HOST: So welcome.
Welcome Athenistas to Google-- for today's talks at Google.
It's interesting that both of our companies,
which are technology companies in the 21st century,
actually have names for our employees-- Athenistas
and Googlers.
And hopefully some of the Athenistas
and some of the Googlers will mix it up here today.
We're here today for talks at Google with Jonathan Bush.
That's all right-- if we can have that-- the ratio doesn't
have to be perfect.
JONATHAN BUSH: School here or abroad.
Just think of it as an exchange program.
HOST: So we're here to talk with Jonathan Bush, whose book just
came out, Where Does It Hurt?
An Entrepreneur's Guide to Fixing Health Care.
I was just speaking with one of Jonathan's associates
who asked me if I was familiar with the book.
And I've actually read the book.
And in fact, you can actually see some notes in the margins.
JONATHAN BUSH: Did you read it on paper too?
HOST: I read it on paper, yes.
I actually read this on a plane--
JONATHAN BUSH: There's still some left, people.
This is what they look like.
HOST: So Jonathan is, in addition
to the author of this book, which I recommend highly--
it really does make a very, very complicated topic much easier
to understand.
It also makes a very complicated topic possibly very scary
for some of us who haven't seen all our way through it.
But in addition to being a soon to be best selling author,
Jonathan, also the president CEO and chairman of Athena Health
which he co-founded in 1997.
He took public in 2007 when it was the most successful IPO
of the year, and continues to thrive and grow today in 2014.
HOST: Yes?
Were you going to say--
JONATHAN BUSH: That's what I do when
I'm feeling full of myself.
I just do that.
HOST: OK.
But we're not going to necessarily talk
deeply about the business today, although we'll get to that.
We'd like to talk about the book, which is just as
much the Jonathan story and the health care story
as it is the Athena Health story.
So Jonathan-- I'll start you off with kind
of a life of Jonathan question.
You graduated from Wesleyan, the College of Social Studies.
Is that correct?
JONATHAN BUSH: Yes.
HOST: How does a graduate of Wesleyan College--
or what does a person do when they graduate from Wesleyan
in the College of Social Studies to work their way to this?
What was the path?
What were some of the motivations?
What were some of the inspirational epiphany moments
that happened then, right after then,
right before then that eventually got you to 1997?
JONATHAN BUSH: Well, I think I'll go a little bit earlier.
And I was actually-- I was one of the few people
to receive early rejection from a college.
So that's where you apply early and they don't refer you
to the general admission pool.
They say wow, you are so far off in terms of your goals
that we're going to help you by saying
that you'll never come here.
HOST: OK.
JONATHAN BUSH: And--
HOST: Was that Wesleyan?
Was that Wesleyan?
JONATHAN BUSH: That was Wesleyan.
Which, of course, was immediately to me was like,
I'm coming there.
And so I took a year off and I went to BU
and I got good grades-- which was
exhausting-- the good grades.
But I did it.
And then I came back and I got in.
And I really wasn't-- after all that effort getting good
grades, I realized I wasn't really good at anything.
At anything.
I wasn't good at sports, and I wasn't good at math,
and I wasn't good at science, and I
wasn't good at literature.
But I liked all of it.
And I liked the idea of being a little better at all of it.
And the College of Social Studies
was an interdisciplinary program--
that was history, government, economics, and philosophy--
in little colloquia that you go through intensively.
And I-- it would intensively do it.
Did a bad job at all of them.
But there were only a few of us who
would dare try to take all of those on.
And it worked wonders for my dyslexia,
and it gave me an incredible confidence
at seeing the broad stroke of things.
And that's why-- Wesleyan's president just
wrote a book on why liberal education is
useful in an era of comp-sci and [INAUDIBLE]
it's about seeing the broad stroke of things.
In health care that's, particularly hard to do.
In fact, there are years and years
of well intentioned law making it almost illegal
to see the broad stroke of what's
happening in health care.
So that's how it got started.
And it was in fact, the idea of looking for places where there
was no broad stroke that made sense,
that got me to health care.
And so Wesleyan was perfect training.
Who knew?
Also, I was the absolute best Wesleyan graduate
in health care management, because there
were no other Wesleyan graduate anywhere interested
in the management of health
HOST: Great.
So you finished up at Wesleyan and you
had a couple of adventures, right?
That actually started to get you closer to this.
JONATHAN BUSH: Right.
It was-- I graduated with Wesleyan still
clinging to the idea that maybe there was something
that I could be good at.
And since the idea of making a lot of money saving people's
lives appealed and no one else in my family
had been a doctor except for my uncle Johnny, who was then 80
and had polio-- and so he couldn't compete with me.
I thought maybe I'd be a doctor and I'd
be like-- this was before ER, but it would be like ER, knight
and I'd save people's lives and [? work ?].
[INAUDIBLE]
And then I learned about this whole organic chemistry thing,
and there went that.
But before I discovered organic chemistry,
I-- a doctor friend-- I said, like I want to do this doctor
thing and he's a trauma surgeon who's worked on the President's
rescue squad that flew around the world case
the President got shot.
And he said, look.
Try before you buy.
I have a friend who's the police surgeon in New Orleans.
Get a job, get your EMT certification,
and get a job treating patients.
And then decide if you want to put seven years of your life
into being bad at school again.
And and I did, and I didn't.
And I'm really glad I didn't go all the way
through medical school and have this experience.
But I absolutely loved driving an ambulance at six
at night to 6:00 in the morning in New Orleans.
It was the greatest experience-- I think, probably
in my career to date-- including everything
that's happened now to date.
Partly because of the romance of being honored with the one
thing that is going truly horribly
wrong amongst a million people.
Right now amongst the 5 million people in Massachusetts,
there's some horrible thing happening.
And to be the one entrusted to help in that moment
and be allowed to race to that place
is romantic and important and beautiful.
