By SETH JOSEPH
That is half 3 of Seth’s collection about Epic that has generated a lot curiosity and just a little controversy and we’re pleased to host it on THCB. Part 1 and Part 2 have been revealed on Forbes earlier this yr.
In keeping with individuals within the room, Judy Faulkner’s imaginative and prescient on stage at Epic’s 2022 Person Group Assembly was epic, within the grandest sense of the phrase.
The corporate, which had grown as a unified scientific and billing EHR system, was now laying out a roadmap through which it will be the digital entrance door for all issues shopper going through. An enormous panoply of capabilities together with, in accordance with Epic’s personal subsequent documentation, buyer relationship administration, supplier finders and on-line scheduling, on-line check-in, affected person monetary expertise, and lots of others.
Core to enabling all of this was shifting how sufferers work together with MyChart, the patient-facing software that enables people to entry their well being information.
Traditionally, every MyChart account was ‘tethered’ between a person and a hospital system and represented a easy portal for the person to view her information. If a person had been seen at a number of totally different hospital methods, then she would have a number of separate MyChart “situations”, or completely separate accounts and logins.
Now, Epic would ‘sew collectively’ the well being information and information from totally different hospitals on behalf of the person in advancing what colloquially has been known as Epic’s ‘nationwide MyChart technique’, and allow strong new performance, creating compelling network effects between shoppers and hospitals.
There have been only some issues with Epic’s technique: first, many purchasers weren’t asking Epic to develop these capabilities; second, there have been startups and incumbents already offering many of those capabilities; and third, the corporate was in a race with a federal company, which was pushing for open requirements and entry that threatened Epic’s plans.
However for a corporation that had slowly and steadily change into the dominant well being expertise participant, whose employees conferences for a interval ended half-jokingly on a slide with the phrases “World Domination” on them, these issues have been all fixable.
The Promise Of Client Empowerment Instruments
As trendy historical past has demonstrated again and again, the flexibility to personal or management the buyer entry level for expertise could be a strategic benefit. Apple’s glossy product designs, consumer expertise and tight ecosystem allow it to extract 30% of app developer revenues looking for to succeed in Apple’s customers. Google’s dominance in search has positioned it to be the entryway to the web for billions of shoppers no matter their final vacation spot, leading to extraordinary income development and profitability.
In healthcare, the flexibility to meaningfully interact shoppers via expertise has lengthy held promise of fixing intractable issues, whereas additionally probably positioning the agency that figures out how to take action as a brand new locus of energy, equally as Apple and Google above. Triaging care choices for shoppers, navigating them to decrease price companies, facilitating funds, and offering trendy comfort choices are just some of the lots of of use circumstances that consumer-facing expertise holds.
Key questions going through the companies looking for to seek out healthcare’s holy grail are how finest to do that and the place to start out, as shopper habits and sentiment towards healthcare has confirmed difficult for tech firms to determine.
As an example, tech giants Microsoft and Google had each positioned important bets on ushering a brand new period of shopper empowerment within the late-2000s, with Microsoft HealthVault and Google Well being. Often called affected person well being information (PHR), the 2 firms sought to allow shoppers to entry, combination, retailer and probably share their well being information.
Looking back, Microsoft and Google’s efforts have been maybe a bit too early, as each initiatives have been shut down within the early 2010s, earlier than an ecosystem of well being expertise adoption, connectivity and capabilities that might have feasibly supported their imaginative and prescient. And earlier than shoppers had a compelling cause to alter their very own use of expertise to interact of their healthcare.
By 2022, nevertheless, the ecosystem had arrived. After the EHR Incentive program, greater than 90% of docs and hospitals had EHRs. The Covid-19 pandemic drove speedy adoption of telehealth by each physicians and shoppers. Roughly $100 billion in enterprise capital had flowed into well being expertise innovation. New value transparency insurance policies have been shedding daylight into previously opaque and labyrinthine contracting practices. The twenty first Century Cures Act put enamel into driving interoperability, introducing information blocking as a civil penalty with million greenback fines. One trade group revealed a report titled “Unbundling Epic: How The EHR Market Is Being Disrupted.” This creator proclaimed The EHR Is Dead.
If the EHR was lifeless or being disrupted, then each EHR firm wanted a survival plan.
Epic’s Worry And Unfair Benefit
In keeping with one hospital government, it was this backdrop that involved Epic’s management: with a speedy inflow of recent gamers and a shifting stability of energy, Epic is perhaps relegated to “simply being the pipes” whereas others capitalized on new alternatives. Given the corporate’s inflexible perception – confirmed appropriate time and time once more – that it alone would ship one of the best outcomes for its clients and shoppers, Epic thought such an consequence could be a catastrophe.
To fight this danger, Epic by mid-2022 had a brand new technique with MyChart and community results on the coronary heart of it.
Prior thus far, Epic had allowed its hospital clients to construct their very own consumer-facing functions on prime of the MyChart chassis, or to usher in third-party options to take a seat on prime of and combine with MyChart. To assist this, Epic supplied software program growth kits (SDKs) to clients, and allowed integration choices to 3rd celebration distributors.
