Sunday, April 21, 2013

An Epic voyage

Several months ago, I wrote a blog post comparing customers’ experience with Epic with the Stockholm Syndrome.

I reminded people of the syndrome:

Stockholm syndrome, or capture-bonding, is a psychological phenomenon in which hostages express empathy and have positive feelings towards their captors, sometimes to the point of defending them. These feelings are generally considered irrational in light of the danger or risk endured by the victims, who essentially mistake a lack of abuse from their captors for an act of kindness.

Then, I noted: 

What is striking about this company is the degree to which the CEO has made it clear that she is not interested in providing the capability for her system to be integrated into other medical record systems.  The company also "owns" its clients in that it determines when system upgrades are necessary and when changes in functionality will be introduced.  And yet, large hospitals sign up for the system, rationalizing that it is the best. 

I quoted an article by Kenneth Mandl and Zak Kohane in the New England Journal of Medicine:
We believe that EHR vendors propagate the myth that health IT is qualitatively different from industrial and consumer products in order to protect their prices and market share and block new entrants. In reality, diverse functionality needn't reside within single EHR systems, and there's a clear path toward better, safer, cheaper, and nimbler tools for managing health care's complex tasks.

A year ago, Forbes noted, "By next year 40% of the U.S. population--127 million patients--will have their medical information stored in an Epic digital record." 

It is this last point that we must now address, as I hear from my colleagues in the EHR world—no, not Epic’s competitors-- that Epic engages in practices that well help cement that market share for years to come.

They tell me, for example, there is the “good install credit.” If your enterprise chooses to have a significant portion of its IT staff trained and certified by Epic to conduct part of the system’s installation, you get a significant discount on the installation costs. On the one hand, training and using internal staff rather than outside consultants can be viewed as a good thing. On the other hand, what better way to assure future product loyalty than by indoctrinating a hospital’s internal IT force in the ways and means of this system?

Another technique they report to me is the limitation set on “certified consultants.” If you are a third-party consultant who would like to be certified as an Epic consultant, you have to promise not to work on other systems.

As a country we get nervous when any company in any sector has a market share in the range of 40% because we know that companies will use their market dominance to limit consumer options and hold back technological advancement.

In the 1980’s, we saw an antitrust case filed against the AT&T and its Bell System based on such concerns. AT&T, for example, engaged in an “installed base migration strategy,” a pricing policy that caused large business users to adopt its next generation of office-based telephone switching equipment, whether or not the users needed the new functionality. The pricing power was extraordinary. We also saw the company systematically prohibit the use of telephones and other premises-based terminal equipment provided by other manufacturers, claiming that it would damage the telephone network. You also had no choice of long distance carriers, and you paid for each call by the minute.

The situation was so pervasive that comedienne Lily Tomlin could easily generate laugh lines in her routine about Ernestine, the telephone operator, by saying, “We don't care, we don't have to...we're the phone company.”

Ultimately, the antitrust officials in the government stepped in, and the Bell System was broken up into its component parts. Competition was permitted in each segment. Anyone could install inside wire in their home or business. Anyone could manufacture and sell telephone sets. You had a choice of long distance carriers. Consumer choice expanded. Functionality increased to respond to market demand. Pricing plans changed. Value increased.

I see some analogies in the EHR environment. I hear that high-end specialty IT application companies—e.g., the best of breed emergency department system vendors—find it extremely difficult to make sales inroads in hospital systems that employ Epic, as compared to other enterprise systems. These are the folks that are developing the cutting edge applications to improve decision support, quality of documentation, and interoperability. They are the analogs to the terminal equipment, switching, and long distance companies that were squeezed out during the Bell System’s dominance.

Can we afford to delay the introduction of such systems in a health care system that is desperate for better quality and safety, greater efficiency, and higher value? While Epic does not have the market share once enjoyed by the Bell System, there is a special consideration here. We need to consider whether it is appropriate that an EHR company that is making its money in great measure on contracts paid directly or indirectly by federal funds should be able to engage in practices that support long-term market dominance.


Beverly Rogers said...