But also, the whole system.
You get to travel through the whole food
chain from the back room of the house
all the way through the emergency room
and into the operating room and see all the hand offs.
Which, if you like the broad stroke of things,
provides an extraordinary front row seat.
And really inspiring business ideas come out of that.
One business idea was, wow, EMT's go things better
than doctors.
Paramedics can put in lines and tubes better than doctors
because we do them all the time in a moving
ambulance with someone who's trying to kick us.
And that's really good practice for being able to get it right.
Another idea -- so can't we downscale?
Can we create different specializations below doctor
and make care cheaper?
That was an idea that came out of it,
went into Athena women's health.
Another one was most of the people
we treated in an ambulance didn't need to be transported.
They needed a little bit of stabilization,
a little bit of help, a little bit of emotional support.
And we weren't allowed to do that.
If we didn't transport them, we'd get no money.
If we did transport them, we'd get $495.
So treating in place remains an enormous business opportunity
for somebody who likes that stuff.
And that's what got me going on this whole,
how does the whole thing fit together?
How could it fit together differently idea.
HOST: Great.
That was followed by, as we refer to it here in Cambridge,
the B school.
And--
JONATHAN BUSH: --Temple of capitalism.
HOST: Yeah, OK.
The temple of capitalism if we didn't catch that on the mic.
And consulting.
Right?
JONATHAN BUSH: Booz-Allen.
Yeah, there another to fail again at something.
So I was able to get into the business school
about seven minutes before the meeting where they were going
to sit me down and talk about how it's not working.
I just was with spreadsheets and the footnotes
and getting it all right.
I was terrible.
HOST: OK.
JONATHAN BUSH: I loved the problems we were solving,
but once I saw what the answer was, the seven
months of billing for PowerPoint analysis of it
all just was torture.
I think probably a lot of people come to Google
for that reason instead of going to [? DC. ?]
HOST: Or they've perhaps made a stop there and end up here.
JONATHAN BUSH: That's right.
[INTERPOSING VOICES]
HOST: They've made the stop there and they end up here.
We definitely have a lot of those folks
here, as you imagine.
So then the time comes to start a business.
Inspiration, market-- identifying a market
opportunity, inspiration.
Athena Health starts as--
JONATHAN BUSH: Yeah, well it started
as a series of women's health.
And alternative to maternity care.
A holistic approach to maternity care.
And it took all the things I learned as an ambulance driver,
as an army medic was even more extreme examples of delegation
down below the M.D. level.
And became very clear.
I did the work at business school-- Harvard Business
School is great because people call you back.
Say I'm doing research at Harvard Business School.
Oh, maybe I'll call them back, sort
of like I'm calling from Google.
I'll call back on that.
And built a model that showed that-- some breakthrough
insights like, not everybody who's pregnant is also sick.
But in the United States, everybody who's pregnant
gets treated like they're sick, like they're just
about to blow any moment.
When, in fact, it's a thing.
In fact, the first doctor turns out
to have been the subject of a perfectly healthy pregnancy.
That's a joke, because the doctor was--
HOST: Yes.
JONATHAN BUSH: And so the idea of matching health
advocates to healthy women and to help fewer of them
actually end up in need of a doctor,
and then matching doctors to unhealthy women,
and therefore those women got the benefit of a better
doctor who's actually spending all of their time
with sick moms.
Created better doctors, much lower cost of care.
And it was great, except we ran it into the ground
because we couldn't get paid.
We couldn't figure out all of the various accounting.
Get the hospital information, and the lab,
and the pharmacy, and the anesthesiologists,
and the neonatologists all in one picture.
We couldn't even get our own claims
paid because there was no code for a nutritionist doing
a visit instead of a midwife, even though the exact right
person to do it was a midwife.
Or nutritionist, et cetera.
HOST: So can you just slow down on that point for just
a second.
The year is what when this is happening?
JONATHAN BUSH: This was '97 through '99.
HOST: '97 through '99.
Explain again how you had trouble getting paid.
Again, a lot of folks in this audience will understand that.
But this video will be posted on YouTube if 280,000 subscribers
to that YouTube channel.
And so while they'll be very thoughtful people,
they may need a little bit more--
JONATHAN BUSH: So you guys on the street.
You ever get a bill in the mail from a visit
and it's got the thing you tear off in the envelope,
and then it says this is not a bill?
You ever get one of those, like from a lab like LabCorp
or whatever, and you're like-- it
says amount due and everything, but it says this is not a bill,
and you're like, well what do I do?
Or an EOB for your kids it's got lots of little rows and columns
and codes, and you're like so what do I do?
Doctors, they do that-- that's all--
it's like filing your taxes every day.
That's what it's like being a doctor.
Everybody you see, everything you do has to be defended.
It has to be charged for in one of 7,000 different--
what's called CPT.
Procedure codes.
And then the procedure codes need
to be defended by one of 10,000--
soon going to 140,000 different ICD diagnostic codes.
And then you have to write little bits that
explaine why those were the right diagnostic codes.
And then you file your taxes-- file your claim,
and you get this paid.
Well that is exhausting if you do
it exactly the way everyone else does it.
But if you try to mix it up and do a bundle of things that
aren't normally bundled together or use somebody that
isn't the doctor that usually does it,
the coding and defending and documenting
and tax filing energy goes right up to 11.
And that's what Athena ran into.
And that's what everybody in health care runs into.
I want to do it better, I want to do it different.
And then they find out what it takes to just do it at all
and they get bogged down.
The notion of a health care cloud.
Just like Google with-- I mean, I don't know the age.
But the amazingness of Google is hard to put into words.
You just put the words in the box,
and it pretty much gives you the thing you're looking for.
That's ridonculous.
I mean, that's amazing.
Right?
I don't get it, but it's awesome.
