athenahealth seeks stability after period of turmoil

The Watertown-based health care technology company has new owners, a new CEO, and a new focus on its core business

CEO Bob Segert the lobby of athenahealth in Watertown. The company that provides network-enabled services for health care and point-of-care mobile apps in the United States.
CEO Bob Segert the lobby of athenahealth in Watertown. The company that provides network-enabled services for health care and point-of-care mobile apps in the United States.Erin Clark / Globe Staff/The Boston Globe

WATERTOWN — In the world of health care technology, athenahealth exuded cool. It boasted an innovative spirit, reflecting the grand vision of its colorful CEO, Jonathan Bush.

Bush, who co-founded athenahealth in 1997, sought to position the company on the cutting edge of technology and became nationally known for his call to “unbreak” health care.

But after years of turmoil and change — including the messy departure of Bush — the company’s new leaders are going in a different direction: a more predictable and focused athenahealth.

The company has endured enormous changes. In the past year, it was acquired by two private equity firms, it hired a new leadership team, and it merged with another technology company, Virence Health.


Bob Segert, the chief executive installed last year to lead athenahealth out of that tumultuous period, said the company has regained stability. Employee turnover has tapered off, and new customer sign-ups are up, he said. After the Virence merger, more than 160,000 providers use the athenahealth network today, up from 120,000 providers a year ago.

Under Segert, the company is focused squarely on its core business of selling electronic health records software to doctors offices across the country. Executives plan to build on that with services to outsource more administrative work, such as billing and coding, for health care providers.

Athenahealth’s previous management team pursued too many different projects and became distracted, Segert said.

“There are many things that we said, ‘No, we’re not going to do that anymore,’ ” he said in a recent interview. For example, the company is no longer investing in building its health record system for hospitals, an effort that began under Bush. Instead, it’s doubling down on the ambulatory, or outpatient, market.

“We’re going to start completing projects. We’re not going to start something, and then bright shiny object syndrome [hits]. We’re going to stay consistent in our strategy and get things done,” said Segert, 51,who previously led other tech companies after private-equity takeovers.


Now that it’s a private company, athenahealth no longer has to publicly report its results. Segert said the company is approaching $2 billion in annual revenue and profits are strong, even while it’s spending more to develop and improve its technology.

Athenahealth makes software that manages patient records and helps medical offices with billing and other administrative tasks. Because its software is cloud-based, the company also aggregates data from across its network to identify health trends, such as the spread of the flu.

It competes with several other vendors of electronic health records, including Westborough-based eClinicalWorks, and Epic Systems of Verona, Wis., which makes the expensive software used by many large hospital systems in Massachusetts and nationwide.

Despite its growth in the market, in 2017, athenahealth drew the attention of activist investor Paul Singer, who targeted the company’s lagging stock price — and Bush’s leadership.

Bush, a cousin of former president George W. Bush, was known for his blunt talk about problems in health care, including the administrative burden on doctors. Loyal employees found him energetic and inspiring. But Wall Street found him brash: he freely criticized competitors and made flip remarks about investors.

In one TV appearance, he dismissed those shorting his company’s stock by saying, “I’m already rich. Who cares?

He finally left the business he helped create in June 2018, following allegations of improper behavior, including a years-old incident of domestic violence involving his former wife.


Bush, now executive chairman at Firefly Health, a primary care startup, declined to comment for this story.

Athenahealth went private last February when it was acquired by Veritas Capital and Evergreen Coast Capital — an arm of Singer’s Elliott Management — for $5.7 billion.

“The dust is settling and they are moving forward,” said Cynthia Burghard, a research director at Framingham-based IDC Health Insights.

“When Jonathan built the business, it was a little bit of a Wild Wild West, but he did build a successful business,” she said. “It’s nose-to-the-grindstone at this point, which is what they need.”

By staying focused on its legacy business, athenahealth could renew confidence among current and potential customers. But it also risks missing out on new opportunities for growth, Burghard noted.

The new management team has moved quickly to integrate Virence — formerly part of the GE empire — into athenahealth. Employees from both companies are working under the same roofs, from the Watertown headquarters to offices in Bangalore, India. Athenahealth cut 4 percent of its workforce after merging with Virence. It now employs about 5,300 people and is hiring.

In December, the company sold its Watertown campus to Alexandria Real Estate Equities for $525.5 million — but it will remain there and lease back space. It’s consolidating employees from several buildings into one sprawling building along Arsenal Street.


Executives are keeping the athenahealth brand name and said they’re striving to maintain the culture of “energy and passion” that the company was known for before the recent upheaval.

The workplace is still dog-friendly, though Segert himself happens to be allergic. (He has an air purifier in his office.)

Segert has a home and family in Dallas, but he also has apartment in Boston and spends weekdays at athenahealth’s headquarters, company officials said.

He doesn’t know Bush.

“None of this is about my personal brand,” Segert said. “I’m not trying to get in the press. I’m not trying to make a name for myself. I’m not trying to get on CNBC.

“This is about us building an amazing company that’s aligned against our vision.”

Clarification: An earlier version of this article incorrectly characterized CEO Bob Segert’s relationship to former company head Jonathan Bush. Segert met Bush after his interview with the Globe.

Priyanka Dayal McCluskey can be reached at priyanka.mccluskey@globe.com. Follow her on Twitter @priyanka_dayal.