By SETH JOSEPH
That is half 3 of Seth’s sequence about Epic that has generated a lot curiosity and a bit controversy and we’re completely satisfied to host it on THCB. Part 1 and Part 2 have been printed on Forbes earlier this yr.
In line 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 through which it could be the digital entrance door for all issues client going through. An enormous panoply of capabilities together with, based on 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 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 completely different hospital programs, then she would have a number of separate MyChart “cases”, or solely separate accounts and logins.
Now, Epic would ‘sew collectively’ the well being information 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 sturdy 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 an organization that had slowly and steadily change 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 have been all fixable.
The Promise Of Shopper Empowerment Instruments
As fashionable historical past has demonstrated repeatedly, the power to personal or management the buyer entry level for expertise is usually a strategic benefit. Apple’s glossy product designs, person expertise and tight ecosystem allow it to extract 30% of app developer revenues searching for to achieve 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 power to meaningfully interact shoppers by means of 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 providers, facilitating funds, and offering fashionable comfort choices are only a few of the lots of of use circumstances that consumer-facing expertise holds.
Key questions going through the corporations searching for to seek out healthcare’s holy grail are how greatest to do that and the place to start out, as client habits and sentiment towards healthcare has confirmed difficult for tech corporations to determine.
As an example, 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. Referred to as affected person well being information (PHR), the 2 corporations sought to allow shoppers to entry, mixture, 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 have interaction 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 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 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 printed a report titled “Unbundling Epic: How The EHR Market Is Being Disrupted.” This writer proclaimed The EHR Is Dead.
If the EHR was useless or being disrupted, then each EHR firm wanted a survival plan.
Epic’s Worry And Unfair Benefit
In line with one hospital govt, it was this backdrop that involved Epic’s management: with a fast inflow of recent gamers and a shifting steadiness of energy, Epic is likely to be relegated to “simply being the pipes” whereas others capitalized on new alternatives. Given the corporate’s inflexible perception – confirmed right time and time once more – that it alone would ship the most effective outcomes for its clients and shoppers, Epic thought such an consequence can 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 high of the MyChart chassis, or to herald third-party options to take a seat on high of and combine with MyChart. To assist this, Epic supplied software program improvement kits (SDKs) to clients, and allowed integration choices to 3rd celebration distributors.
Supporting this innovation was essential to some Epic clients. Specifically, bigger well being programs (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 most effective identified patient-facing utility within the nation), growing new consumer-facing capabilities and pushing hospitals to make use of these, and capturing shoppers as their most well-liked utility of selection.
In brief, Epic sought to increase its sphere of affect, from a place of market dominance over one sector of healthcare (hospital programs) 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 opponents, and affect regulation to be able to obtain its ends.
Epic’s Techniques Leverage Its Strengths, However Elevate Necessary Anti Aggressive Questions
As beforehand reported, Epic arguably has a monopoly place with its inpatient EHR amongst multi-hospital well being programs and tutorial 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 medical utility, however it might be extra correct to consider it because the hospital’s working system. The distinction may be essential: an utility supplies 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.
Contemplate that whereas docs and clinicians use the EHR as an utility, it appears to be like 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 every single day, rendering it the one most essential system; the info 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 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 opponents, together with:
- MyChart footprint: The federal Significant Use Program required hospitals to make use of EHRs that supplied a affected person portal. As we speak, Epic’s MyChart boasts between 190M and 300M client accounts, an unbelievable early benefit given the increasing utilization of non-public well being information.
- 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 need to work together along with her supplier, can present substantial worth.
- Hospital relationships and belief: The worth of with 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 person group assembly) can’t be overstated. Nor can the years and, oftentimes, a long time of trusted relationships that Epic has cultivated with its clients.
In line with hospital and trade executives, Epic is within the means 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 wise technique to leverage its current strengths throughout product, capabilities and relationships to advance its nationwide MyChart imaginative and prescient.
Nonetheless, a few of Epic’s different techniques, although they might show to be extremely efficient, increase questions. Listed here are 4 specifically:
1. “You’re On Your Personal”: A yoyo can mean a silly or incompetent individual, 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 check 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 well-liked 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 line with this need are Epic supplies that clearly exhibit function divergence for patrons adopting its most well-liked ‘Personalised’ model of MyChart versus function discrimination for these ‘yoyo’ clients.
2. Altering Payment Construction For ‘Yoyos’ and Elevating Costs To Steer to MyChart: In line with executives from a number of programs who discovered themselves being referred to as ‘yoyos’, Epic additionally subsequently and unilaterally has tried to alter its payment construction for expertise and assist prices associated to MyChart. Traditionally, Epic charged a flat payment 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 primarily based on the variety of shoppers the hospital served. A number of hospital executives talked about that this might improve 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 enable 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, partially, 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 limiting 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 can 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 evaluation of an Epic electronic mail response to a person requesting the standing of beforehand out there sources, what Epic seems to be doing in some circumstances is withdrawing utility programming interfaces (APIs) from its open.epic web site, and shifting these to its ‘Vendor Providers’ program. An preliminary problem for any vendor searching for to combine with Epic is that APIs in its Vendor Providers program usually are not printed or discoverable. A vendor searching for to use to this program should first fill out and submit a questionnaire, however Epic supplies no steering on what the factors for inclusion or exclusion are, nor the way it determines what API sources will likely be out there or to whom. This observe exposes Epic to claims that it might be selecting 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 normal 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 liable for selling interoperability. Epic announced in August that they’d assist this functionality, however with a twist: the corporate helps the IAL2 normal to permit people to find the place they’ve acquired care, however to not request and retrieve their information.
Some trade cynics have privately claimed that Epic’s stance will lead to people nonetheless needing to have an current or create a brand new MyChart account, which can improve charges Epic fees to hospitals (as MyChart charges are volume-based) and improve 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 lead to 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 official enterprise function. As an example, whereas “yoyo” may appear a crude time period, it’s according to Epic’s usually playful and artistic naming conventions. Altering its payment construction could replicate Epic making a course correction to a pricey means of supporting clients, as an Epic spokesperson instructed. And as trade insider and analyst Brendan Keeler has famous, Epic is a leader amongst EHRs relating to enabling particular person entry providers, so it’s arduous to critique.
Taken altogether, nevertheless, the collective techniques 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 turning into the chief in EHR, it’s doable that Epic’s insular tradition blinds it to its personal market energy and affect in adjoining markets.
In that 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 often is 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 more moderen case towards Google, through which Decide Mehta discovered the corporate acknowledged the ability of default placement and distribution to illegally safe and increase 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 corporations and altering payment buildings, it’s making it extra cumbersome and costly for hospitals to pick different patient-facing applied sciences, making MyChart the default path ahead. One consequence is the notion that its techniques are exclusionary in nature and foreclose on innovation in an rising market. One other end result, additionally problematic for Epic, is lowered client selection and elevated direct prices (to hospitals) and oblique prices (to opponents and shoppers).
But, Epic arguably doesn’t have to make use of these techniques to win. MyChart appears well-positioned to finish up as probably the most sturdy, seamless and compelling ecosystem for shoppers because 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 appears to be like like Epic’s client technique is more likely to lead to community results that much more firmly entrench the corporate’s place and set up one other locus of energy. If profitable, Epic may discover itself able like Apple, with the power to extract a considerable income share from any developer searching for to entry shoppers for whom Epic can be the default “digital entrance door”.
In case you work in Verona Wisconsin, it is a good factor. Possibly too, in the event you’re a client.
Seth Joseph is the Founder and Managing Director of Summit Well being Advisors
