Eschew the monumental. Shun the Epic. All the guys who can paint great big pictures can paint great small ones.
On a cool day in Verona, Wisconsin, in September 2014, the town’s population had a bimodal distribution of a type well known on autumn Saturdays in small midwestern college towns with powerhouse football teams. But Verona has no college, and no football team. While the 12,000 residents of Verona went about their business, another 12,000 out-of-town visitors packed the “Deep Space” auditorium on the 811-acre “Intergalactic Headquarters” of the town’s dominant employer, Epic.
Like a slightly cheesy version of the glitzy users’ meetings thrown by Apple and Salesforce, the visitors—all Epic customers—were there mostly to attend some of the conference’s 750 sessions on Epic’s products and plans. “Little Cow Pokes: Optimizing Pediatric SmartSets and Immunizations” was the title of one session. “Old MacDonald Had a Farm … of Remote Coders” was another. The classes were scattered around the whimsical campus, adored by many Epic employees for its themed buildings (there’s one called Heaven and another called Barn; an “Olde English”–themed building is under construction), babbling brook, statues of the Cat in the Hat and a blue neon cow, treehouse-cum-conference room, and two-story spiral tube slide. But they also came to hear Judy.
Judy Faulkner, the company’s founder, CEO, and major shareholder, walked onto the auditorium stage to rousing applause. In past years, she had come dressed as Superwoman, a Harley-riding biker dudette, and a Harry Potter wizard. But, in keeping with the 2014 meeting’s theme of “Down on the Farm,” this year Judy (like Beyoncé and Madonna, pretty much everybody calls Judy by her first name), age 71, was dressed in a red plaid shirt, overalls, leather work boots, and a green and white John Deere cap. She was accompanied on stage by a pony named Charm.
Charmed would be an apt way to describe the history of Faulkner’s company, now the unlikely titan sitting atop efforts to digitize the $3 trillion U.S. healthcare system. Her humble start is the stuff of legends. After completing her master’s degree at the University of Wisconsin, Faulkner was hired in 1979 by the school’s psychiatry department to write a program to computerize its records and track its patients. She began with three part-time employees, who sat at used desks in the basement of an off-campus apartment building, working on a bulky Data General computer whose two 50-megabyte spinning disk drives sounded like a clothes dryer tossing around a pair of sneakers. “You couldn’t touch it, or the data got messed up,” she told the New York Times in 2012.
Since then, Faulkner has proved to be a shrewd business strategist, making a series of choices that seemed unusual, if not suicidal, but have all paid off. Here are just a few: Epic programs in a version of a 46-year-old language called MUMPS.32 The company does no marketing; in fact, Epic invites customers to buy its system and tells others (basically any hospital with less than 250 beds) that it is not interested in their business. Despite many entreaties over the years, the company remains privately held. It has never acquired another company and has never accepted outside capital. It carries no debt.
And then there’s the decision to build a technology powerhouse in the heart of Wisconsin farm country—I passed a “Tractor Crossing” road sign a few hundred yards from the company’s front gate, which sits 2,100 miles from Stanford’s campus and 1,100 miles from MIT’s. Faulkner’s motto is, “Do good, have fun, make money,” and she has succeeded in all three. Forbes estimates her net worth at about $2.3 billion. If Epic ever did go public, she’d probably become even wealthier.
That Faulkner hasn’t taken her company public is in keeping with Epic’s philosophy of maintaining control—of its destiny, its intellectual property, the programs that link to its software, and its relationships with customers. But one can control only so much for so long, and today Epic is fighting a major image problem, often finding itself portrayed as both a behemoth and the embodiment of all that is wrong with health IT. The indictment goes like this: the federal government created a $30 billion “giveaway”; Epic was lucky enough to have the best system at the time of the “handouts,” but only because the others were so bad (faint praise embodied in the quip that Epic’s software is “the Cream of the Crap”); the HITECH money and subsequent regulations cemented Epic’s “monopolistic position” and locked out the entrepreneurs and “disrupters”; and Epic created a “walled garden” that blocks the open exchange of information that the healthcare system so desperately needs.
