piece collectively the remainder, nevertheless it’s actually constructed as an information backing for getting a declare paid, so there’s a variety of frustration.
When a affected person arrives someplace, 90% of what occurs is about shit that’s already occurred someplace else—simply tons of mapping that must be carried out earlier than anyone can present you something, and all that shit is bloat. It’s costly duplication.
The outdated well being suppliers don’t need to know in regards to the different stuff, and so they wouldn’t thoughts duplicating it as a result of they in all probability have a pharmacy, imaging heart, or lab of their very own. These guys need to [expand their scope and keep that patient pool], so that they actually don’t need to share information with anybody else. They actually don’t give a shit about what occurs far-off from them.
[But now there is] this new class of firm that on their most egocentric day are blissful to share information as a result of that’s not how they become profitable; they’ll’t win by controlling your referral patterns past what they’re centered on. They bring about the main factor you have to take up that drained outdated PowerPoint slide, which is a enterprise case. By being very centered, they’d have a greater product if they may know what the hell else is happening [with a patient] with out having to gather it themselves.
It seems, all of them want type of the identical [tool kit]—you want a CRM stack, and it’s obtained to be HIPAA compliant, and it’s obtained to be safe, and also you’ve obtained to have the ability to connect paperwork. These firms have been spending the most costly capital they’ll ever increase—that first spherical—to construct it.
Zus says to those firms: You aren’t going to win by with the ability to get the fundamental information on the affected person—everybody wants that—and also you aren’t going to win by with the ability to do affected person relationship administration. I’ll get you all that shit low cost and good—all API-first, so nobody will comprehend it’s Zus behind the scenes.
The Zus dream isn’t being a star. It’s going from being a waterboy to a robust water man. And that’s the place that ends. We simply need to be the enabler of a thousand nice companies, and if we are able to make that horny, many, many horny issues will occur upstream of us.
Amongst these newer firms you’re speaking about which can be constructing new fashions is One Medical, which is doing main care otherwise. What do you make of Amazon acquiring One Medical?
As conventional healthcare assumes an ever deeper vertical monopoly posture, that’s ever extra at odds with client curiosity, and as medication itself turns into evermore subspecialized, the necessity for a hyper clever (always-on) layer that’s not beholden to anyone hospital is lastly coming into its personal.
The acquired old-school practices of most well being methods do not need the expertise or different info administration sophistication essential to be immediately out there when questions and issues come up. But many of the early digital well being options lack intimate information of the affected person. Amazon/One Medical spans each. The issue they’ll face is client alignment. Whereas Amazon has been capable of preserve its true North Star ever “nearer to the client,” One Medical has wanted to hunt fee from one hospital supplier over one other. This channel battle with client curiosity can be very robust to iron out because the market heats up.
You’re no stranger to healthtech, however now you’ve gone again to being a founder at an fascinating time—VC funding in digital well being is slowing down. How have you ever approached constructing Zus on this atmosphere and what recommendation do you could have for different founders?
Begin with widespread instruments—don’t reinvent the wheel. Lease the wheels after which construct one thing distinctive on prime of it. When capital was plentiful and there was no constraint, you possibly can be as sloppy as you need and nonetheless look good so long as you bought buyer progress and a few type of scientific outcomes that consultants might agree have been actual. Not true anymore.
It’s worthwhile to present long-term worth, and in the event you’re blowing some huge cash on shit that’s not distinctive, you will be unable to indicate that. Rapidly get to the factor that nobody else has and spend all of your R&D, design, product time on that and lease every part else, no less than till you get to interrupt even or get to some type of operational stability. That could be apparent recommendation, however throughout this final orgy of almost free capital, individuals forgot it, and lots of younger individuals began companies not ever realizing that was a factor, and so they’re about to get an enormous bucket of water on their head explaining it to them.
I’ve watched in a really brief time frame this digital well being area go from a world the place individuals don’t even know what VC is to individuals who assume VC is a human proper. It in all probability gained’t return to zero—”I’m sorry, son, however enterprise capital isn’t actually for healthcare”—however one thing like “enterprise capital isn’t actually for firms with no plans to ever become profitable.”
Funding is one hurdle for brand new firms, expertise is one other. How is getting prime expertise into healthtech completely different now than once you have been beginning out?
Once I began Athena, there was actually this renaissance of individuals determining that the web might do greater than college blogs and uneven porn, and rapidly, there have been all these potentialities, however no person’s desirous about healthcare. [We asked ourselves,] what would you must do to trick good younger individuals into really taking their abilities and placing them in healthcare? An enormous a part of constructing Athena was that arbitrage—getting some extraordinary individuals that may not in any other case have been present in healthcare.
Simply as we tried to draw younger, vibrant individuals to healthcare tech within the late ’90s, 2000s, there’s now a complete bunch of individuals which can be type of existentially unsettled whereas they work at their [tech job]. It doesn’t really feel good making the algo higher this month, however traditionally, in the event you transfer to healthcare, you’re going to go backwards. We hope now that we are able to say: It’s not gross what you’re engaged on, and the instruments listed below are simply as cool, the dimensions is simply as grand.
