Jonathan Bush: “Where Does It Hurt?” | Talks at Google

Jonathan Bush: “Where Does It Hurt?” | Talks at Google


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]

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