And what health care doesn't have-- now
health care is more difficult.
There's security issues and there's privacy issues
and there's complexity issues that
make that just calling what's out there not sufficient.
But it seems like we were thinking
at the time, God it would be great if some of this muck
could just be called and handled and linked in the background.
And I could say in English what I did, or what I want to do,
and why.
And then whoever needs to speak claims-ish or filing-ish
can translate it through Google translator
and tell whichever claims system that needs to know.
And that was where Athena-- it was the idea of not being able
to sufficiently code for, get paid for,
exchange information around what we were doing
that caused us to start to build our own cloud.
They couldn't afford the enterprise
software was available.
We had a-- my co-founder's younger brother
was president of the Harvard computer club.
They were like the technical support people
that volun-- that you could pay to join at Harvard.
And he got two of his friends and they came out
for the summer.
HOST: And this was in San Diego?
JONATHAN BUSH: Yeah.
And they-- we were all living in these two flop houses
where we all took little spaces of carpet.
Really good wall-to-wall carpeting.
So we just thought it's so clean.
HOST: That's a '90s thing too.
JONATHAN BUSH: Yeah.
Use it.
And it was great.
And it was amazing tacorias, so we didn't-- the food was fine.
And--
HOST: We'll get to why you ever left in a--
JONATHAN BUSH: It was tough.
It was tough.
If it wasn't for my then wife saying
she'd leave me-- which she did anyway 10 years later,
I'd still be there.
For good reason, I'm a workaholic.
But wow.
Amazing experience.
And what he started to say-- what our CTO
and what other guys started to say is, look-- you,
we should just write this.
We should just write this ourselves.
We were downloading stuff into Microsoft Access tables
and pivoting and figuring out what
we needed to report to whom that way.
But after a while, it-- why can't we just write this.
And so we started writing a little applet that
crawled the state Medicaid website.
In California, it's called Metacal,
to see if people-- they put in different-- screen scrape
different names or numbers that we had from our front desk
and see if we could figure out they
were covered that month for state assistance.
And then we started figuring out how to automatically add
the modifiers that you have to use to do the same coding when
it's a midwife seeing the patient instead of a doctor.
And little by little by little-- what we now
call lean development, but at the time,
we called just fix one more thing development.
It started to grow like wall mold
through different parts of the practice.
And pretty soon, even though I'd said
I went to the temple of capitalism,
I know the theory of comparative advantage.
We're a health care company, not a technology company.
Therefore we will buy our technology
and and trade and build our health care service experience.
It just happened.
The wonderful thing about Perl and internet coding
and the lean development process that
is allowed in that we can talk about the software
enabled service business model.
It almost takes on a life of its own.
It almost starts to-- It's so easy for so many people
to see the problem.
And it's so easy to solve it, and it's so hard
to stop them from solving the problem that it sort of just
goes at the pace of the imagination.
As opposed to, we're going to have a plan,
we're going to march out, we're going to set up,
we're going to climb the hill, and then we're
all going to do it.
And at the end of the year, have another plan.
It's more of a jazz band than an orchestra.
HOST: So the business model essentially changes
from a service--
JONATHAN BUSH: That's right.
We decided that we were too far ahead.
That we were a business that needed a health care
cloud to exist.
And so what we were going to do is build the health care cloud.
We were going to build-- So we changed the vision statement
of the company.
It was Athena Women's Health is going
to be a management infrastructure that
helps make women's health work as it should.
And we switched it to Athena Health--
not Athena Women's Health-- will be an information
infrastructure that helps make health care work as it should.
And once we did that, we were opened up
to selling to anybody.
And they didn't have to use our unique model.
They could be any way they wanted
as long as they wanted to connect.
And that that connection fabric would somehow, someday
be the sub strata that people could then build businesses
on top of.
And sure enough, the book is exciting
because that was this ridiculous idea 16, 15 years ago
to try to keep people from quitting.
I'm like, wait.
No, no!
You don't understand.
Because then it's going to be like this sub strata,
and then there's going to be all these Athena Women's
Health that are built on top, and you're like, OK,
I won't quit for another month.
But stop with the talk about the stuff.
And here's whatever there are in the book.
I mean, there's tons of them.
But there's like five or six in the book
that have-- folks that have actually done that.
So it's actually happening.
HOST: Right.
So talk a little bit about actually now building
a new technology company.
Maybe a little bit.
Because in the crowd here, we probably
have-- even though you'd like all of them
to work for Athena forever and we'd
like all the Googlers to work at Google forever.
They won't, because they're smart, they're young,
they're ambitious, they'll have their own ideas.
JONATHAN BUSH: They're getting very big.
It's scary.
HOST: Talk a little bit about what
it was like to actually build this new company.
JONATHAN BUSH: Maybe we should throw
in your question about the software and--
HOST: --and still I'll make it a two
parter about software enabled services.
And so, essentially, the concept of building this new company
in what is a new category, not SAS,
but software enabled services.
What do you mean by that, and how did you build that?
JONATHAN BUSH: So we didn't-- we named it in retrospect,
because what we wanted to point out to people was that we were
not SAS.
So you have the-- if you think about,
if you go to science museum to the Paleolithic exhibit
way back in the cro magnon, here are there enterprise software.
And you pay millions of dollars, and you
receive what amounts to a disk.
And then you buy machines, and you
have consultants which are these three legged punched that
come and burn in stuff and load up stuff, and download stuff.
And then they have classes where people
come to learn how to follow the ritual
of that particular enterprise software.
Then there are ASPs that come after that,
and these are where they have professional consultants where
you don't have to buy them.
They just are always there backing it up and hosting it
and doing the downloads, and you just
pay a little more every month.
And then suddenly, in comes in a chariot Mark
Benioff and you guys.
And you guys-- although you guys have a way cooler business
model.
