Healthcare looks profoundly different than when Epic CEO and founder Judy Faulkner started the electronic health record company in 1979.
Epic does too. It's gone from just Faulkner and two other half-time employees to a workforce of more than 14,000 at a 1,670-acre campus in Verona, Wisconsin, that includes a farm and themed buildings. In 2023, it gained market share while every other vendor saw a decrease, according to the most recent figures from market research firm KLAS Research.
Related: Epic takes aim at Oracle with newest product at HIMSS
Epic's critics argue the company has grown to the point where it has an outsized influence on the industry and customers it serves. The company is in a legal battle with digital health startup Particle Health, which alleges that Epic uses its market power to prevent products that would compete with the EHR company's payer platform.
Like nearly every other healthcare company, the EHR company is strategizing around artificial intelligence. Last week, Epic announced its latest AI tool along with launching a new product category to help health systems manage a variety of functions related to staffing, procurement and accounts payable.
“Lots of times we react to new technology that's come out from other vendors. So, when the Apple iPhone came out, we reacted to that. When graphical user interface came out, we reacted to that. When AI came out, we reacted to that,” Faulkner said. “So, I don't know what the next neat thing is that is going to show up but we'll react to it and embed it in.”
In an interview, Faulkner spoke about the role Epic has played in health system consolidation, its future product roadmap and the changing definition of interoperability.
The interview has been edited for clarity and length.
What do you think hospitals and health systems will look like in 25 to 50 years?
What we do all the time at Epic when we have a decision to make is we look at what the right decision is for 25 to 50 years in the future. What will hospitals look like? That's a hard one. What we're seeing now is that so many businesses are coming in trying to take pieces away that are the profit margin areas for the health systems. So, if the health systems are left just with the expensive things that they can't charge enough to make a positive margin on and all the things that are financially viable are taken by others, it is going to be a big problem.
We’ve seen a lot of consolidation in healthcare. Where does Epic fit into that?
What we find is that most organizations will say that when they put us in, we help them financially. Our software helps them run better and they do better financially.
We've made it easier for the big guys to be able to have one EHR system that goes throughout many, many different health systems that they own. Those customers are able to manage the data well, so that they feel like it's not just all these disparate groups acting independently. They can act as a unit, and that's important. But we've also made it effective for the small health system who buys us to still feel that it's a good financial decision to exist and remain independent.
How has the definition of interoperability changed over time?
It used to be the definition was that the information follows the patient wherever the patient goes, so the patient can have good care. Now, I don’t know that it's officially changed but it seems to be more about other companies that need data to do whatever they want to do with that data. They want Epic and other EHRs to give them the data through interoperability. It can be that they are providing healthcare capabilities, maybe not direct care to the patient, but they still need some of the data to be able to do whatever portion they're doing of healthcare. Or it can be that they want the data for totally different uses.
I don't think we're changing the definition but we see that lots of groups are saying they want the data too. Does that change the definition? I think if we go that way, we have to be very careful because the data can get into the wrong hands.
Many vendors strive to co-develop technology with you so it can be embedded in Epic. What do you say to people who argue you’re choosing the winners and losers?
We certainly want to move ahead with new technologies to come. What we've realized is if there are 20 different vendors introducing new technology, there's no way we could work with all 20. So, we’re picking a few to work with and then after a certain period of time — which isn't too long — we make what we've developed available to everybody. So, we've already done that for the AI charting. It would be just nutty for us to try to work with too many at once.
One of the next big things we want to work on is in-room communication with TVs. We can use the equipment that those vendors offer to communicate back and forth with the patient, watch for falls or anything else we’d need to alert the staff on. We’ll work with a few vendors and then make the tools available to every vendor.
Would you push back on those saying Epic is picking winners and losers?
It's hard to push back on it but we're not doing it for that purpose. We're doing it to develop a good product that can work with all of them and we can't work with all of them on day one.
Are you concerned the government could take antitrust action against Epic?
Sure, I’m concerned about antitrust because we're a large EHR company. We didn't used to be. We started with the three half-time people. I think our monthly revenue was $3,000. I think what we do is important. I think we save many lives by doing what we do.
How long do you plan to continue lead Epic's day-to-day operations?
As long as I'm helping the company and doing good stuff. I enjoy the work I do and if I'm not doing something interesting, I am bored. I also see the people who leave an interesting job and don't have something to do. That doesn't seem to be a good thing. Often, they don't live very long. So, I'd like to be doing things as long as they’re valuable to the company, to the patients, to the systems and to healthcare.