Epic’s critics have rallied some influential advocates, including a few in Washington, DC. In July 2014, representative Phil Gingrey held hearings under the banner, “Is the government getting its money’s worth?” “It may be time for the [Energy and Commerce] committee to take a closer look at the practices of vendor companies in this space, given the possibility that fraud may be perpetrated on the American taxpayer,” said the Georgia Republican. No one doubted which company he was referring to.
By 2014, Epic, while still raking in cash and business, had been forced out of its shell. The company famously eschews self-promotion, yet began a quiet PR campaign. There were no gauzy “Epic saved my daughter’s life” television ads set to swelling music. But company leaders did point me to several promotional videos created by its client hospitals, touting things like patient portals and hospital-based monitoring systems. Although CEO Faulkner remains intensely private (“I’m hugely introverted, not atypical of math majors,” she said in a 2013 interview, one of only a handful on record), Epic’s president, Carl Dvorak, took to the stump and has become a regular on the healthcare conference circuit.
Dvorak, a balding, sandy-haired engineer who has been with the company since 1987, told me that until relatively recently, he was so naive about the legislative process that he watched a Schoolhouse Rock! video to refresh his memory about how a bill becomes a law (“I’m stuck in committee and I sit here and wait; While a few key congressmen discuss and debate,” sings a cartoon character named Bill). In 2014, the company hired its first Washington lobbyist, the brother of George W. Bush’s chief of staff, Andrew Card, to “educate members of Congress on the interoperability of Epic’s healthcare information technology.”
Even Charm went off script, pausing to poop on the stage of the Deep Space auditorium during Faulkner’s 2014 appearance.
That Epic would find itself labeled a monopoly is in itself an extraordinary turn of events. In 2000, after 21 years in business, the company had only 400 employees and 73 clients, and did not appear on a list of the top 20 hospital EHR vendors. Its big break came in 2003, when the 8 million–member Kaiser Permanente system selected Epic over two far better known competitors, IBM and Cerner. The cost to build Kaiser’s electronic health record: $4 billion.
Today, Epic has 8,100 employees, 315 clients, and yearly revenues of approximately $2 billion. The system is now deployed in 9 of the US News & World Report’s “Top 10” hospitals. In 2014, the company estimated that 173 million people (54 percent of the U.S. population) had at least some medical information in an Epic electronic record.
Faulkner’s vision, built on several central tenets, has been vindicated many times over. The first principle was that the winning EHR vendor would be the one that solved the most problems for its customers. While Apple’s App Store has made a modular environment seem feasible and even desirable, most healthcare decision makers want a single product that does everything they need right out of the box (physician notes, nursing notes, drug ordering and dispensing, billing, compliance, and population health) and does those things everywhere, from the newborn nursery to the urology clinic to the ICU. Said David Bates, chief quality officer at Boston’s Brigham & Women’s Hospital and a national expert in health IT, “If you make a big matrix of all the various things that you want as an organization, Epic covers many more of the boxes than others.” When it was choosing which EHR system to purchase, Partners HealthCare (which includes Brigham, Massachusetts General, and several other Boston-area hospitals and clinics) created just such a matrix, and Epic’s system covered more than 90 percent of the boxes. The nearest competitor covered just 55 percent. Choosing Epic, said Bates, “was not a close decision.” Partners’ investment in its new EHR system will total about $1 billion.33
Second, while Epic’s software has been criticized for its lack of interoperability, most healthcare leaders don’t stay up at night worrying about that. Don’t get me wrong: they care deeply about moving information around; it’s a core rationale for EHRs in the first place. But their definition of “around” is not everywhere. Rather, they want a seamless flow of information around all the buildings they own (within the hospital, between the hospital and their clinics, that sort of thing). They also want interoperability between their system and an outside laboratory they use, their system and Aetna’s claims department, and their system and the local Walgreens.
