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February 21, 2011

athenahealth/SERMO “Physician Sentiment Index” (PSI) Finds Value of Electronic Health Records Still More Potential Than Reality

As EHR Usage Increases, Disappointment in EHR Deliverables Follows In-step...

ORLANDO, FL — As EHR Usage Increases, Disappointment in EHR Deliverables Follows In-step

Most Doctors Expect to Spend Between 20-40% of Meaningful Use Bonus to Meet Requirements

Community is Skeptical of ACO Model; Pessimistic about Affordable Care Act

athenahealth, Inc. (NASDAQ: ATHN), a leading provider of web-based practice management, electronic health record (EHR), and patient communication services to medical groups and SERMO, the world’s largest online community for physicians, today released select findings from its second annual “Physician Sentiment Index” (PSI) at the HIMSS 2011 conference. Five hundred physicians surveyed expose a widening gap between the current functionality of an EHR and its ability to deliver on the most basic of the technology’s promise, despite a year’s worth of communications and government-driven adoption. Findings also indicate doctors feeling confused and skeptical about many aspects of reform, including Meaningful Use, ACOs, and its impact on their fate as independent practitioners.

“Sliding sentiment for electronic medical records is likely explained by the fact that doctors aren’t just kicking the tires any more. They are actually trying these things out in their daily work routines only to find their current form does not live up to the most basic of promises,” said Jonathan Bush, CEO and Chairman, athenahealth. “The truth is EHRs are already an X generation product and are still not close to where they need to be to bring real value to the physician. While some innovation is emerging in the industry and EHR adoption is growing, the survey shows that the vendor community has to be on the hook for making these things improve care and reduce costs the way they should.”

EHR: One Year Later, Promise and Potential Still Not Reconciled

  • Overall opinion of EHR held steady from 2010 to 2011, with 77 percent reporting a favorable view of them and 75 percent saying they believe that EHRs can improve care.
  • Compared to 2010, 7 percent fewer (64%) physicians in 2011 said they believe the financial benefits outweigh the costs and; 5 percent fewer (68%) said they believe the patient care benefits justify the financial cost.
  • Physicians are less likely to agree that EHRs can help them:
  • Reduce medical errors (from 71% in 2010 to 64% in 2011)
  • Improve efficiency (from 47% in 2010 to 42% in 2011)
  • Decrease costs (from 41% in 2010 to 37% in 2011)
  • Physicians agree that EHRs:
  • Require effort to stay current with federal requirements/incentives (71% in 2011 versus 72% in 2010)
  • Slow them down during patient exams (60% in 2011 versus 54% in 2010)
  • Don’t achieve measurable financial impact (39% in 2011 versus 33% in 2010)
  • Dr. Daniel Palestrant, CEO of SERMO added, “The survey paints a story of financial and human capital being expended on potential. And that’s insult to injury given this community is at best tepid about and at worst confounded by a litany of other acronyms being pushed at them - like MU compliance and their ability to qualify as and ACO and the impact of the ACA.”

    Relying on Consultants, Vendors to Achieve Meaningful Use; Widespread on What They Expect to Spend to be Compliant

  • Nearly all (95%) physicians plan to participate in Meaningful Use; 67 percent report being at least somewhat confident they can achieve Meaningful Use criteria.
  • Of those who plan to participate, about half say they will use consultants to meet Meaningful Use requirements; 43 percent are looking to their vendors.
  • Physicians expect to spend between 20-40 percent of their Meaningful Use payment on meeting Meaningful Use requirements; 16 percent expect to spend more than 60 percent.
  • Uncertainty One of Few Certainties in an Industry Full of Flux

  • In line with 2010, the majority of physicians believe the quality of medicine will decline in the next five years.
  • 68 percent of physicians say they are not optimistic about the future prospects for independent or small group practices, up from 62 percent in 2010.
  • One-fifth of the physician community says they do not understand the details/ implications of the Affordable Care Act.
  • Half of physicians believe the Act will be somewhat (36%) to very detrimental (14%) to the delivery of quality care.
  • Of those familiar with ACOs, 26 percent indicated a shift to the ACO model would have a negative impact on quality care; 47 percent said it would have a negative impact on the profitability of their practice.
  • Despite trends that suggest a number of challenges facing independent and small physician practices, the survey revealed at least one positive progression. A full 41 percent of physicians said they were participating in at least one pay-for-performance program.

    Full results of the second annual PSI, including physicians’ frustrations with insurance reimbursement and the role of government in healthcare will be released in March.

    About SERMO

    SERMO is the largest online physician community, where over 117,000 physicians collaborate to improve patient care. SERMO provides access to its community for clients that need fast, actionable insights directly from practicing physicians.

    About athenahealth

    athenahealth, Inc. is a leading provider of Internet-based business services for physician practices. athenahealth's service offerings are based on proprietary web-native practice management and electronic health record (EHR) software, a continuously updated payer knowledge-base, integrated back-office service operations, and automated and live patient communication services. For more information, please visit www.athenahealth.com or call (888) 652-8200.

    This press release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding the benefits of and prospective markets for athenahealth’s service offerings. These statements are neither promises nor guarantees, and are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. In particular, the risks and uncertainties include, among other things: the risk that our service offerings will not operate in the manner that we expect, due to design flaws, security breaches, or otherwise; potential interruptions or delays in our internet-based service offerings; our reliance upon third parties, such as computer hardware, software, data-hosting, and internet infrastructure providers, which reliance may result in failures or disruptions in our service offerings; errors or omissions included in our payer and clinical intelligence rules engine and database; and the evolving and complex government regulatory compliance environment in which we and our clients operate. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. athenahealth undertakes no obligation to update or revise the information contained in this press release, whether as a result of new information, future events or circumstances, or otherwise. For additional disclosure regarding these and other risks faced by athenahealth, please see the disclosure contained in our public filings with the Securities and Exchange Commission, available on the Investors section of our website at http://www.athenahealth.com and on the SEC’s website at http://www.sec.gov.

    Contacts:

    SERMO, Inc.
    Greg Shenk
    P: 617-500-2310
    E: gshenk@SERMO.com

    athenahealth, Inc.
    John Hallock (Media), 617-504-0958
    Director, Corporate Communications
    media@athenahealth.com

    athenahealth, Inc.
    Jennifer Heizer (Investors), (617) 402-1322
    Director, Investor Relations
    investorrelations@athenahealth.com