The company was running out of money. A venture capitalist was willing to buy in. But Jonathan Bush was not ready to risk losing control of what he was building.
It was the spring of 1998, and athenahealth was still struggling to find its footing as a novel pregnancy care program in San Diego. Investor Mark Wilson said he’d pay $11 million for the company’s innovative digital billing and records system.
Bush turned him down, but also listened to Wilson’s advice — moving away from direct care and focusing on the software that would help him build athenahealth into a multibillion dollar company. Wilson recently recalled athenahealth and Bush as “the ones that got away.”
Twenty years later and a continent away, Bush is again fighting to stay at the helm of his company, now based in Watertown. This time, he’s reckoning with Elliott Management Corp., a powerful New York hedge fund offering nearly $7 billion to take over athenahealth — and potentially cast the charismatic chief executive aside.
Bush won’t be able to fend off this proposition on his own. Elliott believes growth under Bush has been sluggish and clumsy, and the fund has offered a premium for a chance to try a new approach. Bush now must make the case that athenahealth is more valuable with him at the helm.
Supporters say Bush has a shot at pulling it off. He has backing on the board and among his shareholders, and he’s not likely to relinquish control without a fight.
“He always talked to me about the fact that he wanted to be with athena forever, until he couldn’t work anymore,” said Todd Park, who cofounded athenahealth with Bush before leaving in 2009. “That’s how much he loves athena, that’s how much he is dedicated to its future and to making it the best that it could possibly be.”
Bush views the company, which sells a range of Internet-enabled services to health care businesses, as a way to reshape the future of medicine. The company made its name with programs that simplified the billing process, and it has expanded into offerings such as electronic health records and patient communication platforms.
Bush has said the products are part of a big idea: that freeing providers from onerous tasks will help them lower costs and make more time for patients.
“Health care as an industry has profound potential — and athenahealth is uniquely built to unleash it,” he said in a statement. “We’ve driven tremendous impact, and our momentum and what’s possible has only just begun.”
The blend of health care and tech is a uniquely Boston proposition, and athenahealth has become an important economic player here. In Watertown, the company has about 2,000 workers and is the prime mover behind the Arsenal on the Charles project, a development of cultural and commercial tenants including the athenahealth headquarters.
Bush has developed a level of celebrity in the medical field, and not just because he’s got a famous name. The cousin of former president George W. Bush is a compelling advocate for change, whose arguments can be condensed to simple dictums like “let doctors be doctors.”
And though he’s something of an outsider in the field, Bush has some street cred developed from a brief, early career stint as a paramedic in New Orleans. He displayed some of those skills in 2016 when he helped revive a stranger who had collapsed on a San Francisco sidewalk.
He’s known as a blunt leader who proudly shares his propensity to party. He appeared in Inc. dressed as Batman, for example. A 2014 profile in Fortune found him playing drinking games at all hours during a work event, and “regaling guests with tales of the time he nearly had sex at Camp David.”
His off-the-cuff remarks have not ingratiated him to everyone on Wall Street. Take his response to another prominent investor who made a public case for betting against athenahealth stock several years ago.
In one interview, he compared well-known short-seller David Einhorn to a character in the movie “Mean Girls.” In another, he said he wasn’t bothered by Einhorn’s arguments that the company was more style than substance. “‘I’m already rich,” he said. “Who cares?”
Critics say it’s time for Bush to operate what is now a mature company with greater attention to detail, building relationships with more medical practices and nailing down lucrative hospital deals.
“The company’s strategy, operations, execution, and leadership . . . have failed to generate returns for shareholders, despite a highly attractive market opportunity and a differentiated product that is the envy of the industry,” Elliott Management wrote in a letter to athenahealth’s board.
Change can be slow in health care, however, and many still believe Bush is the one to steer the company toward long-term success.
Zoë Barry, a former athenahealth employee who is now the founder and chief executive of the Boston startup ZappRx, said Bush’s personality is part of his appeal.
“I’ve taken a lot of the qualities I value . . . as a leader because of what I’ve seen him do,” said Barry, who also formerly worked as a baby sitter for Bush’s children. “He’s outspoken and zany, and I think that’s a positive thing. I think it shows he’s human.”
Park, who would become former president Obama’s chief technology officer after leaving athenahealth, said Bush’s ebullience “is a key ingredient in people feeling willing to talk with him, and say things to him and disagree with him.”
That personality trait might help Bush now as he heads for a potential board showdown.
Elliott has not said whether it would retain Bush, but he has already agreed to give up his titles of chairman and president amid discussions with Elliott. The company has also cut 500 jobs, or 9 percent of its global workforce, during the process.
Bush only owns about 1 percent of the company, which means he’ll have to convince his board. Though Bush still has a seat, the board is now led by former General Electric chief executive Jeff Immelt.
Sean Wieland, a senior analyst following athenahealth for the financial firm Piper Jaffray, said he believes Bush could turn back Elliott’s advance. But he said the experience has also been chastening.
“It made him sit up a little bit straighter and take notice and appreciate the investment community as a stakeholder in his business,” Wieland said.
Wilson, the investor who offered to buy athenahealth’s software in the 1990s, said he came away with the impression that Bush “understands his limitations and is willing to change.”
“We all like to think when we first start off on something that we have it all figured out, and we have the right idea, but when you’re in business, you have to learn to pivot.”Andy Rosen can be reached at firstname.lastname@example.org.