And they do care—up to a point—about connecting to the patient. But this is where things get nuanced, because the information the hospital CIO wants to make available to the patient is finely calibrated: enough to make the patient happy (scheduling appointments, refilling medications, e-mailing her doctor), but not so much as to risk the franchise. If you come to UCSF for a kidney transplant, it’s good for business if you also get your flu shots and primary care from us. If you go to see that famous Sloan Kettering oncologist for a second opinion, the cancer hospital would also like to administer your chemotherapy, even though there is absolutely nothing special about its version of the medication, and you could probably get it cheaper at a clinic down the road.
Just think about it: if a patient can go online and shop around for the cheapest CT scan or colonoscopy (“Hey, Groupon’s offering a $75 MRI at the mall today!”), this creates a problem for the nation’s healthcare Meccas, which count on the profits from these activities to pay the bills.
One way to prevent such shopping around is to be sure the hospital’s IT system doesn’t connect to outsiders that the hospital views as competition. In fact, one technique that hospitals use with their Epic system is to buy it and offer nearby clinics free or subsidized access to it, but only if they admit their patients to that hospital or are otherwise part of its network. Epic implicitly encourages this by not selling its system directly to small practices. A clinic that chooses to stay outside the major medical center’s orbit may find its staff standing at the fax machine when it needs to exchange information with that hospital.
Third, Faulkner was patient. While other companies were busy merging with one another in order to grow, or futzing around with new product lines, Epic remained confident that, someday, the market for electronic health records would take off. Faulker’s employees focused on building a solid system that would solve more problems, and solve them better, than their competitors’ systems. It worked. Fueled by superior customer ratings and word of mouth, Epic’s client base grew slowly and steadily. “We were making a healthy profit before HITECH,” said Dvorak, showing me a curve of customer growth from 2000 to 2014. While the graph depicted an unmistakable uptick after 2010, it also illustrated steady year-over-year increases before the federal incentives kicked in.
Point taken. But it is equally true that the EHR business represented a sluggish corner of the healthcare economy before 2010, so nobody but insiders really noticed Epic, or cared very much about it. The signing of the HITECH Act instantly changed that, and Epic was ready—if not for the politics and the attention, then at least for the business. “The reason that Epic got so much of the market is that its product is simply better,” said David Bates. I agree. To frame Epic as somehow having orchestrated HITECH—for its dominance in the past few years to be portrayed, as it sometimes is, as a massive conspiracy launched from the Wisconsin farmlands—is just plain silly. Given its 30-year history of quiet competence, it would also represent a sleeper cell story of, well, epic proportions.
My own hospital’s tale is relatively typical. UCSF Medical Center originally installed a system made by a Vermont company named IDX, which struggled for survival and was ultimately gobbled up by General Electric in 2006, as the world’s largest technology company tried to establish a beachhead in the EHR business. After being dissatisfied with that system (in her 2014 speech at the Epic users’ meeting, Faulkner announced that Epic had bought GE and changed its name to “General Epic”—“Just kidding,” she added quickly), we needed to decide which EHR to buy. Having made a costly error with our first purchase, we were in no mood to take a big risk.
Like Partners, we found the decision to go with Epic to be relatively easy, on the merits. Moreover, our leaders were also impressed by Epic’s sales job—or, more precisely, the lack of one. “They were very honest about what they had, and didn’t have,” UCSF’s chief operating officer, Ken Jones, told Forbes in 2012. “Their attitude was more like, ‘You’re embarking on this big effort, and we want to make sure that you’re serious about this, because if you’re not successful, then it’s not good for us.’”
There was one more plus for us, and it illustrates how surprisingly subtle the issue of interoperability can be. The combination of Epic’s enormous market share and the fact that sharing records with other Epic sites is relatively easy (Epic calls this “Care Everywhere,” as distinguished from its system of sharing records with non-Epic sites, which it calls, somewhat dismissively, “Care Elsewhere”) meant that the choice to install Epic did solve a significant portion of our interoperability problems, even for patients coming from or going to other facilities. In California, four of the five University of California medical centers, as well as Stanford, Cedars-Sinai, the large Sutter network of hospitals, and, of course, the massive Kaiser Permanente system, are all on Epic.