From Facebook:

Ah, there are so many opportunities for AT&T-style restrictions here. My experience is now out of date, but I bet it is still true that system-wide EHRs like Epic are not as good for hospital laboratories, for instance, as specialty lab systems (particularly true for microbiology) - similar to your sources' ER experience. But the big vendor can make the interface between their system and the lab system difficult or impossible, and always expensive. Ditto for many other components. Bottom line is we need an entirely new concept in EHR's that will render Epic and the others obsolete. I don't look for the 'govmint' to get around to doing anything useful before that happens.

The Medical Contrarian said...

You are absolutely spot on but do you think an anti-trust approach will result in anything better?

Ken said...

Very interesting and timely.
Important to address their lack of interoperability especially when so much of the growth is federally funded

AkikoaCom said...

Innovation will probably start successfully in smaller hospital systems with open-minded and more entrepreneurial management. While the world whines about the shortfalls and sheer body weight of Epic - can we find examples of Epic-less solutions that actually work today? Propagating viable alternatives - hopefully with an open API architecture - is so important!

Art Vandelay said...

Interesting and thought-provoking, however, there are possibly less insidious reasons for the points you cite and the interoperability comment (above). Let's take those one at a time:

1. The "Good Install Credit" - healthcare provider organizations are notorious for a lack of focus, avoiding the dedication of resources to large transformational projects, and the over-use of consultants to install critical applications. Consultants may understand a product, but they will never understand an organization as well as its own staff. An organization's staff presumably do not yet know the product so they must be trained. I believe that learning a product is more straight-forward than learning an organization and it has a much shorter time to value. By having resources trained and in adequate numbers, an organization is better positioned for success. Further, the vendor can make better use of its limited resources and spread them across more clients as they are not constantly bailing-out an undertrained and understaffed client. Epic does not drop throngs of installers on clients as some of their competitors will offer to do. Does staff potentially become more "loyal" to Epic? I believe that is an interesting question. However, do staff become more proficient at their jobs and the system is better adopted because it is configured and trained to the desired practices of the organization? Does staff like the Epic system because they understand its flexibility, capabilities and the value they can create for their organizations and patients and that's why they are "indoctrinated"?

2. Certified Consultants - this was partly covered in point 1. Organizations benefit from having their staff own the installation, the decisions made, the trade-offs made and being champions for change. By certifying consultants, Epic and clients are assured the consultants have some knowledge of the product, understand Epic's approach, and for this, the consultants gain access to certain knowledge bases that help them perform their jobs better. By also, avoiding the over-use of consultants, organizations understand the system better once the consultants move-on - avoiding a costly long-term dependency and they also avoid high-costs up-front during the installation process. An organization's resources should be more cost-effective than consultants.

3. Being nervous about an organization owning 40% market share - In my mind, Epic has built an organization by analyzing the challenges faced by healthcare providers in the use of EHRs, patient accounting, and various department-centric systems. They work to best accentuate the strengths while mitigating the typical risks. To me, they are providing value. For providing value, they gain market share. This is free market economics, not a lurid trust.

4. Best of breed and other innovative companies - these types of vendor organizations have been around for 20+ years. Standards haven't evolved to a point that allows interoperability. Because one really needs to deal with the semantics of knowledge exchange and not simply the syntax of data exchange, we are far away in my opinion. Meaningful Use is incenting the installation of the large single vendor suites as organizations lack the time, expertise, and funds to build and maintain their own best of breed architecture.

5. New concept in EHRs rendering them obsolete - that would be great and if that is defined. The vendors, universities, private sector wizards doing so will likely have then built another "monopoly" unless they decide to "donate" their innovation into the free market in a manner such as Open Source. Let's keep in mind that organizations that are great Open Source supporters still manage to make money, for example Red Hat. Further, a number of Open Source companies are often bought by commercial companies, for example Oracle.

Art Vandelay said...

Also, let us remember that we live in a country that is based on free market economics and not socialism. When we over-regulate, we create more complexity, more opportunities for arbitrage, and more loopholes that any good for-profit organization can and should look to optimize. Even if a company is "cementing" their place in the market, that is Business School Competitive Strategy 101. '201' is gaining Government support, etc. If one is to make the argument that healthcare is a foundational right and all citizens are owed this, and therefore the supporting infrastructure (e.g., EHRs) must also be "managed," one hits the slippery slope of defining an "end" to the management (e.g., pharmaceuticals, medical supplies, research, education, facilities, biomedical equipment, physician practices).