But companies that say, listen.
I'm going to just have one copy of this thing
up in the world native on the internet.
And if you like it the way it is, you can come and use it.
And you're not going to have to get trained on it,
it's not going to be installed or downloaded.
And if you've been using it for a while,
I'm going to start to charge you.
Or I'm going to start to sell-- I'm
going to start to show you stuff that you didn't ask
for so that I can charge someone else, either way.
And so it's a tool that is used by people to either service
themselves or service others native on the internet.
And then the break from there-- which the muse for me
is [? BASOS-- ?] but we view ourselves
as an industrial strength, narrower, deeper Amazon--
is that the software, the tool is no longer the product.
It's not the monetizable thing.
It's just the store into which you go to get the service.
So Amazon sells the arrival of stuff in your life.
Either shipped to you, hover crafted to you,
or squirted to your Kindle.
And when you get that stuff, a little piece of it
goes to Jeffrey.
Right?
And he's a peaceful man.
He just wants a little piece of everything in the world.
And God bless him.
But what it does is, it changes his business model.
Because now he's not only in charge
of making a software work.
He's making sure that people actually
use the software in a way that he desires
and get outcomes that they desire in order to monetize.
So Athena-- now, anybody can use Athena.
And we don't charge you until you
get a claim paid, or a chart filed,
or a patient in your office.
It is the event.
It is the work being done that generates the revenue.
And so if we use the internet, or carrier pigeons,
or 2000 people in India data entering paper forms
that the insurance company just can't
seem to give us electronically, that's all good.
It can be knowledge, it can be software,
and it can be bone crushing work.
Forklifts included.
As long as the result gets got, the revenue is driven.
That idea opens up so much of the pre-internet world
to new businesses.
And we found one, but there are countless others.
And that idea of a software enabled
service was-- the way it started for us was we started
as a service that didn't even want software.
We said, look.
We want a piece of your profits as a women's health practice.
And they said sure, and then we said, OK.
How about a piece of your revenues as any practice?
And little by little, we keep designing our products
around a piece of the success.
Whatever success is defined as, a little piece of it.
Which liberates us to do the kind of lean developing
that a SAS company can do, but add
non-software, non-technology arms and legs around it to make
it go faster.
HOST: Right.
So you speak glowingly of enterprise software.
Earl on, when you're describing this course.
You're--
JONATHAN BUSH: --Well in it's time--
[SCREECHING NOISE] back in the day--
HOST: --Glowingly.
You-- would you--
JONATHAN BUSH: --Rule, move the jungle.
HOST: But you're-- do you-- are you competing with--
that could be.
[INTERPOSING VOICES]
HOST: How do you view Epic and Cerna today
as a competitor, as an opportunity--
JONATHAN BUSH: --Look, I think those are really well run
fabulous companies of another era.
And that era, I see as over.
But I get to sit at the theoretical helm
of this incredibly ambitious visionary group of people that
are constantly pushing, and pushing, and pushing.
Not every hospital is sitting at the helm of such a ship.
And so something safe that's of an era that they understand,
where parking places are part of your comp packet
with the little name on it.
And think about hospitals, right?
So a safe thing that's been going on for years
that uses the same ecosystem of consultants, and specialists,
and vendors, and allows the same career
paths that have always been there.
Going to be the CIO of a hospital
and there's a special trade association for them
and-- it's hard to imagine letting all of that
go until it's very, very, very safe.
There's that wonderful book Crossing
the Chasm of-- invention is amazing and it works,
and the early adaptors who would happily
deal with all the works of a new invention,
make you feel like you finally cracked the code.
And then you get to your mainstream customers,
and they're like, Jesus this is a mess.
I hate this.
And you have to go through this horrible chasm of making
your new age thing work as reliably as the old age did.
And health care is that way.
So we're having to get though to a place
where the safety that people associate
with Cerner and Epic, which are not safe.
They're systems are down 10, 20, 30 times more than ours are.
And none of the systems correlate the performance.
Epic doesn't lose money if they lose your claims
or if you lose your claims on Epic.
They don't lose money if your doctors
don't document their charts.
There's no correlation between your performance
and their performance like there is with Athena.
But still, that's a scary step.
So was electricity, and we seem to all
be OK with that at this point.
So was the internet, we seem to be banging away on that, so--
HOST: --Do you find that you're getting traction
with the concept of software enabled as opposed to SAS?
JONATHAN BUSH: For those who-- for the elites
that are listening to this YouTube, I think they get it.
So when one of our salespeople gets in front of somebody
and actually explains the difference, it's easy.
The word cloud helps people.
So thank God Microsoft spent all that money for everybody
on the cloud apps.
Let's go to the cloud, kids.
Remember that?
The idea of somebody who's actually
going to look out for your particular stuff
in a space, the iCloud-- that helped.
Because people-- now those things
don't work at the level of security and fidelity
that Athena net does.
Shouldn't have to for your photos or your whatever.
But the fact that at least it's a term
that people can grock and can start to get ahold of.
And that's helping us.
And Epocrates, which every doctor understands
and half of doctors use every day, helps.
HOST: Talk more about that, because some of the audience
may not be aware that you guys acquired Epocrates.
JONATHAN BUSH: We did.
HOST: What do they do, why did you acquire them,
how's it playing out?
JONATHAN BUSH: Epocrates is the best known and loved--
in terms of Net Promoter Score brand
in the world of practicing physicians.
So that's what we love the most about it.
We also love all the things that they have done over the last 15
years to earn that love.
I like the way they think and operate.
It is a decision support tool.
It's a read-only app that a doctor whips out
in the moment of care it says I'm
going to raise your dose because this one's not working.
But I just want to check to make sure
that this works on men the way I think it does,
or at your weight.
Or whether the on brand, whether the off brand generic
is just as effective.