This kind of sharing is growing rapidly. Nationwide, in the month of August 2014, there were 5 million clinical records exchanged between Epic systems at different sites, and 500,000 records exchanged between Epic and non-Epic systems. It’s no surprise that most of the people who excoriate Epic for being “closed” are outsiders who want in (while some media reports claim that Epic charges exorbitant fees to connect to non-Epic sites, I found no evidence of this in my research) or vendors that are trying to sell their own systems. While everyone endorses the ultimate goal of universal sharing, Epic’s clients today actually enjoy an unmatched degree of connectedness.
You won’t be surprised to learn that Epic’s leaders see the assault on their company for being “closed” as terribly unfair, or at best only a partial truth. What is true is that Epic is highly selective about which third-party vendor products it links to: only those that its customers want. “Developers have to work through a customer,” Faulkner said in 2013. “We don’t let anyone write on top of our platform, come read our code, and study our software. I worry about intellectual property at that point.”
The company also worries about the safety implications of trying to cobble together mismatched parts, particularly in complex clinical environments like hospitals. In fact, while Epic is open to connecting to a variety of third-party laboratory, radiology, scheduling, and billing systems, Dvorak said that the company is “religious” about not mixing and matching components in areas where integration is critical to safety, such as between the pharmacy inventory and the medication ordering systems. “The links are incredibly fragile, and it’s dangerous if you don’t get them right,” said Dvorak. “We’ve learned this the hard way.”
Dvorak is blunt in his defense of the company’s openness. “This whole closed business rubbish … I grow weary of it,” he told me. He pointed to Epic’s open APIs (application programming interfaces, the bits of code that allow for connections to other software products; as I discussed in Chapter 21, standardized APIs now form the heart of the government’s strategy to promote interoperability). At the 2014 users’ meeting, Epic launched its “Open Epic” initiative, with its library of hundreds of open APIs and of third-party products that already link to them.34
Of course, Epic has a stake in protecting its intellectual property. But so do its competitors. “No one publishes their source code. That’s all we have,” Dvorak said. He attributed much of the criticism of Epic (which has been picked up by media outlets ranging from the New York Times to Modern Healthcare) to a smear campaign launched by competitors, and added, “It’s hilarious that it’s misinformation put forward by people who do exactly the same thing we do. They fail to mention that when they preach their misinformation.”
Dvorak also sees the fingerprints of Epic’s competitors on Congress’s newfound interest in interoperability. When I asked why other health IT companies might want to hammer Epic on “openness,” his answer was immediate: Epic and IBM have teamed up to bid for a 10-year, $11 billion contract to provide a single EHR to all Department of Defense facilities, and three other teams are vying for the contract.
If Judy Faulkner represents the face of the last generation’s health IT leaders, Jonathan Bush is working his tush off to be the face of this generation. It would be hard to find two more different human beings. Faulkner, a self-described nerd with a master’s degree in computer engineering from the University of Wisconsin, grew up in southern New Jersey, the daughter of a pharmacist dad and a social activist mom (her mother’s certificate for her work with Physicians for Social Responsibility, the group that shared the 1985 Nobel Peace Prize, hangs in Epic’s headquarters). Faulkner’s husband is a pediatrician who still sees kids in a community clinic in Madison. Don’t look for either of them at the latest Daniel Boulud restaurant opening or black tie charity ball. By all reports, they happily live a quiet Wisconsin life, well hidden from the glare of the tabloids.
Jonathan Bush, age 45, is the cofounder and CEO of athenahealth, a rapidly growing Web-based EHR company. Bush is a Harvard MBA who grew up on a tree-lined street on Manhattan’s Upper East Side and summered in Kennebunkport, Maine. He looks a bit like a young Michael J. Fox, except that when you’re sitting with him, there is something else vaguely familiar about the smile, the squint in the eyes. It’s a look you know you’ve seen somewhere before.
The mantra of Jonathan Bush’s extended family was to “use power to help people.” The family, as it happens, includes an uncle who was the 41st President of the United States and a cousin who was the 43rd. (On the lighter side, his brother Billy is the host of television’s Access Hollywood.) “I mean, can you imagine being around the table at the Bush family’s Thanksgiving?” he once said in an interview. “‘So what have you done?’”