Supporting this innovation was necessary to some Epic clients. Particularly, bigger well being methods (usually these with extra sources and class) seen their consumer-facing capabilities as an necessary technique to differentiate themselves available in the market.
The brand new technique entailed driving adoption and utilization of MyChart (already one of the best identified patient-facing software within the nation), creating new consumer-facing capabilities and pushing hospitals to make use of these, and capturing shoppers as their most popular software of alternative.
Briefly, Epic sought to develop its sphere of affect, from a place of market dominance over one sector of healthcare (hospital methods) into one other: shoppers.
To take action, Epic crafted a coherent coverage and set of ways designed to steer hospitals to get on board with its imaginative and prescient, muscle out opponents, and affect regulation so as to obtain its ends.
Epic’s Techniques Leverage Its Strengths, However Increase Essential Anti Aggressive Questions
As beforehand reported, Epic arguably has a monopoly place with its inpatient EHR amongst multi-hospital well being methods and educational medical facilities. Since that reporting, Epic has continued to realize market share; its software program is now used at hospitals accounting for 51% of all beds nationwide. As a number of hospital executives have put it in conversations, Epic is working away with the EHR market.
The EHR could also be generally regarded as a scientific software, however it could be extra correct to consider it because the hospital’s working system. The distinction will be necessary: an software supplies workflow capabilities to attain a selected goal, whereas an working system acts as an interface between the consumer and {hardware} that controls the principles by which functions operate and the sources it has entry to.
Take into account that whereas docs and clinicians use the EHR as an software, it seems to be totally different from the hospital enterprise perspective: the EHR is the default system that its most extremely educated, paid and busiest employees work together with each day, rendering it the one most necessary system; the information entered by clinicians shops affected person information and related info that’s used for mission-critical functions together with billing, reporting, and audit features; and accordingly, it’s the system which nearly each different software should accordingly combine with (and never vice versa).
Because the hospital’s ‘working system’, Epic’s nationwide MyChart technique begins out with pure built-in benefits versus patient-facing expertise opponents, together with:
- MyChart footprint: The federal Significant Use Program required hospitals to make use of EHRs that supplied a affected person portal. At the moment, Epic’s MyChart boasts between 190M and 300M shopper accounts, an unbelievable early benefit given the increasing utilization of non-public well being information.
- Key shopper infrastructure and integration: A affected person portal is of restricted utility to a shopper. However one which begins out built-in with the supplier system, permitting single-sign on, scheduling, messaging, telehealth and associated methods the buyer could wish to work together together with her supplier, can present substantial worth.
- Hospital relationships and belief: The worth of having the ability to roll out new capabilities to current clients representing 60% of all well being system spend at a single occasion (on this case, the 2022 Epic consumer group assembly) can’t be overstated. Nor can the years and, oftentimes, many years of trusted relationships that Epic has cultivated with its clients.
In keeping with hospital and trade executives, Epic is within the strategy of pulling all of those levers. And whereas some opponents could complain about these built-in benefits, the truth is that Epic is dominant within the inpatient EHR marketplace for good cause, and it’s a sensible technique to leverage its current strengths throughout product, capabilities and relationships to advance its nationwide MyChart imaginative and prescient.
Nevertheless, a few of Epic’s different ways, although they might show to be extremely efficient, elevate questions. Listed here are 4 particularly:
1. “You’re On Your Personal”: A yoyo can mean a silly or incompetent particular person, a time period Epic has determined to use to a few of its clients. On the firm’s 2022 consumer group assembly, Judy Faulkner launched the time period “you’re by yourself” (yoyo) to consult with Epic hospital clients who wished to take care of their very own digital front-door technique. Shifting from its historic stance of being agnostic as as to if hospitals used solely Epic’s MyChart or most popular to develop their very own consumer-facing technique that built-in with MyChart, Epic made clear it wished hospitals to forgo their very own technique and get on board with a extra Epic-controlled model of MyChart. In keeping with this need are Epic supplies that clearly display function divergence for purchasers adopting its most popular ‘Personalised’ model of MyChart versus function discrimination for these ‘yoyo’ clients.
2. Altering Price Construction For ‘Yoyos’ and Elevating Costs To Steer to MyChart: In keeping with executives from a number of methods who discovered themselves being known as ‘yoyos’, Epic additionally subsequently and unilaterally has tried to alter its price construction for expertise and assist prices associated to MyChart. Traditionally, Epic charged a flat price to assist hospitals who both constructed their very own consumer-facing functions that built-in with MyChart or partnered with business distributors for a similar function. After it introduced its nationwide MyChart technique, nevertheless, Epic started notifying ‘yoyo’ clients that it was shifting to a brand new pricing construction based mostly on the variety of shoppers the hospital served. A number of hospital executives talked about that this could enhance the related MyChart charges by a number of thousand p.c, from tens of 1000’s of {dollars} yearly to hundreds of thousands; the choice was to keep away from these incremental charges by abandoning their very own consumer-facing methods and opting in to Epic’s nationwide MyChart technique.
In response to questions on these adjustments, an Epic spokesperson famous that MyChart charges themselves had not modified since 1999. With respect to expertise and assist prices, the spokesperson famous, “With ‘You’re On Your Personal,’ clients can select to license further instruments that permit their builders to embed elements of MyChart into their very own buyer functions.”
