Epic and the Health Records Business

Digital transformation allowed Epic Systems to design an electronic health records (EHR) software for healthcare professionals to efficiently record and share patient information. As the company continues to grow, issues with information overload, cyber-security, and government regulation challenges its business model.

In the early 1980s, there was a national healthcare crisis in the United States. Healthcare professionals were more dedicated than ever to caring for their patients, but there was gross lack of coordination among physicians, clinics, hospitals and healthcare organizations. This led to redundancies and massive waste in all areas of healthcare and as a result healthcare cost increased exponentially. Advances in digital technology that allowed development of electronic health records (EHR) seemed to be the solution. Prior to the EHR era, healthcare professionals kept handwritten records of all interactions with patients and stored data on test results, imaging, and treatment courses in hard paper files, which made it very difficult to share information on patients. Consequently, doctors routinely repeated prior tests due to difficulty of finding information. With healthcare cost making up ~18% of GDP, this inefficiency of medical record keeping propagated throughout the entire U.S. healthcare system driving cost through the roof.

Many companies emerged with the focus of designing EHRs that will allow healthcare professionals to easily record, store, access, and share patient information efficiently in an effort to reduce cost. While many showed promise, none has been as successful as Epic Systems. Founded in 1979 by Judy Faulkner, Epic Systems is a privately held healthcare software company that aimed at solving the EHR problem in healthcare by designing software that makes healthcare professionals work more efficiently.[1,2] The company’s customer promise is to develop and supplying EHR software, systems, training, and support frameworks that allow its customers to manage their patient data.[3] Since its founding, Epic systems has grown from a small company in the Madison, Wisconsin to a multibillion dollar private company that employs over 10,000 people with new offices all over the world.[3] Presently, Epic Systems holds the medical record of 54% of patients in the United States (over 127 million people), several folds larger than its closest competitor.[4]

Epic System’s success is predicated on its simple business model of developing excellent software that their customers want; software that will help customers perform tasks more efficiently.[4] The Epic Systems operating model is to find the best and talented people all over the world and provide them with a platform to design healthcare related software that meets customers’ need.[6] Today, Epic is the EHR software used by the most prominent medical institutions in the U.S. such as Mayo Clinic, Cleveland Clinic, Johns Hopkins Hospitals and Partners Healthcare.[3]

Before Epic, healthcare professionals had idiosyncratic ways of recording patient data. With Epic, the process of recording patient data became standardized, and information readily retrievable. Epic has a built-in ability for patient information to be readily accessed in any hospital in the world. Epic also designed “Haiku”, a mobile app that allows access of patient information on a mobile device. Doctors can now review imaging findings of new patients on their phones and render diagnoses and treatment on their phones. All of these digital technological advances made Epic very successful and profitable, making Epic one of the most promising and rapidly growing healthcare IT companies in the world.[5]

Digital transformation allowed Epic Systems to deliver great value to its customers by providing an avenue for cost savings in healthcare.[8] As government regulations and healthcare reimbursement requirement evolve, however, Epic’s constant goal of modifying its software to meet the needs of its customers now threatens to make a once efficient EHR system cumbersome to use. Healthcare professionals now struggle to document simple patient encounters on Epic so as to meet regulatory and payment criteria. In trying to allow healthcare professional to capture more billable events, Epic has lost its ease of use. Doctors and nurses now spend a majority of their time interacting with Epic on a computer or mobile device and very little time actually talking to patients.[9] Another issue relates to information overload in Epic and inherent difficulties with finding patient information in a timely manner to deliver care.

Epic Systems is currently trying to address these issues by revamping the customer promise of designing good software that helps customers perform tasks efficiently. Thus, today multiple Epic employees are deployed to hospitals all over the world to see the direct impact of Epic EHR on patient care delivery. Insights from site visits continue to guide Epic Systems to design innovative products that addresses the needs of customers in ways that do not hinder proper patient care. As Epic Systems addresses these issues and continues to expand, it is unclear what role government should play given that more than half the US patient population have health records on Epic. Cyber security and protection of patient information also continues to be an issue. How will Epic Systems address these pressing challenges going forward?

 

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Reference:

[1] Freudenheim, Milt (January 14, 2012). “Digitizing Health Records, Before It Was Cool”. The New York Times.

[2] Zina Moukheiber (April, 2012), Epic Systems’ Tough Billionaire, Forbes Magazine,

[3]Akanksha Jayanthi (March 09, 2015), Epic decoded: An inside look at life and corporate culture at the center of the health IT world, Beckers Hosptial Review,

[4] Moukheiber, Zina (March 4, 2013). “Behind Epic Systems, A Low-Key Health IT Company Called InterSystems”. Forbes.

[5]Eisen, Mark (June 20, 2008). “Epic Systems: Epic Tale”. Isthmus.

[6] Glaze, Jeff (January 6, 2015). “Epic Systems draws on literature greats for its next expansion”. Wisconsin State Journal. Retrieved January 23, 2015.

[7] Glad, Jack. (August 2, 2016) “Epic EMR – EHR Review”. EHRSoftware

[8] Caldwell, Patrick (October 2015). “EPIC FAIL. Digitizing America’s medical records was supposed to help patients and save money. Why hasn’t that happened?”. Mother Jones.

[9] McBeth, Rebecca (25 February 2016). “EPR implementation led to ‘catastrophic loss of confidence'”. Digital Health Intelligence Limited

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3 thoughts on “Epic and the Health Records Business

  1. Very interesting article about the use of EMRs within hospitals. My experience with physicians using EMRs is very similar to the problems outlined here. It often takes many minutes to fill-in a patient’s note, which in essence is minutes that a doctor is not spending with the patient. How hospitals battle the tension of maximizing patient/physician facetime with the need for clear, concise, and accurate information will be of most importance going forward.
    I also am curious of how the different EMRs will communicate in the future. Currently, EPIC has nearly 50% marketshare but there are a number of other large players, including AllScripts and Cerner. It will be interesting to see how these competitors work together in the future as they all have the same ultimate goal, to help the patient.

  2. Thanks for an interesting article. I’m curious as more EMRs enter this space, what Epic will do to maintain its advantage over its competitors? I would think that getting into big data and analytics tools for population health management would make sense as we transition to a more value-based healthcare system and capitation models. I did some research and it looks like Epic has built out a software module called Healthy Planet that helps healthcare organizations manage patient populations giving them the tools necessary to coordinate care delivery, monitor quality and cost (http://www.epic.com/software#PopulationHealth). Precision medicine is another area that I think makes sense for Epic to explore. Because they have so much data, they should be able to derive insights that could be used by healthcare practitioners to better treat diseases. Finally, I’m curious on what the software solution is to fix the patient-doctor interaction given the amount of time spent on EMR documentation. Is it some combination of artificial intelligence and voice recognition software that can automatically record the appropriate notes and codes necessary for billing?

  3. The Electronic Health Records (EHR) segment has garnered much attention from private equity lately. In fact, a simple google search of the topic brings up many deals that have transacted over the past five years. While your article addresses the many interested points around EHR and why this technology is poised for growth in the future, I would be interested in hearing your thoughts around the privacy of patients’ healthcare records and how this information is protected and disseminated. What can healthcare providers do to ensure a safe computing environment with such sensitive data that is growing in volume on a daily basis? Do the Health Insurance Privacy and Accountability Act (HIPPA) guidelines go far enough to protect the data? Are they too stringent for healthcare providers to make use of the information in a useful way? Looking forward to having a discussion on how we can mitigate the challenges around information overload, cyber-security and increased regulations. Certainly the next administration will be in a position to set precedent in this burgeoning niche.

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