Then there is the style. While Judy Faulkner has the trademark awkward bearing and speech of a techie (albeit, to her credit, one willing to parade on stage in costume once a year in front of thousands of people), Jonathan Bush is … well, see for yourself.
On the HITECH Act: “I call it the Sunny von Bülow bill. These companies [by which he means the legacy vendors like Epic and Cerner] were ready to go out of business, and were suddenly given a new lease on life.” His other nickname for HITECH: “Cash for clunkers.”
And how about this, on how athena helps its client physicians: “There remains an ocean of shit work that caregivers hate and suck at.”
Or this: “I reached the conclusion not long ago that anger, whether white hot or smoldering, is a fundamental fuel for entrepreneurs… . I realized that during many of my most productive stretches, I was seething.”
Before Jonathan Bush entered the world of digital health, it was a relatively clubby place, the competition among vendors appreciable but genteel. The culture was more collegial than cutthroat, more Wisconsin than Wall Street.
Afterward, it was different.
I met Jonathan Bush on a bright autumn day at his company’s headquarters, an open-aired, painted brick restored factory building a few miles outside Boston. Crossing the street to the company cafeteria, he exchanged greetings with everybody, from programmers to security guards, his ADD and his charisma on equal display. At lunch (for him, leftover lobster in a Tupperware container), he spoke a mile a minute, barely chewing his food, sometimes spitting as he talked, his voice booming off the walls of the eatery’s high ceilings when he emphasized a point. Despite his volume and his volubility, few of the young employees within earshot even turned around. I had the sense that they had seen this con brio performance before.
Athenahealth’s story is every bit as remarkable as Epic’s, but it bears the unmistakable imprint of today’s generation, with its new way of thinking about technology and its Game On! sensibility. Said Brandon Hull, a venture capitalist who made an early investment in athena: “Epic is a wonderful company, with incredible solutions, but ultimately is on the wrong side of history. Every other American vertical market is migrating away from centralized, client-server, hub-and-spoke architecture toward distributed, SaaS-based applications and open architecture.” This is techno-speak for the difference between using a suite of the old Microsoft Office programs (all of which lived on physical servers in your company’s closets and required lots of training, legions of on-site IT staff, and insertion of new disks for program upgrades) to the modern cloud-based architecture (software as a service, or SaaS) of products like Gmail and Dropbox.
After stints as a New Orleans EMT, an army medic, and a Booz Allen consultant (“I was a misfit as a consultant,” he said. “I couldn’t even spell well”), in 1997, Bush and Todd Park,35 a fellow consultant, launched a birthing center in San Diego (“we would be the Starbucks of obstetrics, a no-nonsense moneymaker that’s warm on the outside and knows the customers’ needs, tastes, and phobias,” he wrote in 2014). They hoped that a combination of terrific customer service and low prices, partly achieved by using midwives instead of obstetricians, would attract a flood of patients and ultimately lead to a national chain. But they were soon hemorrhaging money. They attributed many of their troubles to their failure to master the arcane billing rules that insurance companies used to delay or deny payments.
Frustrated, Bush and Park wrote a software program to help them win their battles with the insurers by anticipating the roadblocks and proactively addressing them. The program worked beautifully; it didn’t dawn on them until later that they had stumbled into a far better business: medical billing. “It’s awfully hard to imagine solving a problem for everyone else, when that very problem appears utterly mystifying (and is in the process of grounding [sic] your business into fine and pungent dust),” Bush wrote in his 2014 book, Where Does It Hurt? Athena’s Web-based billing service became a hit among doctors, and before long it had become a thriving business on its own. In 2006, Bush and Park decided that as long as they were processing information for physicians’ offices, they might as well add on a system for keeping medical records. Athenahealth was born.
