This year, as in past years, Healthcare Informatics has designated several vendor companies in healthcare IT as “Most Interesting Vendors,” and is featuring profiles of those companies in its Healthcare Informatics 100 issue, which this year is our May/June issue. The “Most Interesting Vendor” designation is not an award, but simply a recognition. The trajectories of these companies speak to some of the broader trends taking place in healthcare IT in general and in the healthcare IT vendor market, and are thus of interest to readers. Healthcare Informatics’ Editor-in-Chief Mark Hagland’s profile of the Verona, Wis.-based Epic is the cover story of our May/June issue.
Nine years ago, when we at Healthcare Informatics profiled Epic Systems Corporation, we produced the first major trade-press profile of the Verona, Wisconsin-based electronic health record (EHR) and clinical IT vendor, at a time when the healthcare industry was mesmerized by the company’s rapid rise into the top ranks of EHR vendors nationwide. As we reported in the June 2008 cover story, “Epic: Behind the Curtain,” there was a host of reasons available to explain Epic’s meteoric rise, and its growing dominance among EHR vendors winning the largest number of new and replacement EHR contract bid competitions.
Since then, Epic has only continued to prosper. With revenues of $2.5 billion in 2016, the privately owned company ranked sixth on this year’s Healthcare Informatics 100 list of the top healthcare IT vendors in the U.S., the third EHR/clinical information systems vendor on the list behind Cerner Corporation and McKesson Technology Solutions, and ahead of GE Healthcare, Allscripts Healthcare Solutions, athenahealth, MEDITECH, eClinicalWorks, Greenway Health, Quality Systems Inc. (NextGen), and other major EHR vendors. But Epic’s ranking on the 100 list tells only part of the story, as the company continues to win a considerable percentage of new EHR contract contests, and has become strongly dominant in a number of major healthcare markets, among them the San Francisco Bay Area and the Minneapolis St.-Paul metro area. Indeed, there are markets in which any hospital or health system using a non-Epic EHR is at a strong disadvantage in terms of health information exchange (HIE) and other priorities and activities.
What’s more, several years after the meaningful use program under the HITECH (Health Information Technology for Economic and Clinical Health) Act first got underway, the chances of significant new entrants coming into the rapidly maturing EHR market and succeeding, are dwindling, as Epic and the other mega-EHR vendors cement their hold on that market. Debates are raging across U.S. healthcare as to whether the ongoing acceleration in this consolidation trend that had already become prominent back in 2009, before meaningful use got underway, is a good thing or a bad thing. Certainly, some are openly questioning the value to healthcare providers (and even patients) of an EHR market with fewer and fewer options for patient care organizations, and many are wondering whether the consolidation trend will end up choking off innovation, particularly in the API (application program interface) market, as providers look for solutions that can leapfrog the limiting architectures of core EHRs and help clinicians and administrators improve population health management, care management, and other processes.
At a very basic level, is this ongoing consolidation a good thing or a bad thing for U.S. healthcare? Industry leaders and observers struggle to answer that question. But whatever the answer, Epic finds itself inevitably at the center of the discussion, on the industry, strategic, and policy levels, as the company continues to snap up many of the current EHR implementation contracts.
As we noted back in June 2008, one of the core reasons that Epic continues to win a significant plurality of those bids is because, while its prices, depending on numerous factors, are reportedly nearly double those of their main competitors, Epic’s unique methodology—a rigorous one in which Epic implementers tell their customer organizations how and when to follow implementational steps, and not the other way around—continues to get high marks for results, with very few implementations that don’t go as planned. As one CIO told me two years ago after bringing her EHR live, “It’s simple, really: an implementational failure would not only be a job-ender for me, it would be a career-ender. Epic costs twice as much on the surface, but it’s pretty much guaranteed, and I need a guarantee. I simply can’t afford not to do this successfully; I know that, and everyone around me knows that.”