Over the past two decades, the government has tried and failed to create a unified medical record system in the United States. The idea sounds easy enough: if a patient ends up in an emergency room on vacation in Florida, the doctor should be able to access their medical history in New York. In the aughts, state and local governments started to build towards this, but efforts largely lost momentum without the funding needed to build and maintain the infrastructure to warehouse such huge troves of data.
Jonathan Bush, the punchy and oft irreverent cofounder of Athenahealth, is betting the ever-growing army of new digital health startups has finally created the market conditions to make such a system work—and he plans to build it. His new venture, the Watertown, Massachusetts-based Zus, launched Thursday with $34 million in funding led by Andreessen Horowitz. Bush thinks he has the key to unlock the door that’s stymied the likes of Google, Microsoft and Intel.
While technically Bush only started self-funding Zus around six months ago, in many ways it’s the same vision he’s been working towards since cofounding Athenahealth in 1999. His idea to create “the healthcare internet” ended up being narrower in scope, as Athena evolved into a successful cloud-based electronic health record and revenue cycle management company that went public in 2007. After 20 years as Athena’s CEO, Bush was ousted in an activist campaign by Paul Singer’s hedge fund Elliott Management, which later took the company private with Veritas Capital in a $5.7 billion deal. During the messy proxy fight, prior allegations of domestic abuse surfaced from a custody battle with Bush’s ex-wife, as did sexual harassment allegations by a former employee.
Finding himself in unexpected early retirement, Bush has taken time to reflect on his own “epic f-ups” and also take stock of the digital health landscape. He made some angel investments and joined a few boards, including the virtual care startup Firefly Health, where his wife Fay Rotenberg is CEO. And with Zus, he intends to make good on his original version for Athenahealth. The name of the business itself is a nod to Greek mythology: in those stories, Zeus was the all-powerful ruler of Mount Olympus and father of Athena.
“We intend to maintain a single record for every American,” says Bush, 52. His company plans to accomplish this by modeling itself after some of the most disruptive software startups in Silicon Valley. In addition to being a massive cloud-based data warehouse the likes of Snowflake, Zus will also provide the pipes and connections for healthcare data to flow, the way Plaid does for financial services. The company will have tools for software developers, just like GitHub, so startups can customize both the back-end and front-end of their platforms that sit atop Zus’ data repository. Rather than sell to doctors or hospitals or insurers, Bush says Zus will sell to the 15,000 digital health startups that raised a combined $14.8 billion in venture capital last year.
“If they all have a waterboy, a support system, to get their data and to give them the core utilities that they all need in a super cost-effective, super scalable and super secure way, they’ll get a lot farther on their venture capital dollar,” says Bush. He credits a confluence of events from the record venture investment to the pandemic to changing federal rules around datablocking that are creating the perfect conditions for his grandest experiment yet.
We are making a macro bet—that could be wrong—that enough [startups] will do well enough that eventually the tide will switch and then there’ll be FOMO amongst the old school.
It’s a risky proposition to back an army of startup Davids up against entrenched Goliaths—and Bush admits as much—but it’s a gamble big name VCs are willing to get behind. Along with Andreessen Horowitz, F-Prime Capital, Maverick Ventures, Rock Health, Martin Ventures and Oxeon Investments also participated in the Series A round. As Julie Yoo, a general partner at Andreessen Horowitz, explained in a blog post, “nearly every digital health company is building much of the same underlying infrastructure over and over again from scratch, which further diverts resources away from better patient and provider experiences.” As a platform, Zus Health, she says, will “enable an entire generation of healthcare developers to spend their time building value at the clinical and experience layer” instead of worrying about all the component parts.
The seven-foot-tall Philistine standing in Bush’s way may not fall so easily, though. That’s because the economic incentives cut against big hospital systems and other entrenched interests. Think of it this way: a hospital doesn’t want its patients to go to other hospitals, because it will lose revenue. So it benefits if there’s a hassle in patients moving around—like not being able to easily access medical records.
Bush’s sling is his belief that as patients start to take more control of their own health records thanks to an explosion of apps and hardware like fitness wearables, there will be a greater expectation from patients that all their data should be readily accessible. “We are making a macro bet—that could be wrong—that enough [startups] will do well enough that eventually the tide will switch and then there’ll be FOMO amongst the old school,” says Bush. So far Cityblock Health, Dorsata, Firefly Health and Oak Street Health have signed up to build on the Zus platform.
Looking back on the tribulations that marked the end of his reign at Athenahealth, Bush is optimistic, and says that what he takes from that experience will make his next moves more powerful. “Everything is a blessing once you learn how to learn from it,” Bush says reflecting on the corporate saga. “Elliott made me completely liquid, got me onto boards of earlier stage companies and freed me up to build my effort at the healthcare internet with newer technology and a more current business model. Thank you.”