By SETH JOSEPH
That is half 3 of Seth’s collection about Epic that has generated a lot curiosity and a little bit controversy and we’re blissful to host it on THCB. Part 1 and Part 2 had been revealed on Forbes earlier this 12 months.
In accordance with folks within the room, Judy Faulkner’s imaginative and prescient on stage at Epic’s 2022 Consumer Group Assembly was epic, within the grandest sense of the phrase.
The corporate, which had grown as a unified medical and billing EHR system, was now laying out a roadmap during which it could be the digital entrance door for all issues client going through. An enormous panoply of capabilities together with, in keeping with Epic’s personal subsequent documentation, buyer relationship administration, supplier finders and on-line scheduling, on-line check-in, affected person monetary expertise, and plenty of others.
Core to enabling all of this was shifting how sufferers work together with MyChart, the patient-facing utility that enables people to entry their well being data.
Traditionally, every MyChart account was ‘tethered’ between a person and a hospital system and represented a easy portal for the person to view her data. If a person had been seen at a number of completely different hospital techniques, then she would have a number of separate MyChart “situations”, or solely separate accounts and logins.
Now, Epic would ‘sew collectively’ the well being data and information from completely different hospitals on behalf of the person in advancing what colloquially has been referred to as Epic’s ‘nationwide MyChart technique’, and allow strong new performance, creating compelling network effects between shoppers and hospitals.
There have been just a few issues with Epic’s technique: first, many shoppers 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 an organization that had slowly and steadily develop into the dominant well being expertise participant, whose workers conferences for a interval ended half-jokingly on a slide with the phrases “World Domination” on them, these issues had been all fixable.
The Promise Of Client Empowerment Instruments
As fashionable historical past has demonstrated again and again, the flexibility to personal or management the buyer entry level for expertise generally is a strategic benefit. Apple’s modern product designs, person expertise and tight ecosystem allow it to extract 30% of app developer revenues in search of 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 progress and profitability.
In healthcare, the flexibility to meaningfully have interaction shoppers by means of expertise has lengthy held promise of fixing intractable issues, whereas additionally doubtlessly 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 providers, facilitating funds, and offering fashionable comfort choices are just some of the a whole bunch of use circumstances that consumer-facing expertise holds.
Key questions going through the corporations in search of to search out healthcare’s holy grail are how finest to do that and the place to begin, as client habits and sentiment towards healthcare has confirmed difficult for tech corporations to determine.
As an illustration, tech giants Microsoft and Google had each positioned vital bets on ushering a brand new period of client empowerment within the late-2000s, with Microsoft HealthVault and Google Well being. Generally known as affected person well being data (PHR), the 2 corporations sought to allow shoppers to entry, mixture, retailer and doubtlessly share their well being data.
On reflection, Microsoft and Google’s efforts had been maybe a bit too early, as each initiatives had 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 motive to vary their very own use of expertise to have interaction of their healthcare.
By 2022, nonetheless, the ecosystem had arrived. After the EHR Incentive program, greater than 90% of docs and hospitals had EHRs. The Covid-19 pandemic drove fast adoption of telehealth by each physicians and shoppers. Roughly $100 billion in enterprise capital had flowed into well being expertise innovation. New worth transparency insurance policies had 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 business 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 Concern And Unfair Benefit
In accordance with one hospital govt, it was this backdrop that involved Epic’s management: with a fast inflow of latest 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 the perfect outcomes for its clients and shoppers, Epic thought such an final result 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 sit down on prime of and combine with MyChart. To help this, Epic supplied software program growth kits (SDKs) to clients, and allowed integration choices to 3rd social gathering distributors.
Supporting this innovation was essential to some Epic clients. Particularly, bigger well being techniques (sometimes these with extra sources and class) considered their consumer-facing capabilities as an essential method to differentiate themselves available in the market.
The brand new technique entailed driving adoption and utilization of MyChart (already the perfect identified patient-facing utility within the nation), creating new consumer-facing capabilities and pushing hospitals to make use of these, and capturing shoppers as their most popular utility of alternative.
Briefly, Epic sought to develop its sphere of affect, from a place of market dominance over one sector of healthcare (hospital techniques) into one other: shoppers.
To take action, Epic crafted a coherent coverage and set of techniques designed to influence hospitals to get on board with its imaginative and prescient, muscle out rivals, and affect regulation in an effort to obtain its ends.
Epic’s Techniques Leverage Its Strengths, However Increase Necessary Anti Aggressive Questions
As beforehand reported, Epic arguably has a monopoly place with its inpatient EHR amongst multi-hospital well being techniques 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 operating away with the EHR market.
The EHR could also be generally considered a medical utility, however it might be extra correct to consider it because the hospital’s working system. The distinction could be essential: an utility gives workflow capabilities to attain a selected goal, whereas an working system acts as an interface between the person and {hardware} that controls the foundations by which functions operate and the sources it has entry to.
Take into account that whereas docs and clinicians use the EHR as an utility, it appears completely different from the hospital enterprise perspective: the EHR is the default system that its most extremely skilled, paid and busiest workers work together with each day, rendering it the only most essential system; the information entered by clinicians shops affected person data and related data that’s used for mission-critical functions together with billing, reporting, and audit capabilities; and accordingly, it’s the system which nearly each different utility 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 rivals, together with:
- MyChart footprint: The federal Significant Use Program required hospitals to make use of EHRs that supplied a affected person portal. Immediately, Epic’s MyChart boasts between 190M and 300M client accounts, an unbelievable early benefit given the increasing utilization of non-public well being data.