Little questions that they're not
familiar with because they're not
doing that prescription enough that they know it cold,
they'll check it.
There was a thing called the physician's desk reference back
in the day which was this book, and they'd say, just
one minute, and they'd go out and make
sure they weren't killing you with the wrong dose.
Epocrates is sort of a living, breathing, interactive version
of that.
And it gives us half the doctors eyeballs
in the country on a very regular basis.
And it gives us the opportunity to use the plumbing
that we've been building.
There are now 100,000 connections
between Athena net and Legacy Systems labs, pharmacies,
hospitals, and more being built every day.
And now Epocrates can start to be wired up
like your Xfinity remote.
Back in that day, remember the first time
you sent an email off your BlackBerry
and there was in your Outlook account, and you're like,
that was awesome!
I didn't even do a cable, and it's there.
That opportunity to just stop going into these bowel
based enterprise software products
but but still have them if the hospital is
going to be stuck on them.
To be able to drive them like your Xfinity remote
can change your channel if you work at Google
and you actually can figure out how to do it.
That idea is the potentiality for us of Epocrates.
HOST: So working to expectations to date?
JONATHAN BUSH: Half and half.
So what they've done to earn the trust
and loyalty of physicians, they continue to do.
If bombs were going off, if the Syrians
were taking over San Francisco, they
would still be doing it with barrel bombs going off.
They have not made money.
And so we have to help them with that is a good thing.
That's the one thing.
And we will.
We will, because otherwise, we'll die
and we'll all be out of a job.
But I think we can do it.
It's not going to be hard.
HOST: What's the--
JONATHAN BUSH: --sort of like saying gravity is a thing.
You need the revenue, and--
HOST: Right.
Is there a next big hurdle for Athena Health?
Or is it--
[INTERPOSING VOICES]
HOST: What's the next biggest--
[INTERPOSING VOICES]
JONATHAN BUSH: I mean this is a $2 trillion mess.
Just a-- nobody understands it, doctors don't understand it,
everybody feels-- and I want to say this.
The thing about health care that gets
me is not how expensive it is.
That gets me a little.
But really kind of just cuts at me
is that for all that money, now taken by force of law--
you can't opt out.
It really isn't an expression of our humanity.
Think about everything on what we're wearing, where we work,
where we travel, whether we travel,
who we date-- everything we do with our personal power
is a way of tricking ourselves out and being a person.
And we can change it if we don't like it,
and we do many times before we die.
Somehow, health care-- you just take it.
You just pay for it.
It gets taken out your check like taxes,
and then you just get this experience that you don't like.
Or that you do, but it's a pleasant surprise.
It's not like you're in charge and they're
jumping to get to you.
They're not doing product management
to be more appealing.
When you see research-- 85% of Medicare beneficiaries
don't receive their Medicare wellness visit.
All the research talks about these idiot Medicare
beneficiaries.
I'm like, you mean my parents?
Well maybe your wellness visit sucks.
How about that?
Why don't you do it more interesting than you do it?
If you explain what happened in a way that's fun,
why don't you do product management the way
other businesses do?
And I totally forgot how I got on this tangent.
So everything in health care, if connected and analyzed,
could start to have a demand curve it.
Could start to be something that could do better
with product management and good pricing,
and do worse without it.
And that would be amazing.
So insurance companies need to be threatened with extinction.
All the cost management, and the accounting firms,
and all these guys who are doing these one offs little
spreadsheets and mailing them to the doctors about their taxes
need to be threatened with extinction.
All of these manual, isolated, guild like-- well only I
understand all the rules.
Only I can speak to Oz.
All of those guys need to be threatened with extinction
with some kind of product.
Even if it's a piece of crap, low end disruptive product,
at least it wakes people up to the idea
that maybe-- like you guys are doing with travel and movies,
and you're sort of nipping.
It's not quite-- I don't use you for the movies,
but maybe I do a little sometimes just to piss
off Fandango.
I just want to-- I love that everywhere there's
somebody nipping at the heels of these guilds.
Making sure they're earning the right for these I'm unique,
only I understand, only I can speak
to Oz pricing and performance.
And so that-- health insurance, laboratories, pharmacies,
in-patient care, home nursing care.
Self care.
We got nothing going on self care.
Why aren't our Fitbits connected to our charts?
Why don't our doctor wake up when we're behind?
Or why don't we get a really serious discount when
we do actually run every day for six months
instead of a stupid exploding thing on the Nike app?
Like, yay.
Nike likes me.
HOST: And you've paid them a lot to like you.
JONATHAN BUSH: Yeah, right.
For $150 I'd like you too.
So I mean, I'd like some real money.
I'm spending real money.
Look at our employees-- I don't know, $20 million?
That's I know for you guys, that's
valet tips at the Google garage.
But for us, $20 million is a ton of money
to spend on something that we make people--
you have to pay it.
And no matter whether you like it, like ah.
Yeah.
Doesn't feel good.
It's expensive and amazing.
OK.
We're rich.
Rich country, rich company, let's-- but if it's rich
and lame--
HOST: I'm going to come back to the industry in just a second.
And I want to get back to the journey for just a moment.
You had beautiful soft shag carpets, tacquerias.
But you're in Watertown now.
JONATHAN BUSH: Yeah.
HOST: Why move the company here?
JONATHAN BUSH: Well we founded the company at 94 Codman Road.
There's a temple built there now.
A beautiful-- OK, so there's an apple tree which I planted.
And they haven't cut down.
But it's a ranch house by the Codman farm in Lincoln.
And it was a split level.
So down the split was the world HQ
of Athena Health and the washer and dryer.
And up the split was the home of the Bush family.
And then in the yard was the conference center,
which was a Jeep Wagoneer where we kept flip charts.
The big paper with the markers, and we'd have meetings.
We dropped the gate down.
