The Bush who pays the bills
As CEO of fast-growing AthenaHealth, the President's cousin Jonathan is trying to change the way doctors process their paperwork. Now Wall Street is courting him.
(Fortune Magazine) -- On the last day of November, Jonathan Bush, 37, the CEO of AthenaHealth and a first cousin of the Commander-in-Chief, sat restlessly on a Louis XVI - style sofa in the Presidential Suite of Manhattan's Pierre hotel and faced a pair of investment bankers from Piper Jaffray. Minutes earlier Bush had wrapped up a speech at the firm's annual health-care conference 39 floors below, and now the moneymen were turning on their charm. AthenaHealth, a fast-growing company in the increasingly hot business of providing information technology for doctors' offices, is probably heading for an IPO this year, and Piper would like to run the offering. But that subject was hardly touched - perhaps because, with the hopelessly extroverted Bush in the room, the Piper bankers could never quite gain control of the meeting.
"Oh, so I was with Billy and his new co-host last night," says Bush, standing and invoking his younger brother, the TV celeb who has a new reality show, Grease: You're the One That I Want, in which contestants compete for a lead role in the Broadway revival. "Her name is Denise van Outen. She's a Brit and she's so charming. She's the only person ever that didn't tell me to shut up when I'm doing my English accent! When I'm with the Brits, I do the accent. I can't help it."
Depending on the American public's appetite for "Greased Lightnin'" and English blonds, it could well be a breakout TV season for van Outen, whose shapely derrière once earned her the "Rear of the Year" award in her home country. But it is almost certain to be a landmark year for this hyper-energetic member of the Bush clan and his ten-year-old company. Never mind that, with some $80 million in revenue for 2006, AthenaHealth is puny. Or that it isn't yet profitable. (Bush says he is aggressively reinvesting would-be earnings in new staff and technology.)
The point, in the opinion of Bush's various financial suitors, is that his company sits smack-dab in the sweet spot of a sector that is beginning to boom. While overall spending on infotech in the $1.8 trillion health-care market is growing at roughly 7 percent a year, IT for doctors is growing at close to 20 percent, according to research firm Frost & Sullivan. Bush's company, which offers web-based software and services to physicians' offices, has averaged more than 100 percent annual sales growth over the past five years. AthenaHealth thinks of itself as the ADP or Paychex of the medical world - a high-tech outsourcer that handles the nasty business of insurance-bill submissions and record-keeping for doctors the way those companies take care of payroll services for big employers. Other companies sell do-it-yourself billing software to doctors or process claims for a fee; Athena combines the two models. Bush makes his web-based software available more or less free, promises a higher rate of bills successfully processed, and takes a cut (5.25 percent on average) of each one paid. Right now the competitive landscape is highly fragmented, with players ranging from giants such as GE and McKesson to myriad mom-and-pop private companies. According to Piper Jaffray's bankers, "growth capital is desperate for investable companies" in the sector. Combine that with AthenaHealth's unique approach and Bush's star power, and you've got a highly marketable package.
Not surprisingly, AthenaHealth has drawn an A-list group of backers, including Oak Investment Partners, Draper Fisher Jurvetson, and Venrock Associates. It's also attracting top-notch executive talent, including James McDonald, a former president at mutual fund powerhouse Fidelity, who joined as COO in October.
But the focus - in his appearances on CNBC, at industry conferences, in meetings with prospective clients, and for investment bankers on the prowl - always comes back to Bush. Not that he can help it much. Like his brother Billy (who once asked Britney Spears if Madonna or actor Colin Farrell was a better kisser), Jonathan Bush is liable to say virtually anything to anybody at any time. And like his famous cousin and uncle (Presidents No. 43 and 41), he can dominate a room and, um, coin a phrase. ("We've been accumulating thick phlegm in the health-care body administrative for years," he says, describing his company as the "penicillin.") These may not seem like necessary qualities for a health-care executive. But then again, maybe an outsized personality is needed to make headway in that (ahem) phlegm-choked U.S. health-care system and deliver the technological revolution the experts have been predicting for decades now an upheaval the world of medicine has steadfastly resisted.
As it happens, Jonathan Bush was the first annoying person I ever met. It was 1977, I was 8 years old, and we were crowded into the backward-facing rear seat of a station wagon carpooling to an after-school woodworking class in New York City. He was talking at the top of his lungs, nonstop. Seventeen years later I was a groomsman at his wedding. I'm pretty sure that progression from annoyance to affection is par for the course with Jonathan.
He comes by his theatrical streak honestly. His father, Jonathan Sr. (brother of George H.W. Bush), founded a successful money-management firm, but only after he spent a number of years trying to make it on Broadway. Unlike his brother Billy, a lacrosse star, Jonathan was never a gifted athlete. And he has always had a tendency to talk loudly with his mouth full. At Andover, where we attended high school together, that combo didn't instantly make him cool. Moreover, he was hampered by dyslexia. But he emerged as a sort of king of the theater geeks, with a sharp, self-deprecating sense of humor.
Bush caught the health-care bug working on an ambulance crew in New Orleans in the summer of 1989. Thinking he might want to be a doctor, he took an EMT class and signed up for a three-month tour on the D shift: 6 P.M. to 6 A.M. six nights a week in what was then the most violent city in America. "There were, on average, two shootings or stabbings, two heart attacks, and two trauma accidents a night," he recalls. He also remembers loving every minute of it. When his uncle launched Desert Storm in 1991, Jonathan took a break from Wesleyan (where we were again classmates) and enlisted in the Army as a medic. "That made a huge impression on me," the first President Bush tells me proudly. Jonathan didn't end up seeing combat duty, nor did he decide to become a doctor, but the affinity for medicine stuck.