3 thoughts from athenahealth CEO Jonathan Bush: What he's reading, who he admires and what news he's watching like a hawk

"The fact that a CEO with such market dominance — who could spend the rest of his life patting himself on the back — actually cut himself to grow back a healthier part is inspiring to me."

Jonathan Bush, cofounder, CEO and president of Watertown, Mass.-based athenahealth, was in Chicago Wednesday at the National Healthcare Innovation Summit. Here, he answered a few of our questions.  

Question: What's the last piece of news that surprised you?

Jonathan Bush: "I have this fundamental belief the infrastructure of healthcare is obsolete. It's all pre-Internet. But because we love healthcare and because it's a public good, we create a regulatory environment where it's hard for it to die. And I'm always saying, 'These have to die or be disrupted.' The fact that all of the last remaining dinosaurs in the payer space are merging to me is evidence that this is going on, and I think what's coming after that — I do believe there will be a collapse.

What we do in healthcare to avoid a collapse is merge. The hospitals try to create a monopoly, buy doctors, put it all together and raise the price. It doesn't work, so they merge with competition, create a new thing, try to get cost savings out of that. Then they merge again. Eventually, I assume one day they just can't — their credit rating is just too weak. We've seen a fair amount of hospitals' credit ratings go backwards.

On the device side, the same thing. Welch Allyn can't grow, it's stuck making products and their pricing is dependent on third-party framework. All of the equipment is designed for inside the box. [Editor's note: This interview took place the morning Hill-Rom announced it was acquiring Welch Allyn.]

There is very little room [for insurance] to offer new or different things. The merging — that big, collection of mergers — I think it creates space so people can creep up and begin to offer disruptive alternatives. We're certainly seeing that on the provider side with the emergence of retail clinics. There is consolidation of the old way, and the collapse is good — as long as there are lots of scrappy alternatives around the outside. But if there aren't, we'll have a problem. That's what's in the news that I'm watching."

Q: Which CEOs, in healthcare or outside of it, do you admire most?

JB: "In healthcare, Toby Cosgrove closed two hospitals and chased high-profit care away from his system. He's attempting to replace it with a sales force flying in tertiary care [under bundled payments with employers]. The fact that a CEO with such market dominance — who could spend the rest of his life patting himself on the back — actually cut himself to grow back a healthier part is inspiring to me. It's hard to cut away what you have already and insist on what, strategically, you should have instead.

I think John Mackey [co-CEO and co-founder of Whole Foods Market] and Steve Jobs do and did the most important thing a CEO can do, which is ensure no matter how big they get, they are still really tiny compared to the opportunity. Never outgrow your segment. Never settle in the upper right quadrant of your market, where you have all the biggest customers.

Jobs said I'm no longer going to sell computers — I mean I'll sell them, but I'm not going to care. I'm going to take the computing out of computers and sell them where there is no computer. He died, and [Tim] Cook, who saw profitability of Apple spike, went from the iPhone 5 to the iPhone 6. I'm like, that's it? That's not good enough. That's not enough. Maybe the Apple Watch, but maybe Cook is ending it and Apple won't be small any more. It'll be big. You can be scrappy at any size as long as what you are looking out against is vastly bigger, better and more important than you. Once you fill your opportunity, you're it. You will be rendered obsolete by the next best thing.  Jobs made there be a frontier of enormous size and beauty.

Think about how many restaurants get the vat of Marsala sauce and the food comes from Sysco and it's essentialized where it's like, I don't really know what I'm eating. But at Whole Foods, I know everything about it. I can get it extra spicy, from this region, fully cooked, partly cooked. [Mackey] took on the established supermarket with unknown, commoditized food and came way in above it, then took on the restaurant and came way in below it. For people who work and cook, for people who work and come home to kids — it's ecstasy. Thank God [you] can go some place that feels good, smells good, has flowers before I come home to be a cooking mom or dad. I love that."

Q: What's the last memorable thing you read?

JB: "I'm reading "Killer Angels." It's the story of the Battle of Gettysburg, and it talks about these generals around Robert E. Lee: Their personalities, their tensions, their communication issues — where they didn't quite get it. They thought he said this, but he said that. Or they knew he was wrong, but they respected him so much they didn't want to get up in his face.

There's another set of characters, totally different — the Yankees — who are more intellectual, more diverse, spent a lot more time talking to one another and were never deferential. The [general] of the Union army was just forced into the job he didn't want because the other guy quit, whereas Lee was like royalty.

My whole team is going to Gettysburg in July with the chairman of the history department of [the U. S. Military Academy at] West Point, and we're going to walk to [the site of] each of these mess-ups. And basically from what I can tell so far it was the South's to lose. They lost it. Everything was in their favor and they blew it [due to] communication and culture. That excess reverence to Lee — nobody said, 'Lee, no, no.'

The other thing: Lee loved his men so much. He was so acutely aware of what they needed emotionally, that he managed on that. Some of his decisions came from the fact that he knew how they felt. He didn't dare disappoint them.

Basically, they picked the wrong fight. The Yankees had the high ground, but Lee knew his guys wanted to fight. He couldn't stand up to them and say, 'No, we're going to make them walk north off the high ground.' He did it because he loved them. I can't tell you how often, as CEO, you do something because you love your employee or your team that hurts the company."

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