And then when we got-- we're like, well let's
just get a local medical group that we
can work on as our alpha site.
And none of them listened.
None of them-- absolutely not, we're not
going to let you touch anything it.
Go away.
And then we found a bunch of kooks.
I had to actually miss my accounting exam
at Harvard Business school.
I went to the guy and said, I don't want to fail your course,
but I will if I have to because I
have to be out of town for your final.
He said, what on earth would make you want to do that?
Said well it's the only time of the American College
of Obstetricians and Gynecologists
convention in Vegas.
I said, you know I've been teaching for 30 years
and I had thought up until this moment
that I had heard everything but that.
And he let me-- it was before cellphones--
he let me take the exam at his house in Belmont.
Put me in a taxi and said, OK, go to the airport,
don't talk to anyone.
And I went and I found basically the only obstetricians that
were in the right combination of brilliant visionary status
and about to go out of business.
Where they would let a bunch of guys who shared laptops
for savings to save money.
Like, hey, can I use a laptop? -- to take them over.
And we raised the amount of money
that we would need to basically populate their accounts
receivable from angel investors.
So we did that all.
Our world headquarters was 94 Codman,
but the group happened to be in San Diego.
So it was like, San Diego or nobody.
And since we fancied ourselves a global national chain
of women's health centers, who cares what your first one is?
Because we were going to migrate pods.
They were going to be pods.
We'd buy six doctors in every market
and then hire hundreds of midwives and nutritionists
around them-- a dual license.
And so it was like, what's the difference?
So we went for six months, and it was really in bad shape
after six months.
But we said, we have to declare victory because if we don't get
another pod soon, we won't-- we're going to run out
of the money.
And and no one will give us more money when there's
flames in the waiting room and everybody's unhappy.
HOST: We found-- just want to talk
for a minute about the local market
again for people who might be pursuing
their own dreams at some point.
We've had Bill [? Helman ?] from Greylock in here to talk--
JONATHAN BUSH: --Great guy.
HOST: --to talk about the local market.
JONATHAN BUSH: --Greylock dumped me.
Would not put the money.
I send him my quarterly.
I send him my quarterly every quarter, thinking of you.
HOST: I did not know that.
I did not know that.
JONATHAN BUSH: He's actually invited
me to speak to his annual partners meeting
in the spirit of humility.
He's going to have me go through play by play all the times I
tried to go to Greylock and got shown then [INAUDIBLE].
HOST: OK.
JONATHAN BUSH: Good guy, Bill.
But fabulous-- and fabulous friend.
HOST: We spoke a lot about the local environment
as a place to start and grow a business.
Do you have a view on this market
JONATHAN BUSH: I share Bill's view,
but I like-- I love the story of Brer Fox and the Briar Patch.
Don't throw me in the briar pa-- you know.
And then if you learn how to be in the briar patch,
you win in the briar patch.
Right?
This is the briar patch.
It's got reg-- it's the most business
unfriendly, bureaucratic, up in the nose, attitude emporium.
But you've got a huge amount of intellect,
a huge amount of capital, and a huge amount of problem
to solve.
Like the cost of health care here is off the charts.
The amount of financial management
that goes on wastefully here is off the charts.
And so if you choose a briar patch business
plan that isn't sort of, invent something really neat
and go instantly viral really fast,
this is a bad place for that.
But if you choose a thorny, messy place that's
going to take a lot of work, this is a great place.
Because you get all these-- I mean,
we get amazing resumes from people at Parner's Health that
are brilliant people, that are passionate,
that work long hours, that could grock technology as well
as anybody at Google or Athena.
But they thought that-- how many of you
know any of these people.
Krishna?
We're like, this isn't change-- this is not
the world changing things I thought it was.
I'm trolling the halls, it's political.
I'm not sure that I'm being as efficacious as I
thought I would be.
It's not like I thought it would be,
and yet I still want to be part of health care.
And we can Hoover those people up and use them.
So it's a great place for intellect,
and for passion-- for social mission.
It's not a place where it's like, quick, happy
go lucky virally explode across anything.
But if you want to be down in a hard trench for a long timee,
I think it's really good.
And the fact that [? Helman's ?] disappointed
is kind of perfect.
HOST: But he actually speaks very highly of the market.
JONATHAN BUSH: Good.
HOST: He speaks very highly of the market.
JONATHAN BUSH: He told me that he cried once to me,
oh, my partners in San Francisco's are making
all the money and I have to be at the helm of the ship.
I can't get anybody to do anything great here.
HOST: Well, I think that's the challenge he spoke to.
He thinks that the potential is all here, but we haven't--
JONATHAN BUSH: Well what he has to do
and what the next generation of entrepreneurs has to do
is-- hats off to the Google guys and the fact
that they went out-- you ever read that book
Nicholas Taleb Nassim, Black Swan.
Extremist stand.
And they went from zero to a billion
to a Google really fast.
And there are those business plans,
and, San Francisco is tuned.
When one of those pops, they're ready.
They know how to go that way.
It's like the movie, Wag the Dog in its description of the movie
industry.
They know tho to call, and everyone knows what to do
and it all comes together.
Boston is not that.
But the next generation of successful businesses
aren't going to go from zero to Google.
There'll be those every once in while, one will go off
and you'll see it boom.
But there'll be a lot of really, really fast compared
old fashioned companies but really, really
slow compared to instant viral companies.
And that's where I think the sweet spot of Boston is.
HOST: And I think-- not to misrepresent Bill-- again,
potential--
JONATHAN BUSH: --We just beat the crap out of poor Bill.
HOST: Capital intellect culture lacking.
Particularly a mentoring culture--
JONATHAN BUSH: --And that's right.
A mentoring and a social mission culture.
There is a very-- it's a little bit narcissistic
and it's extremely mercenary in San Francisco.
It's quick and it's no hard feelings.