- Key client infrastructure and integration: A affected person portal is of restricted utility to a client. 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 with the ability to roll out new capabilities to present clients representing 60% of all well being system spend at a single occasion (on this case, the 2022 Epic person 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 accordance with hospital and business executives, Epic is within the technique of pulling all of those levers. And whereas some rivals could complain about these built-in benefits, the truth is that Epic is dominant within the inpatient EHR marketplace for good motive, and it’s a sensible technique to leverage its present strengths throughout product, capabilities and relationships to advance its nationwide MyChart imaginative and prescient.
Nevertheless, a few of Epic’s different techniques, although they might show to be extremely efficient, elevate questions. Listed below are 4 specifically:
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 person group assembly, Judy Faulkner launched the time period “you’re by yourself” (yoyo) to confer with Epic hospital clients who needed to keep up 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 needed hospitals to forgo their very own technique and get on board with a extra Epic-controlled model of MyChart. In keeping with this want are Epic supplies that clearly reveal characteristic divergence for patrons adopting its most popular ‘Customized’ model of MyChart versus characteristic discrimination for these ‘yoyo’ clients.
2. Altering Price Construction For ‘Yoyos’ and Elevating Costs To Steer to MyChart: In accordance with executives from a number of techniques who discovered themselves being referred to as ‘yoyos’, Epic additionally subsequently and unilaterally has tried to vary its payment construction for expertise and help prices associated to MyChart. Traditionally, Epic charged a flat payment to help 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, nonetheless, Epic started notifying ‘yoyo’ clients that it was shifting to a brand new pricing construction primarily based on the variety of shoppers the hospital served. A number of hospital executives talked about that this may enhance the related MyChart charges by a number of thousand %, from tens of hundreds of {dollars} yearly to tens of millions; 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 modifications, an Epic spokesperson famous that MyChart charges themselves had not modified since 1999. With respect to expertise and help prices, the spokesperson famous, “With ‘You’re On Your Personal,’ clients can select to license further instruments that permit their builders to embed components 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, nonetheless, 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 rivals, and that Epic could be “sunsetting” (eliminating) present interoperability sources and that the distributors wouldn’t have entry to future iterations of the identical sources.
Based mostly on a assessment of an Epic electronic mail response to a person requesting the standing of beforehand accessible sources, what Epic seems to be doing in some circumstances is withdrawing utility programming interfaces (APIs) from its open.epic website, and shifting these to its ‘Vendor Companies’ program. An preliminary problem for any vendor in search of to combine with Epic is that APIs in its Vendor Companies program will not be revealed or discoverable. A vendor in search of to use to this program should first fill out and submit a questionnaire, however Epic gives no steering on what the standards for inclusion or exclusion are, nor the way it determines what API sources can be accessible or to whom. This apply exposes Epic to claims that it might be choosing winners and losers.
4. Delaying Requirements (Which Might Drive MyChart Adoption): The Nationwide Institute of Requirements and Expertise is a department of the U.S. Division of Commerce. Its IAL2 commonplace is meant to permit for distant id proofing, which is important to enabling a future during which people can request and entry their very own medical data from present well being data networks that suppliers use routinely. Enabling people to make use of digital functions of their option to entry their data is a precedence for ASTP/ONC, the federal company liable for selling interoperability. Epic announced in August that they’d help this functionality, however with a twist: the corporate helps the IAL2 commonplace to permit people to find the place they’ve obtained care, however to not request and retrieve their data.
Some business cynics have privately claimed that Epic’s stance will end in people nonetheless needing to have an present or create a brand new MyChart account, which can enhance charges Epic costs 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 costs to our clients, and is unlikely to draw new customers to MyChart.”
————–
Individually, every tactic could help a reliable enterprise function. As an illustration, whereas “yoyo” may appear a crude time period, it’s in step with Epic’s usually playful and artistic naming conventions. Altering its payment construction could replicate Epic making a course correction to a pricey method of supporting clients, as an Epic spokesperson urged. And as business insider and analyst Brendan Keeler has famous, Epic is a leader amongst EHRs relating to enabling particular person entry providers, so it’s exhausting to critique.
Taken altogether, nonetheless, the collective techniques are sufficient to have some business insiders and buyers involved that they’re anticompetitive.
Is Epic Unfairly Urgent its Excessive Floor Benefit?
Having grown organically since 1979 and solely previously decade changing into the chief in EHR, it’s attainable that Epic’s insular tradition blinds it to its personal market energy and affect in adjoining markets.
If that’s the case, it might behoove Epic to replicate 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 client conduct. Most related will be the Microsoft lawsuit, during which Microsoft was found to be illegally using its dominant place as an working system to exclude rivals within the rising net browser market. And the more moderen case in opposition to Google, during which Decide Mehta discovered the corporate acknowledged the facility 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 present APIs and interoperability sources to consumer-facing corporations and altering payment constructions, it’s making it extra cumbersome and costly for hospitals to pick various patient-facing applied sciences, making MyChart the default path ahead. One final result is the notion that its techniques are exclusionary in nature and foreclose on innovation in an rising market. One other consequence, additionally problematic for Epic, is diminished client alternative and elevated direct prices (to hospitals) and oblique prices (to rivals and shoppers).
But, Epic arguably doesn’t must make use of these techniques to win. MyChart appears well-positioned to finish up as probably the most strong, seamless and compelling ecosystem for shoppers because of Epic’s trusted relationships with hospitals, dominant market share and present (and rising) community results.
In the interim and absent any drive majeure stopping Epic from executing its plan, it appears like Epic’s client 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 able like Apple, with the flexibility to extract a considerable income share from any developer in search of to entry shoppers for whom Epic could be the default “digital entrance door”.
In the event you work in Verona Wisconsin, it is a good factor. Possibly too, for those who’re a client.
Seth Joseph is the Founder and Managing Director of Summit Well being Advisors
