Behind the Curtain | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Behind the Curtain

May 29, 2008
by Mark Hagland
| Reprints
Epic's unwavering commitment to its unique values has created an unusual recipe for success. What's behind Epic's gains in the clinical IT sphere?

When readers of HCI were asked what vendor they most wanted to read about, respondents picked one company by a wide margin (see graphic on page 28). The results weren't surprising, as one clinical information systems vendor has a truly unusual profile, and its very unusualness has given it a certain cachet. What's more, that company is different not just in one way, but in many. It has a unique operating methodology, sales approach, market strategy, history, and culture. It's even been described by some over the years as a “cult.” That company? The Madison, Wis.-based Epic Systems Corporation.

Of course, there are ways in which Epic does resemble its competitors. It sells corporately designed clinical systems software, which it implements in patient care organizations; it has a team of internal software developers and a team of implementers; and it competes with other core-clinical companies for the same essential base of customers, in both the inpatient and outpatient spheres (though Epic started in the outpatient sphere and moved into the hospital, while most have done the opposite). And it makes money — lots of money ($500 million in annual revenues as of late 2007 — see Epic's entry in the HCI 100, page 52).

But one quickly runs into a host of intriguing differences that make Epic different from the other major EMR and core-clinicals vendors in healthcare.

  • Epic almost never advertises, and relies almost entirely on word-of-mouth recommendations to market itself.
    EPIC Headquarters

    Photo: Glenn Loos-Austin



    EPIC Headquarters


  • Epic does retain salespeople, but they make no commissions on sales, and act more like advisers and consultants than traditional salespeople.

  • Epic turns away potential business. Indeed, prospective customers meeting with Epic representatives find they are being evaluated as much as they are evaluating. Epic executives regularly turn down potentially lucrative contracts with hospital, medical group and health system organizations if executives don't believe those organizations can implement successfully.

  • Epic executives have evolved a very specific implementation process over time, one that involves intensive pre-implementation analysis and planning, but then focuses very strongly on meeting go-live dates. And in contrast to the pattern with most large vendors, Epic executives and implementers strongly discourage delays. This process is so rigorous that it has sometimes sparked charges of “rigidity,” a rare phenomenon in the healthcare IT world.

  • Rather than seeking experienced healthcare IT professionals, Epic relies on hiring a large corps of the brightest young, just-out-of-college IT professionals for its programming and implementation positions. The organization has worked to build a culture of dedicated, loyal employees with a generally uniform approach to development and implementation. The downside, many say, is that this team generally lacks deeper knowledge of the patient care processes. All employees are also virtually required to move to Madison and work out of the corporate headquarters.

  • Epic never grows through acquisition, but rather relies on internal development, in extreme contrast to all its competitors among the largest clinical IS vendors. This has not only been the case with the company's move into the inpatient world, but for product expansion as well. For example, executives confirm Epic may someday add PACS to its offering, but will only do so if the technology is developed internally.
    EPIC Headquarters

    Photo: Anthony Guerra



    EPIC Headquarters


  • Most of all, Epic has a very unusual corporate culture, one that intrigues and sometimes puzzles those who encounter it or hear about it, and which was described by one interviewee as “unique and funky.” That culture emanates to an extraordinary degree from the personality of the company's visionary, media-averse founder and CEO.

Given this unusual combination of characteristics, policies and strategies, it's no wonder Epic has become the most talked-about IT vendor in the industry. Indeed, the combination is so odd in certain ways that it would seem to be a recipe for market failure. Whoever heard of not advertising? Of turning away lucrative business contracts? Of making all its employees move to snowy Wisconsin? Of requiring masses of employees at its customer organizations to become formally certified in the mastery of its software? Of refusing to ever acquire another company? Yet, for a variety of reasons, Epic has within the past several years grown at staggering rates, and become one of the most successful EMR vendors in healthcare IT.

As it turns out, an unusual combination of strategic vision, cultural rigor, market strategy, and sheer luck have combined to make Epic an odd-duck success, and give it a unique mystique in the industry. The question is: Where to begin unraveling the Epic mystery?