Bush, like his investor Hull, makes a point of telling me that “Epic is a great company.” Yet it’s clear that there is no love lost between the athena leaders and their Wisconsin-based rivals—he means to disrupt Epic, the entire health IT sector, and, indeed, the entire healthcare system. To these ends, he also has it in for the big academic medical centers, which, in his infinitely quotable way, he likens to duchies in middle Europe struggling to hold onto a dying business model by locking down the data and the villagers. So the fact that Epic and the big hospitals are often in cahoots … well, it makes his blood boil.
And, as if the marriage between the big hospitals and the Epics of the world weren’t bad enough, along comes the government to toss in a bunch of dumb rules. That does it—now we’ve hit the Jonathan Bush Trifecta of Outrage. “The best thing to do at this point would be to make it as easy as possible for new entrants to come into the system and disrupt these guys—clean their clock, kill them, or at least force them to change,” he wrote, these guys being both the legacy IT vendors and the academic medical centers. But that’s not what’s happening, said Bush. Instead, the government produces cumbersome regulations that discourage the newcomers, who don’t have lawyers or lobbyists, from entering the market. “So instead of making bad incumbents vulnerable, the government leaves them fat, lame, and stupid … and untouchable.” It is no surprise that Clay Christensen, the patron saint of disruptive innovation, wrote the preface to Bush’s book.
While Bush has a vested interest in railing about vendor lock (though it’s worth noting that athenahealth also feasted on the HITECH incentives), his point is legitimate. Having one company control so much of a crucial market is problematic, particularly when it is so terribly complicated and expensive to switch systems if you’re unhappy.
Jacob Reider, deputy director of the Office of the National Coordinator for Health IT, told me that ONC was sensitive to the risk of vendor lock when it crafted HITECH and Meaningful Use. He conceded, though, that his office didn’t crack this particular nut. “‘Watch out for the little guy’ was actually one of ONC’s guiding principles when Blumenthal and Mostashari were here,” he said. “The intent was there. What happened, of course, was the opposite.”
Every year, Jonathan Bush holds his own version of a users’ conference, and he, like Judy Faulkner, dresses up for it. Its tone, though, is different from the one in Wisconsin. The meeting is held off the coast of Maine, and Bush calls it “More Disruption, Please.” Its goal is to bring together healthcare entrepreneurs, investors, and other “brilliant people coming up with breakthrough ideas.” A few years ago, Bush came dressed in a loincloth and a pockmarked T-shirt, a fake bushy beard on his face and a pike in his hand. His caveman getup was designed to make a point: “Primitive apps are OK. In fact, they can change the world.” His hope is that such apps will be written around an athena standard, with the company ultimately becoming the “health information backbone.”
What Jonathan Bush wants is far more revolutionary than simply a change in the Meaningful Use regulations. He wants an unfettered marketplace for healthcare, in which consumers have the quality and cost information they need to make wise choices, and the copays that prompt them to shop with gusto. Bush believes that in that kind of market, the big, lazy, and overpriced incumbents (whether Epic or its hospital customers) would be forced to adapt or die. Then, the athenas of the world—nimble, modern, cloud-based, and linking to all manner of helpful apps—would clean up.
I asked him whether he thinks that Epic might ultimately become more open, particularly as pressure grows from patients, competitors, and the government. “I don’t know whether they’ll be able to reinvent their DNA fast enough,” he said, “especially with Judy in her seventies. It’s a very monolithic culture, very Judy-centric.”
After spending a full day at Epic headquarters and five hours with Jonathan Bush and his top lieutenants, I felt a bit like a judge listening to two very savvy attorneys plead their case. Both Epic and athena are justifiably proud of their products and their people, and both defend their worldview with great passion and (particularly in athena’s case) no shortage of hyperbole. Did I really need to choose sides?