It's great because it's failure friendly.
it's like, hey, I tried, I'm going to pic up my sleeping bag
and my port-a-fridge I'm going to go to another startup
and do it again.
And I'll either be a billionaire or I'll be picking up my fridge
and going somewhere else.
And it's fine.
And that mercenary-ness is good for a lot of businesses.
And we've done so much with the internet because
of those mercenary businesses that don't mind failing
and don't mind regenerating.
But there is another sector-- what
I would call the fiduciary sector-- which
has been over-regulated.
As soon as we care too much about baby precious,
we let baby precious get fat, and he's spoiled, and he cries
and we give him whatever he wants because we're afraid
he'll get upset.
And we've got a bunch of sectors of our society
that are like that.
Transportation and auto and financial services and health
care.
We're big fat incompetent-- oh, but I need a subsidy.
But no you don't, you need to die
and we need to get your people out and put
them to work in real companies.
But there are social goods.
They're quazi-social goods and we
are afraid of hurting our safety net.
And so we, for good reasons, create sclerosis-- moats
around them.
And we can still do it.
We can still-- this book talks about ways
of doing it in health care.
It can be done in transportation.
It can be done in education, it can be done in law enforcement.
All these places that are hyper regulated and over protective,
and therefore when you watch them operate
from the outside whe you're used to the Google way of moving
people through the office or doing anything,
you're like-- I would shoot myself on my 3rd day
at the police department watching
the way they have to do a report downtown when they show up
at a traffic accident or whatever.
And so those opportunities are waiting for us
to infiltrate and go more slowly but make a more profound impact
on society when we succeed.
HOST: We have a governor's election coming up here.
JONATHAN BUSH: Yes, I've heard.
HOST: Any thoughts on, is there an opportunity for a candidate
or a party or an initiative or point of view to help at all,
and if any of this is related to health care specifically?
JONATHAN BUSH: Well, it's very interesting.
Massachusetts is very interesting
because the very centerpiece of the Massachusetts
success over the last 20 years has
been related to the development of institutions who now are--
not through any moral intent of their own--
like the personification of the problem.
So we are not a little bit over bedded
in terms of inpatient beds.
We are massively over bedded.
We're not a little bit over priced,
we are hysterically like Kafka overpriced.
And so-- and there are millions and millions
of people who work in hair nets and blue smocks,
in unions and in organizations of other types
and who vote who work for those institutions.
And so how does the government pivot?
Because these institutions are strangling the worker base
and innovation base by making the cost of everything
higher than it needs to be.
But yet they are the establishment as well.
And so how do you-- you can't say
burn baby burn if you're the governor.
You know, bring down Mass General, yeah!
Not going to happen.
In fact, they'll even let them buy up more people
and perfect their monopoly in the south shore.
HOST: That would be the next question.
Should they have allowed that merger to be Attorney General
said yes to that merger?
JONATHAN BUSH: They're so far over the path
of government invasion.
The things that we could do in Massachusetts--
it's illegal to open up a better product across the street
from a hospital.
How about we make it not illegal to open up
a cheaper hospital across the street from a lame hospital?
That would really help us with our lame hospital problem.
It would put a lot of hospitals out of business,
and that is OK.
Hospitals going out of business when you're 45% over bedded.
We have 45% more beds than we actually need,
if you sort of follow the Dartmouth study,
give everybody what they want, and pay for it like it's OK.
It's illegal for doctors to work for companies,
even though entrepreneurs do better product management
than doctors.
There's all kinds of weird laws that have sort of built up.
Sort of like, you can have beer on Sunday laws
or whatever-- these weird from another era laws.
And so now the government, rather
than releasing those laws, is actually
trying to say, but also charge less.
I'll make you, I'll sue you, I'll investiage you.
I'll send my investigators if you don't charge less.
Which is so not cool.
It's sort of a Putin meets Castro for the people.
And so nobody is a good guy.
There's no way for a grass roots disruptor
to bring justice to the over chargers.
Because every time they do these deals,
it's harder and harder and harder
for the result in regulatory deal making.
It's fine for companies like me with 17 lawyers on staff,
but not good for the dudes at 94 Codman Road who
are like, how many minutes-- it's like, how much can you
do in six minutes when talking to the law firm?
So that's the-- I see it as-- it would be hard.
But you'd have to make a little pin
size holes in the moat, in the walls around the health
establishment to allow entrepreneurs
or just existing players that want
to try to be entrepreneurial.
And there's a lot of that energy.
Steward Health Care is a venture backed into the struggling
Catholic hospitals and turned into a venture backed
PE-type play.
And now, they have a lot of things
they're not allowed to do that they want
to, like close underperforming hospitals.
But if we let them, they'd do really well.
HOST: So we probably have five minutes left.
I'm going to try to hit two quick questions which I think
we can't contain within five minutes,
but we're going to try.
JONATHAN BUSH: I can try the whole snippy short answer
thing.
HOST: OK.
Give it a shot.
Will we be able look back-- if we lok back in six years.
Six years from now we look back--
JONATHAN BUSH: 20/20.
HOST: 20/20.
JONATHAN BUSH: 20/20 vision this is called.
HOST: That's right.
Are we looking at-- what determines
that Obamacare-- as we will define it,
as I will use the term-- is successful or not successful?
JONATHAN BUSH: Ah, yeah.
The problem, when you do-- when you
make everybody do something, there's no way AB test.
So Obamacare will be a success.
Because it'll be measured against whatever we had,
which was nothing.
And so, like oh, well everyone was covered.
Half the people will look at and say half full,
and half the people will look at and say half empty.
And when the mood goes one way, it'll be more than half
that are against it.
And when the mood goes the other way, it'll be less than half
that are against it.
Right?
But because there's no AB test, there's
no people who got to do another thing besides Obamacare,
then we'll never know.