It's a “jungle” in there

As it turns out, one good place to start peeling back the layers of the Epic onion is by touring its expansive new headquarters, set on several hundred acres in Verona, a suburb of Madison. That is just what this reporter and his editor-in-chief did this year on a gray, windy day in mid-March. The new campus, which has been evolving over the past year-and-a-half, is set on a hilly landscape in what was not long ago farm country. With 3,000 employees and continuous growth, consolidating what had been multiple sites had become a practical necessity, says Judith Faulkner, Epic's founder, president, and CEO, as she gave us a tour of the main building. What's more, she says, it's important for the culture to have everyone physically together. That not only applies to the gathering of employees into one core corporate headquarters, but also Epic's unusual requirement that all employees live and be based out of the Madison area.
EPIC Headquarters

Photo: Anthony Guerra


EPIC Headquarters





EPIC Headquarters

Photo: Glenn Loos-Austin


EPIC Headquarters


EPIC Headquarters

Photo: Anthony Guerra


EPIC Headquarters


Walking through a variety of corridors, foyers, and conference rooms in the main building here takes one through imaginative street scenes and other trompe-l'oeil settings, from a New York subway station to a north woods lodge, to a World War II-era airplane hangar, to a New York street scene, to a vine-draped tropical jungle.

All these areas were created by theater set designers, Faulkner notes. “We didn't want to spend a lot of money, but we wanted to make the headquarters engaging … with an emphasis on surprises, innovation, and art,” she explains. And what better way to accomplish that than by engaging the visual sense as employees walk from one section of the headquarters to another? In fact, Faulkner notes, she has art pieces moved at regular intervals so employee vistas are always changing. Around virtually every turn at Epic's headquarters, there is a new scene, a new tableau or set piece. And Faulkner, who created Epic with two others in 1979, continues to be involved in every aspect of the interior decoration.

It was also Faulkner's decision that all Epic employees should have their own offices, in contrast to the cubicle jungle in place at most corporations. “I read a study somewhere that found that there is something like a 40 percent loss of productivity when employees work out of cubicles,” Faulkner says. She also notes, “We're competing with Microsoft and Dell for employees,” and cites the individual-office benefit as a lure for potential employees.
EPIC Headquarters

Photo: Anthony Guerra


EPIC Headquarters


Singing the same tune

Despite the fact some sun-lovers may consider Wisconsin a less than ideal climate, Epic executives report that they are able to be extremely selective in choosing the best and the brightest from among young IT professionals nationwide (with all job candidates being subjected to a wide battery of intelligence and skills tests).

More fundamentally, what Epic is and how it operates reflects to an extraordinary degree the personality, perspectives, and goals of one person, and that person is Faulkner. Judy Faulkner is unusual among healthcare IT founder-CEOs in many ways, not least of all in her inherent shyness and aversion to media coverage and attention in general. Indeed, her two stipulations in agreeing to be interviewed for this article were first, that HCI would publish no photos of her; and second, that the magazine promise this article not be a personal profile. How many other vendor CEOs might conceivably shy away from such attention? One strains mightily to come up with their names. So of course, readers will wonder — what is Judy Faulkner like? And what does she look like? A slender, 50-something brunette with lively eyes and an engaging manner, Faulkner is impressive in person. Completely in command, and clearly holding the respect of her staff, she exudes an aura of quiet intensity. Reluctantly admitting to having an “ABD” (all but dissertation) in work she had done years ago towards a doctorate in computer science, Faulkner is clearly exceptionally intelligent. At the same time, she consistently tries to draw attention away from herself and towards her team, and becomes impatient when asked about the “Judy-centricity” that seems to attach to every rumored story that floats through the industry about how the company operates.

  • Cerner 6.78%

  • Eclipsys 13.56%

  • Epic 38.98%

  • GE 11.86%

  • McKesson 8.47%

  • Meditech 10.17%

  • QuadraMed 0.0%

  • Siemens 10.17%

“Look,” Faulkner says, “we've got 3,000 people here. We've got too much going on for one person to make all the decisions,” citing a recent example of her not being informed of whether the company would use a Java-based or dot-net approach to going onto the Web (see sidebar below for more on that development). “But,” she adds, “I've always said that the role of the CEO is to make sure the company does the right thing. I can't imagine going to the board and saying, ‘Well, I thought this one thing was right, but the vote went the other way.’ It's like with children — as a parent, you're going to be responsible if your child runs into traffic, aren't you?”

Indeed, Faulkner has succeeded in creating an organization and a culture that reflects her to an exceptional degree. All of Epic's most distinguishing characteristics come out of her thoughts and early development work for the company, including:

  • the decision to eschew virtually all direct advertising and most marketing, with the notable exception of participation in the annual HIMSS Conference, as well as participation in one or two other conferences a year;

  • the decision to avoid hiring implementation specialists with significant healthcare experience, instead training Epic's own corps of young people and molding them to the organization's corporate culture;

  • the requirement that customer organizations have their IS staffs become certified in the understanding of Epic's products;

  • the strategy to never acquire other companies, but instead grow through internal development over time, a strategy that has been consistent from the company's inception;

  • the determination to remain privately held;

  • the uncommon strategy of regularly turning away business.