For now, I think the answer is no—the world is plenty big enough for the two to coexist (along with a few dozen other EHR companies). Athena does a splendid job serving small office-based practices, where its cloud-based architecture and openness to a multitude of apps makes sense. Its EHR interface is simple, elegant, and standardized. Engineers in Boston can monitor the clicks of thousands of physicians and quickly change the system when they spot a problem. After the Ebola virus first appeared in Texas, athena revised its patient intake checklist to include appropriate travel questions, literally overnight.36
But building an EHR for a small office practice is a far less complex task than doing so for a huge hospital. It’s a bit ironic that Bush rails against full-service hospitals (calling them “do-it-all department stores”) for not focusing on a narrow core business (academic centers, he believes, should just do high-end complex care, and leave everything else to others). Yet, in trying to build a do-it-all EHR rather than sticking to the stuff his company is good at (serving the needs of office-based physicians), he is doing precisely the same thing.
In fact, although Bush talks as if he’s ready to lace up his gloves and take Epic on, as of late 2014 his company didn’t yet have a viable hospital electronic health record product. Speaking in March of that year, athena’s CFO, Timothy Adams, noted that athena had two components of a hospital EHR: a billing system and a patient record. But, he admitted, when it came to all the modules that make up a comprehensive hospital system—the nurse rounding station, lab interfaces, bed management modules, nutrition, pharmacy, and “30 other modules out there”—well, “we don’t have those.” In other words, athena isn’t remotely close to being able to replace the inpatient functionality of an Epic or a Cerner.37 “Some day, if Jonathan is successful, he’ll face some of our problems,” said a nettled Dvorak, clearly tired of this particular fly buzzing around his face.
I have little confidence that a 500-bed teaching hospital—the kind that performs transplant surgery, cares for premature infants, and manages critically ill patients in ICUs—is going to be well served by linking to a stream of free-for-all products created by a newly unleashed universe of app developers high on Red Bull and “More Disruption, Please” pep talks. As I’ll discuss in the next chapter, I desperately want to see entrepreneurs in the healthcare space, but, at least for now, I want their inventions to focus on handling simpler problems, those lacking the tight interdependencies and life-and-death consequences of the hospital.
Don Berwick, former head of Medicare and founder of the Institute for Healthcare Improvement, once described a thought experiment that captures the importance of integration. Imagine, he said, that you’re trying to assemble the world’s best car by using the best parts. You’d connect the engine of a Ferrari, the brakes of a Porsche, the suspension of a BMW, and the body of a Volvo. “What we’d get, of course, is nothing close to a great car,” he said. “We’d get a pile of very expensive junk.”
Everybody chanting “Open! Open!” points to the iPhone, but if you think about it, Apple is extraordinarily closed (or at least brutally prescriptive) about who and what plugs into its system. The company has created the standard, and nobody can just join in and start “disrupting.” That is why your apps work so well. Epic is trying to do the same thing as it gradually opens up to third-party programs. That’s what I want in my hospital, at least for the foreseeable future.
Does this mean that the government (or Jonathan Bush, for that matter) should just leave Epic be? Of course not. Epic and all the other vendors and providers need to be pushed toward a common standard that supports sharing, accompanied by a set of incentives and penalties to promote total connectivity. Patients deserve that. One interface that is long overdue: it should be easy for physicians to choose an office-based and relatively inexpensive EHR like athena and have it link up to their hospital’s Epic system, or any of the equivalent inpatient products. Today, it is not.
Whether the winning model will be a cloud-based model like athena’s or Epic’s more traditional architecture is not, in the end, terribly important. The market and the state of technology will determine the optimal specs. What is important is that we don’t jump too quickly onto the “open” bandwagon at the cost of the kinds of integration that, at least today, we need if we are to manage complex and vulnerable patients. Let athena be athena, and let Epic be Epic. Then, within reason, let the market decide on the better solution.
Despite all the pressure that Epic finds itself under, the company may yet get the last laugh. Being thwacked by the media for being “closed” is unpleasant, and nobody wants to be publicly excoriated at a congressional hearing. But Epic sales remain brisk, and, at least in its core market, the company continues to receive a steady stream of new customers who are dissatisfied with their current EHRs.
Because he runs a publicly traded company, Jonathan Bush is subject to a different kind of pressure than Epic is. In May 2014, activist investor David Einhorn, the billionaire CEO of Greenlight Capital, went after both Bush and athena in a speech at a large investor conference.
