Health IT

Athenahealth’s Jonathan Bush: Healthcare industry is “in the midst of a sugar low”

Though Q4 and full-year revenue for the Watertown, Massachusetts-based company were up, bookings dropped. CEO Jonathan Bush contributed this to the healthcare industry currently being in a “sugar low.”

Jonathan Bush, chairman and CEO of athenahealth

During an earnings call with analysts on Friday, athenahealth CEO Jonathan Bush said the healthcare industry is “in the midst of a sugar low after years of rapid growth, driven by government stimulus.”

“Demand for our services has been weaker than we expected this past year,” he added, according to the Seeking Alpha transcript of the call.

On Thursday, the Watertown, Massachusetts-based company reported fourth-quarter revenue of $329.2 million, versus $288.2 million during the same time period of 2016. Full-year revenue also increased 13 percent to $1.22 billion.

But Bush highlighted that the company didn’t meet its bookings goals for 2017. For 2017, the EHR vendor’s consolidated bookings were $293 million compared to $348 million in 2016.

During the Q&A portion of the call, one analyst pressed the issue, asking how much of the ability to drive better bookings is in athenahealth’s control.

Bush said his company is moving toward being a national network that provides services, which is something everyone in healthcare will need.

“The economics of medicine just do not support individual kind of craft brewing of the back office of medicine, and it’s getting worse,” he said. “So we’re really down to not whether but when. What we are doing to draw people into market is, as I have said, deepening the services so that you can see real cash more certainly sooner by switching.”

Another analyst moved the discussion to whether MACRA and MIPS can help reaccelerate market activity.

Bush retorted with a definite no. The money involved is small potatoes, and reimbursement takes too long. Instead, he pointed to financial pressure as the item that will drive activity.

During the call, Bush also took time to introduce Marc Levine, who took the helm as the company’s executive vice president in December and as CFO and treasurer on January 2. Former CFO Mark Stubelis stepped down in July.

Levine said athenahealth has mostly completed its employee reductions and worked toward cutting back on its real estate footprint in San Francisco. Last year, the vendor announced plans to cut 9 percent of its workforce and close its offices in San Francisco and Princeton, New Jersey.

Photo: athenahealth