Dave Garets

Dave Garets


Faulkner has clearly been successful in creating a unified corporate culture. Speaking with Epic executives, one has an almost eerie sense of the exceptional degree to which Epic people tend to think similar thoughts. Perhaps not surprisingly, Faulkner remains sensitive to the frequent descriptions of the company as a “cult,” and continually emphasizes the diversity of opinions involved in establishing the company's direction. “It's more like we're rowing in the same direction instead of many directions,” she says and laughs. “We don't hold hands and sing ‘Kumbayah.’”

A formidable mystique

Still, despite Faulkner's protestations, the unified quality of thought and action under her at Epic, and the unusual set of corporate characteristics cited above, only add to the formidable mystique that has evolved around the company. Certainly, the other largest clinical vendors have their own auras: Atlanta-based McKesson Corporation has a reputation as an acquisitive behemoth that eats other companies for breakfast, and has grown huge as a result; Malvern, Pa.-based Siemens Medical Solutions has a special glamour, being European-owned and with imposing modality and software divisions; and Kansas City, Mo.-based Cerner Corporation has highly regarded core clinical products and a charismatic CEO. But none of those corporations has the singular identity that Epic does. And whether senior Epic executives admit it or not, industry observers agree that having a special mystique encourages sales.

With regard to the founder/CEO's vision for her company and how it has played out, one need only look at two interrelated strategies above all: the determination to remain private and the regular habit of turning business away.

“I always liked the philosophy that if you're making the kind of money you want to make, and you don't have to give up the ghost to get it, that's a great idea,” says Scott Grier, a director at the Nashville.-based Abrio Consulting. “In the old days, when Neal was having to go public and others were already pu blic,” he says, referring to Cerner's Neal Patterson, “the only way they could grow was through acquisition. And acquisitions are very expensive. But because Judy chooses to keep her head down and keep focused on the product, she doesn't have to turn to people for money. And her company being privately held, she has the luxury of turning away poor-prospect customers in a way that publicly held companies never could.”

Dave Garets, president of HIMSS Analytics, the data analysis division of HIMSS, echoes this analysis. “I agree, and that's why Judy's been successful,” he says. “It's a brilliant strategy, it's very simple. But it takes a lot of courage, quite frankly, to turn down potentially millions of dollars.”

The strategy to rigorously sift through potential customers and not sign all of them — a strategy that results in what could potentially be sub-optimal growth — conversely optimizes customer satisfaction, which has become Epic's calling card in the market.

Asked what makes Epic different, Melinda Costin, vice president of applications at the Dallas-based Baylor Health Care System, says, “Their attention to their customer is their outstanding characteristic. Now, this is easy for them because they're privately held,” adds Costin, who ran the Epic implementation practice at the former HealthLink (now part of the Armonk, N.Y.-based IBM Healthcare and Life Sciences).
Gerry Bartley

Gerry Bartley


“For most companies,” she continues, “their number-one concern is returning revenues to shareholders. And so Judy's never had to sell out. And it really allows you to do the right thing. And she is so geared towards doing the right thing. And her philosophy has been, if I hire smart people and focus them towards doing the right thing, it will work out.”

“So instead of hiring jaded people,” adds Costin, who in her past job led implementations of all the largest core-clinical vendors' products, “she hires the best and the brightest right out of school, and grooms them in a culture of focusing on the customer.”

The strategy of using smart young people straight out of college or graduate school is probably the company's most controversial, judging from conversations with those in the industry, and it appears to cut both ways.


left); Andy Giesler, Epic Corporate Historian/Software Develper, with Epic COO Carl Dvorak

Photo: Anthony Guerra


left); Andy Giesler, Epic Corporate Historian/Software Develper, with Epic COO Carl Dvorak


“The people they hire are very intelligent people, but they don't have healthcare experience,” notes Christine Booker, a partner with the Dallas-based ACS Healthcare Solutions, who is helping to lead an extensive Epic implementation at a multi-hospital system in Southern California (which, she declined to specify). “And that leads clients to go back after the initial Epic implementation and spend a considerable amount of time doing what they call optimization.”

One inherent weakness in hiring people without healthcare backgrounds, says the Pasadena, Calif.-based Booker, is that, “The young people, as consultants, can't say, based on their experience in healthcare, that, yes, this or that is the best way to use this application in your organization.” Also, she adds, “The whole Epic certification they require has caused the IT staffing salaries to get very far out of whack on the client side, because you need staff with Epic certification in every single area. So these people are now leaving the client organizations, and they are commanding some very high salaries.”