After observing that athena had an outlandish price/earnings ratio, had failed to meet several financial performance expectations, and faces a series of major business challenges in coming years (the loss of the HITECH money and the lack of a viable inpatient system, to name a couple), Einhorn predicted that athena’s stock would tumble by 80 percent in relatively short order, in a classic bursting of a Wall Street “bubble.” He then asked, rhetorically, what could possibly explain athena’s current stock price, which seemed to defy the laws of economic gravity.
“It would take a superhero,” he said, and a picture of Jonathan Bush flashed on his screen. This was not a compliment. This slide was rapidly followed by a series of videos that displayed a smorgasbord of unflattering, histrionic, and sometimes buffoonish Bush interviews and stage appearances. In one particularly damning mash-up, Bush slings around virtually every Internet buzz-term:
“creating network effect, creating an Airbnb.”
“a little bit of Facebook.”
“it’s a little bit like Salesforce.com, but we do more work.”
“athenahealth is a cloud-based service—we sell results. Amazon has great software, athena has great software; Amazon sells stories, we sell paid claims, settled appointments, filed claims.”
Einhorn then cued another clip, this one of the King of Market Hype, Jim Cramer, host of CNBC’s Mad Money. “Even before Marc Benioff [founder of Salesforce and the person generally credited with popularizing the idea of cloud-based commerce] knew what a cloud was,” said Cramer, “Jonathan Bush did—you can say that he invented the damn thing.” Predictably, Einhorn followed this with an SAT-like analogy: Jonathan Bush is to the cloud as Al Gore is to the Internet.
Einhorn’s audience was reportedly in stitches, but the message was clear and serious: Bush is a hoot to watch, but he and his company might be more polish than shoe, at least when it comes to the things that Wall Street cares about. (It’s important to note that what athenahealth does, it does quite well, with extremely high ratings for usability and customer satisfaction in its core business of outpatient billing and electronic charting.) Only time will tell if Einhorn is right, but he often is.
Einhorn wasn’t bearish on the entire health information technology sector. In fact, he praised another company—one that has invested billions in doing the hard work of creating robust integrated systems, one that enjoys a 100 percent client retention rate, one whose CEO isn’t sexy, trendy, or quotable. This company, he continued, is all but ignored by Wall Street, both because it’s not publicly traded and for one additional reason, a reason that instantly revealed the company’s identity.
“Oh, and they are from Wisconsin,” he said.
32 Although Epic is often beaten up by its competitors for using “a 50-year-old language,” today’s language is actually a MUMPS offspring named Caché. While it is not widely deployed, it is used by some picky clients—the Swiss banking system, for one. Both Faulkner and Halamka say that it offers very fast database performance, which is useful for the tasks Epic’s systems need to perform, including managing text, voice, images, and videos and linking to other IT systems.
33 As Epic often makes clear, only about 15 percent of an organization’s electronic health record investment ends up in Verona. The rest is for training the organization’s own workers, for paying its own IT staff, and for outside consultants to help with the implementation.
34 While Epic is clearly taking steps in the direction of interoperability, I spoke to third-party app developers who are still struggling trying to build interfaces to Epic APIs—one told me that it took phone calls to seven different Epic employees before he could get things to work.
35 Park was 24 years old when he cofounded athena. In 2008, he also cofounded Castlight Health, now a publicly traded company; it provides quality and cost data to employers and insurers. In 2012, President Obama named him the nation’s chief technology officer, and he was instrumental in fixing the disastrous healthcare.gov website and introducing big data and crowdsourcing approaches to the federal government.
36 Since the missed diagnosis of the first U.S. Ebola patient took place at an Epic facility, and the Texas hospital initially blamed its EHR for the error (a position that the hospital retracted the next day), athena’s prompt revision of its intake module was accompanied, unsurprisingly, by a press release that described the company’s cloud-facilitated nimbleness.
37 In February, 2015, athena and John Halamka’s Beth Israel Deaconess Medical Center (one of the few large hospitals still using a homegrown electronic health record) announced a deal to co-develop a cloud-based inpatient EHR. It will likely take two or three years.