3. Eliminating Preexisting Interoperability Entry: Epic had traditionally supported its ‘yoyo’ clients, partly, by offering MyChart integration and interoperability sources to distributors that these clients select to work with for consumer-facing functions. With the introduction of its nationwide MyChart technique, nevertheless, Epic has begun proscribing entry to these sources. In some circumstances, Epic has allegedly let slip to some distributors, together with these they’ve labored with for years collaboratively, that they’re now opponents, and that Epic could be “sunsetting” (eliminating) current interoperability sources and that the distributors wouldn’t have entry to future iterations of the identical sources.
Based mostly on a evaluate of an Epic e-mail response to a person requesting the standing of beforehand out there sources, what Epic seems to be doing in some circumstances is withdrawing software programming interfaces (APIs) from its open.epic web site, and shifting these to its ‘Vendor Companies’ program. An preliminary problem for any vendor looking for to combine with Epic is that APIs in its Vendor Companies program aren’t revealed or discoverable. A vendor looking for to use to this program should first fill out and submit a questionnaire, however Epic supplies no steering on what the standards for inclusion or exclusion are, nor the way it determines what API sources might be out there or to whom. This observe exposes Epic to claims that it could be choosing winners and losers.
4. Delaying Requirements (Which Could Drive MyChart Adoption): The Nationwide Institute of Requirements and Know-how is a department of the U.S. Division of Commerce. Its IAL2 customary is meant to permit for distant identification proofing, which is important to enabling a future through which people can request and entry their very own medical information from current well being info networks that suppliers use routinely. Enabling people to make use of digital functions of their option to entry their information is a precedence for ASTP/ONC, the federal company answerable for selling interoperability. Epic announced in August that they’d assist this functionality, however with a twist: the corporate helps the IAL2 customary to permit people to find the place they’ve obtained care, however to not request and retrieve their information.
Some trade cynics have privately claimed that Epic’s stance will end in people nonetheless needing to have an current or create a brand new MyChart account, which can enhance charges Epic fees to hospitals (as MyChart charges are volume-based) and enhance lock-in of Epic’s ecosystem.
An Epic spokesperson flatly denies this, noting “Use of MyChart strictly for authorization to share information by way of OAuth 2.0 [another technical standard for identity authorization] doesn’t increment any MyChart subscription counter, doesn’t end in any further fees to our clients, and is unlikely to draw new customers to MyChart.”
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Individually, every tactic could assist a reputable enterprise function. As an example, whereas “yoyo” might sound a crude time period, it’s in keeping with Epic’s usually playful and artistic naming conventions. Altering its price construction could mirror Epic making a course correction to a pricey method of supporting clients, as an Epic spokesperson prompt. And as trade insider and analyst Brendan Keeler has famous, Epic is a leader amongst EHRs in relation to enabling particular person entry companies, so it’s laborious to critique.
Taken altogether, nevertheless, the collective ways are sufficient to have some trade insiders and traders involved that they’re anticompetitive.
Is Epic Unfairly Urgent its Excessive Floor Benefit?
Having grown organically since 1979 and solely up to now decade changing into the chief in EHR, it’s potential that Epic’s insular tradition blinds it to its personal market power and affect in adjoining markets.
If that’s the case, it could behoove Epic to mirror on points involving fellow tech giants who leveraged dominant market positions in a single enterprise to unfairly and illegally benefit themselves when going through expertise shifts and altering shopper habits. Most related could be the Microsoft lawsuit, through which Microsoft was found to be illegally using its dominant place as an working system to exclude opponents within the rising net browser market. And the newer case towards Google, through which Choose Mehta discovered the corporate acknowledged the ability of default placement and distribution to illegally safe and develop its place.
In Epic’s case, the corporate holds a dominant place because the hospital’s working system. By eradicating current APIs and interoperability sources to consumer-facing firms and altering price constructions, it’s making it extra cumbersome and costly for hospitals to pick out various patient-facing applied sciences, making MyChart the default path ahead. One consequence is the notion that its ways are exclusionary in nature and foreclose on innovation in an rising market. One other consequence, additionally problematic for Epic, is diminished shopper alternative and elevated direct prices (to hospitals) and oblique prices (to opponents and shoppers).
But, Epic arguably doesn’t must make use of these ways to win. MyChart appears well-positioned to finish up as probably the most strong, seamless and compelling ecosystem for shoppers on account of Epic’s trusted relationships with hospitals, dominant market share and current (and rising) community results.
In the meanwhile and absent any power majeure stopping Epic from executing its plan, it seems to be like Epic’s shopper technique is prone to end in community results that much more firmly entrench the corporate’s place and set up one other locus of energy. If profitable, Epic might discover itself ready like Apple, with the flexibility to extract a considerable income share from any developer looking for to entry shoppers for whom Epic could be the default “digital entrance door”.
If you happen to work in Verona Wisconsin, this can be a good factor. Perhaps too, when you’re a shopper.
Seth Joseph is the Founder and Managing Director of Summit Well being Advisors