Paul Levy said...

Terrific points, Art, and well put forward. What I'd like to see is an objective assessment of those issues before it is too late. Remember, this is not a free market in the usual sense because tons of government-provided money is creating the market.

Carol Wilkinson ‏@drcarolw said...

From Twitter:

Why Epic scares me:
Bad monopoly holding
Health care in hostage.

Emil Soleyman ‏@emilsoleymanmd said...

From Twitter:

Those of us with past IT exp can see the "lock-in" coming. It will be a redux of proprietary vs open source software.

Marygold ‏@MarygoldJustice said...

From Twitter:

This post could easily be discussing Cerner. Working in QI, our EHR is an immense barrier to almost any improvement.

Anonymous said...

I do think Judy’s motives are good…… but they do make the innovators slow down.

Keep up the pressure!

Mitch said...

Your observations on Epic are spot-on. Please write more!

Medical Quack said...

Putting aside any of the business aspects of Epic regarding contracts employees sign, CEO Judy is a smart woman and goes to show the expertise you have when you have a CEO that write code and understands data mechanics. I see it all the time when folks compare and if you want to toss Bill Gates in there too as an example you can.

Look what happened to Allscripts when a non tech CEO lied about their integration and based sales on the good so again having a CEO that wrote the original code and understands data mechanics is huge. Non tech CEOs have a disadvantage there and Judy is a hybrid who also sees the sales and marketing side, again Bill Gates said to the graduating class of Berkeley a few years ago that "hybrids" are going to the ones to pay attention too and those with value. I know that because I blogged it:)

Epic developed all their data code and mechanics in house and there's a lot to be said for that and the same applies at your former hospital too, they did the same.

When you have programming and other marketing or sales elements they visualize differently than a CEO would with only one focus if you will. I used to program and thus I see logic and data mechanics in there and in a prior life spent over 20 years in outside sales, some with Fortune 500 companies that are public and have seen that wheel crank and as an employee have to change directions quickly as told.

Again you see these strengths with CEOs and other executives that have some computer science, programming or IT in their back ground as they see the big picture differently and can visualize the programming, models and coding needed. My blog challenges people but having been a former programmer it makes that way to where you turn to logic instead of emotions as you know what computer code does and how the algorithms and models roll:)

Anonymous said...

Great read- this is a late wake-up call for the American healthcare...

Anonymous said...

I agree 100% on the concern about Antitrust. I know that my company and many other small to mid-size vendors that don’t even compete with Epic but in fact, help with the adoption of there EHR during the conversion process and post go-live are blocked by Epic. It is amazing to hear a hospital say we agree with how your solution could help, but Epic won’t let us… really? And our solution does not need to integrate with Epic we don’t need their help or approval. I will close with saying I respect Epic’s ability to beat Cerner, Siemens, and it is clear they are putting a lot of pressure on MEDITECH, and if I competed with them; I would understand but Epic gets these customers to agree to not innovate cost their organizations in some cases millions of dollars and the reason “Epic said we can’t use your SW”

HIT PM said...

Previous Epic staffer here who's moved on to larger projects for a different Healthcare vendor and now am employed by a health system. The further I get from Epic the more I'm convinced they have prety much lobbied their way into the market(along with their competitors). As I now support the actual users as a fellow employee, I find them so insensitive to the needs of actual clinicians and holding healthcare hostage. I know that data usage is important and demographic/population trending is a new frontier in medicine but the workflow and patient interactions have been harmed so much by EMRs. I agree most strongly with the best of breeds being pushed out by the Epics and that will be very detrimental to patient care in the long term.

Lastly, putting $1.2 billion of taxpayer money in a private company with no transparency isn't a good thing in my mind. Also, I understand that the nature of government contracting is exploitative but reading about MaineHealth's recent struggles (among others) due specifically to an Epic implementation is discouraging. Closing hospitals and ERs to pay hundreds of millions of dollars to Epic is unconscionable.