I think in general, my final thought on Obamacare
is it didn't do so much harm that you can't still
be successful.
You can still be an entrepreneur in an Obamacare health care.
And so, no excuses.
Just get out and do it.
And I'll throw in one more thing.
If we had done a better job as entrepreneurs,
Obama wouldn't have done Obamacare.
It's only because the marketplace
didn't rise up and provide something
for the 40 million people who opted out
that we had it in the first place.
HOST: Totally different topic.
You're an author now.
JONATHAN BUSH: Yeah, right.
I paid a guy.
Are you kidding me?
HOST: OK, but for the parts that you didn't pay for.
JONATHAN BUSH: I was the outline and I was the ranter.
I ranted on my own.
HOST: What did you learn about yourself, process, rigor,
language, anything.
{INTERPOSING VOICES]
JONATHAN BUSH: I am a huge, passionate fan
of rigorous process and rigorous reevaluation of process.
Because my personal management of everything
is so bad that I just-- I'm in awe of anything
that can actually run itself well from day to day.
And so this book was structured into the calendar,
there were certain days for me to meet with Stephen,
there were half days, whole days, two hour checkins,
phone calls, and I was under a time crunch
to get whatever I wanted to get onto the page
onto the page within that structure.
And at the end, it was terrifying.
I came back from my sabbatical with a paper galley fat
with yellow stickies and underlines of the things
that I just couldn't bear about the book,
that we just had to figure out how to change.
Walked into my office what my fat galley,
and there was the first hard cover final copy on my desk.
Congrats!
So there's a certain-- there's something about,
everything in our life is so fungible, so editable,
so changeable on the fly.
We can lean develop ourselves in what
we say in our speeches and our code so continually
that forcing yourself into a final statement that
will stay still is an incredibly maturing and humbling,
and valuable, wonderful honor to be able to have.
HOST: Think you'll do it again?
JONATHAN BUSH: If everyone buys two copies,
I will do another one.
HOST: I do think we might have two or three minutes.
If there is one or two questions.
Sure go ahead.
AUDIENCE: If you were in healthcare--
HOST: I think just restate the question.
JONATHAN BUSH: If I was in charge of health care,
if I was the President and choosing directions,
I would first choose that presidents
don't choose directions for 400 million people.
That's what we have now, and that's not human.
That's not humanizing.
It doesn't give enough personal power to people.
They don't feel in charge, they don't feel good.
Even if what they get is amazing, it doesn't feel good.
I mean I always felt like world peace foisted on me by force
doesn't feel that great.
Right?
Whereas world pe-- I know that's extreme.
Forget that one.
Do you know what I mean?
When someone forces you on something--
so if I was the maximum leader, I
would try to make it possible for many, many, many choices.
Many, many, many ways of the word health
care to be expressed throughout society.
I think that's the one problem, the biggest single problem we
have with health care the United States today that the word
health care is now federally litigated down to a very
specific definition of an all-you-can-eat buffet
of interventions with no mental health and no emotional support
groups and no good food.
That's the definition of health care in the country.
And you are not allowed to sell health care if it;s not that.
And you look at the claims data like, sex life, friends
at work, mean boss-- these things correlate to health cost
way more than pap smears, mammograms.
Mammograms would just show now that adverse correlation health
stats.
Actually bad to get mammograms.
Canadian study.
Look it up.
So the idea that some one group-- no matter how smart
or well meaning-- get to decide what it is
is that thing that we ought to be a little more humble about.
A little more like, pull back, get a definition
that still provides a safety net, but is small enough
allow for a lot AB testing.
A lot of crazy ones to come and try on kooky stuff and say,
guess what?
This is my health care, and be OK.
HOST: Thanks.
We have one last one.
AUDIENCE: Jonathan, you talk about making more informed
decisions-- what if it, what if--
JONATHAN BUSH: Right, so the question is, what-- in the book
we talk about the ignorance economy
and how hard it is that the patients don't even
understand-- if they could get financial benefit from making
good health care choices, how would they
even know what choices to make?
I believe from an-- if you're an entrepreneur watching this--
I don't think that the step will be
from where we are to patients empowered.
I think the first step will be caregivers empowered.
It'll be entrepreneurs, doctors, hospitals, these kooky clinic
types in this book that accumulate--
that have enough deep cuts of clinical knowledge
to understand the coding and the referral
game and the sophisticated payment picture
well enough that they can start to shop and profit
from shopping in their patient's behalf.
Then the people who are now trying
to get those shopping doctor's attention
will need to start doing some product
management to explain it to the doctor.
And once the doctor gets it to where they understand it,
it'll be packaged close enough that the first super consumers
will be able to shop for it without the doctor
in the middle.
But that's-- the next decade or two is going to be doctors
and those in the role of doctor or caregiver learning to shop
and to profit from being really good shoppers as fiduciaries
for their patients.
That's the first way of in my opinion.
That's a good one to end on.
So everybody go start a company where
you're a caregiver shopping for consumers
and get onto Athenanet and we will do your shit work
that you hate and suck at.
HOST: OK so on that note, Jonathan Bush,
author of Where Does It Hurt.
For those of you who were too shy to sit in the front row--
JONATHAN BUSH: --missed a free copy.
That's why they didn't sit in the front row.
HOST: Let's try to reserve those for Googlers if we can, please.
Sorry Athenistas, but I think we might get something back
in profit.
JONATHAN BUSH: That would be weird if we came here and took
your food and your employees and the books that we brought.
HOST: So Googlers, come grab a book.
This can be found probably in the next ten days
on our YouTube channel.
I think it's at talks Google is the YouTube channel.
But just search for talks at Google.
And really a pleasure to have you.
Thank you so much.
JONATHAN BUSH: Oh, this was great.
Thank you guys all very much.
[APPLAUSE]