That said, Booker quickly adds, “I think that their product is probably the best in terms of all the electronic medical records out there. It is absolutely the most integrated product out there. It's fully integrated; it has the ability to create standards for documentation in patient care that will allow the hospital to be that much more proactive if it's implemented appropriately.”

What's more, it is on the implementation side that Epic really shines, say observers. Gerry Bartley — president of Healthcare Informatics Associates (HIA), an Infologix company, and executive vice president and managing director of healthcare consulting at Infologix HIA, Bainbridge Island, Wash. — says he's never been involved in an Epic implementation that failed.

“The difference is that they have a methodology. Sometimes, it's very rigid; and that's an objection. And you have to push back sometimes.” But, he says, the intense preparation prior to actual implementation work is a strong differentiator for the company.

The question of excessive rigidity came up during the Epic EMR implementation at Children's Hospital of Philadelphia (CHOP) recently, reports Brian Wells, who was an IT project director at CHOP during that hospital's recent implementation period. As the CHOP organization neared the target go-live date of two years from inception, Wells, who in September 2007 became CTO at the University of Pennsylvania Health System, also in Philadelphia, says, “Epic was pushing us to get to the go-live on time. We ended up delaying the go-live by seven weeks, which isn't much on a two-year project, because we needed to test. But if we had listened to them, we would have had a rougher go-live. And that's because they tend to be working hard with multiple go-lives, so if a customer slips that complicates them.”


The corridor leading off the entry foyer at Epic headquarters

Photo: George Heinrich


The corridor leading off the entry foyer at Epic headquarters


That having been said, Wells says of Epic's young, but “energetic” people, “They will do everything they can to help you be successful. And they're also Midwestern; they're very friendly and gentle. The advice I was given was, if Epic tells you something three times, you'd better take it seriously. Because that's how they do it; they will keep coming back at you with questions and issues. And they do a monthly status report and review, a kind of report card with how your project is going.”

Carl Dvorak, Epic's executive vice president, and the company's clear second-in-command, says, “I haven't heard the word ‘rigidity’ used before. We have over 100 major projects in process right now. What we've learned is that we can look at past projects, and within a zone of safety, we can tell when that project will be ready to go live or not. For many of our clients, it's their first major project like this. People who want to wait or stall to go live want to achieve a better outcome. And I've found that by delaying, usually they're not ensuring a better outcome. At the end of the day, if the organization truly understands and they decide they want a few more months, we understand.” Besides, he adds, “Our people don't get a bonus for finishing up early.”

With regard to the charge that most hospital organizations end up doing a considerable amount of customization or optimization post-go-live, Dvorak says that those who have made such comments “probably mean ‘personalization.’ It's pretty rare for anybody to truly customize these days at all. But there is a wealth of personalization you can do, such as personalized templates and orders. You're not customizing software, but personalizing templates, and so on.”

The next CEO

Meanwhile, what primarily concerns existing and potential customers is the issue of CEO succession, a particularly tricky question considering the extraordinary degree to which Faulkner continues to shape Epic. Indeed, it is the one issue that every person interviewed for this article cited as a concern, and many advised this reporter that, “You need to ask Judy about the succession issue.”

When asked about that issue, Faulkner, while declining to lay out a clear succession plan (which may or may not exist), says she's not worried, because she has a core group of senior executives around her who have all been at Epic for a very long time, many for 20 years or more. Those executives, Faulkner says, have internalized the company's culture and will guard against undesirable changes, such as pursuing acquisitions or going public. Besides, Faulkner adds, she has no plans to leave her position anytime soon.

Asked about the company's direction, Faulkner says Epic's singular focus will continue to be its strength. “We have a very simple focus,” she says. “We're not public, so that helps. Someone asked what our vision was, and I said, ‘healthcare software.’ Not equipment or acquisitions. It's so much harder if you have so many directions you're going. We have a much simpler path; we don't have all these roads going all over the place. We're just healthcare software.” And she adds that no matter what happens, she will continue to hold a plurality of the corporation's private stock, and will keep the organization focused on what it does well, ignoring the rest. In this business, she says, “You do have to look ahead to the future, but you can't look too far ahead, because the world is constantly changing.”


The Health IT Summits gather 250+ healthcare leaders in cities across the U.S. to present important new insights, collaborate on ideas, and to have a little fun - Find a Summit Near You!


/article/behind-curtain

See more on

agario agario---betebet sohbet hattı betebet bahis siteleringsbahis