AthenaHealth Earnings Call Nuggets: Utilization Trends, Bookings Goal
Michael Cherny – ISI Group LLC: So I just wanted to dig a little bit into the utilization comment on the prepared remarks; it seems like the trend softened a little bit versus where you were in the first half of the year. Other healthcare companies were seeing definitely weaker commentary than you would had and I think that was truth throughout the rest of the year. Could you talk a little bit about any of the pockets of why you may have seen utilization flowing and then any color or thoughts you have around utilization for 4Q or maybe if it’s not too early – kind of some early thoughts where you have seen in October so far?
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Timothy M. Adams – SVP and CFO: You are right. In the first half of the year we look at the volume of claims per doc on the same store basis and the collection per claim and in Q1 and Q2 we had favorable trends on a year-over-year basis. I think we said it was up modestly. Others in the healthcare world were reporting that it wasn’t so favorable in the first half of the year, but we were bucking that trend and we’re ahead. We took that optimism from the first half of the year when we tightened the guidance range. We included that by tightening the lower-end and we just didn’t see it in the third quarter. It was barely up on a year-over-year basis kind of across the board when we look at our client base. It’s really hard to call out any pocket in particular, but it was a positive tailwind first half of the year, flattish, barely up in the third quarter. So I’d say, I think we need to be a little more cautious as we go into Q4 to where that really could play out.
Michael Cherny – ISI Group LLC: Then just on the doc add number, obviously a very strong result across all three business lines. Clearly, 3Q is typically seasonally strong. Can you talk a little bit about with regards to the doc adds, what came from there broadly the existing customer base for some of the new deals you are ramping and did you see that same kind of approach of the new residents coming online in the summer and any kind of breakdown you can give will be greatly appreciated.
Michael Cherny – ISI Group LLC: So Michael, you are right. 2,000 doc adds in the quarter, record quarter for us, we were thrilled by that. Probably about two-thirds of that did come from new deals, a third coming from of add-ons to existing deals. You do get a little bit of the residency effect that happens in Q3 every year. Two big go-lives in the quarter, MedExpress is fully up and running. That’s one of the big enterprise deals that we announced in Q4 last year, 250 docs, 460 providers ProMedica, another one of those big accounts is up and running nicely probably about a third of that account is up and running and live. There was nothing from Health Management in the quarter. They are slated to start to go live roughly in December of this year. So, its 2,000 doc adds. We are excited about that and it doesn’t include one of our new big wins that we had just back in Q2, but that’s going to get started in December and work its way through probably the first half of 2013.
Jamie Stockton – Wells Fargo: I guess maybe the progress toward the bookings goal during the quarter is going to be a big focus. If you could give us some sense for how those numbers trended in 2011 or whether or not there was a quarter where there was a big deviation like there was this quarter?
Jonathan Bush – CEO, President and Chairman: Sure Jamie, and I would just say in honor of our response to the (pressure of) share, all of your scorecard results injury year with the investment community are welcome to our nightmare. We sweat this throughout every year over the last 15 and in fact Q3 is always our worst. On average over the last four years it’s been – we’ve been at 78% in Q3. Every year we trim down the goal, so that we’ll look better or so that we’ll be more accurately forecasting the year, but every year August and sales meeting and whatever, summer vacations hit us, and so far most years we squeak it back out at the end of the year. Many, many, many folks in the traditional enterprise software space get a ridiculous amount of their bookings in Q4 and we are not quite that bad, but not a total exception. I’ll give you a small example. We’re at 86% of the goal. One of the ones that we were sure would be in ended up trickling over the line. It made it into the script; Palmetto. With Palmetto we’re at 96 – I’m sorry, 90 instead of 86, so a little less painful of a look, but this is exactly what goes on every year and you’re absolutely right, it’s not new, it’s still terrifying. We are some (type A) insecure folks and it’s always a good swat in the jaw to see that (gaping monks) staring at us less than three months away.
Jamie Stockton – Wells Fargo: Then maybe Jonathan if you could just touch on win rate, I think that’s the other thing that’s probably going to be a big question for people whether or not there’s been any change in the (competitive) dynamic?
Jonathan Bush – CEO, President and Chairman: Yeah, so the one megatrend that I think is – mega, sort of – maybe mega in our little world is kind of a two-year trend or one-year trend that we are seeing emerge is the elongation and sort of increasing stuttering of the independent group market. So, what’s going on is in many markets these big academics are buying a huge copy of Epic and going out – or Cerner or whoever, but the examples that I’ve heard about our Epic, because they’ve spent so much they’ve convinced themselves that the way they are going to pay for it is they’re going to get all these independent doctors to use it. So they go out and sort of do some Bush Doctrine saying, in three years we’re going to be live with this thing, it’s going to slice and dice and bring world peace, and you’re either going to be on it or not allowed in our hospitals. Now, practically speaking that is not going to happen, right. These guys have the patients. The hospitals will need patients more than ever. The idea of making everybody in the entire marketplace get on to one you system that systematically slows you down. If you are in independent practice it’s just not going to happen, but when doctors hear this, you’ll be cut out of our ACO or you are going to not be clinically integrated with us if you’re not on this thing, they freeze up and they say gee how do we respond to that and it causes our sales guys who’s only talking about improving patient flow, improving collections, improving pay for performance they’re not talking about being cut out or included in some special network in that market and they lose the advantage. We’re working very hard with the fair number of these independent practices to build a pretty impressive set of clinical integration. It’s a very, probably the top priority for next year to start rolling it out the clinical integration that’s enabled by coordinator and the interfacing capability of our last mile team. So the doctors know that they can be on best system for them and feel clinically integrate. It’s factually not true that you have to be on one piece of software to be clinically integrated. I believe that all of the banks in America may not be on one instance of one software and yet all of us can stumble up to any cash machine we want and exchange information. It’s a ludicrous pre-Internet idea that that’s true, but that is affecting – it’s making our sales cycle 20% longer and it’s making our close rate a couple percent lower. I think it’s even affecting our upper funnel where people say, yeah, it’d like to talk to you but not yet. We do feel how things sort out in the market before we meet with you, so I’d say that’s probably our biggest challenge going into next year and our member were just a cork on the ocean with 5% of the docs and trying to get to 7% and we’re needing to re-create a mega trend in order to hit our number but you tapped into the center of this strategic rift, the fundamental unintended adverse consequences of the high-tech act is the idea of hospitals creating monopoly. Not all hospitals are doing it. Most hospitals are trying to earn their business, but some are going the other way and we will need to fight this.
A Closer Look: AthenaHealth Earnings Cheat Sheet>>