By SETH JOSEPH
That is half 3 of Seth’s sequence about Epic that has generated a lot curiosity and a bit of controversy and we’re completely happy to host it on THCB. Half 1 and Half 2 had been revealed on Forbes earlier this 12 months.
In accordance 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 medical 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 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 lots of others.
Core to enabling all of this was shifting how sufferers work together with MyChart, the patient-facing utility that permits 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 methods, 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 known as Epic’s ‘nationwide MyChart technique’, and allow strong new performance, creating compelling community results between shoppers and hospitals.
There have been only some 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 Shopper Empowerment Instruments
As trendy historical past has demonstrated repeatedly, the flexibility to personal or management the buyer entry level for expertise generally is a strategic benefit. Apple’s modern product designs, consumer 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 flexibility to meaningfully have interaction shoppers by 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 companies, facilitating funds, and offering trendy comfort choices are just some of the tons of of use instances that consumer-facing expertise holds.
Key questions going through the corporations searching 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 illustration, tech giants Microsoft and Google had each positioned vital bets on ushering a brand new period of shopper empowerment within the late-2000s, with Microsoft HealthVault and Google Well being. Generally known as affected person well being data (PHR), the 2 firms sought to allow shoppers to entry, combination, retailer and doubtlessly share their well being data.
Looking back, 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 would 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 medical doctors 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 had been shedding daylight into previously opaque and labyrinthine contracting practices. The twenty first Century Cures Act put enamel into driving interoperability, introducing data 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 writer proclaimed The EHR Is Lifeless.
If the EHR was useless 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 speedy inflow of recent gamers and a shifting stability of energy, Epic may 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 one of the best outcomes for its prospects and shoppers, Epic thought such an final result can be a catastrophe.
To fight this threat, Epic by mid-2022 had a brand new technique with MyChart and community results on the coronary heart of it.
Prior up to now, Epic had allowed its hospital prospects to construct their very own consumer-facing purposes on high of the MyChart chassis, or to herald third-party options to sit down on high of and combine with MyChart. To assist this, Epic offered software program improvement kits (SDKs) to prospects, and allowed integration choices to 3rd get together distributors.
Supporting this innovation was necessary to some Epic prospects. Particularly, bigger well being methods (sometimes these with extra sources and class) considered their consumer-facing capabilities as an necessary method 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 utility within the nation), creating new consumer-facing capabilities and pushing hospitals to make use of these, and capturing shoppers as their most well-liked utility of alternative.
In brief, 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 techniques designed to influence hospitals to get on board with its imaginative and prescient, muscle out rivals, and affect regulation to be able to obtain its ends.
Epic’s Ways Leverage Its Strengths, However Elevate Vital 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 achieve 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 regarded as a medical utility, however it could be extra correct to think about it because the hospital’s working system. The distinction might be necessary: an utility offers workflow capabilities to realize a selected goal, whereas an working system acts as an interface between the consumer and {hardware} that controls the foundations by which purposes operate and the sources it has entry to.
Take into account that whereas medical doctors 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 educated, paid and busiest workers work together with day-after-day, rendering it the only most necessary system; the info entered by clinicians shops affected person data and related data 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 rivals, together with:
- MyChart footprint: The federal Significant Use Program required hospitals to make use of EHRs that offered a affected person portal. Right now, Epic’s MyChart boasts between 190M and 300M shopper accounts, an unimaginable early benefit given the rising utilization of non-public well being data.
- 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 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 present prospects 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 prospects.
In accordance with hospital and trade executives, Epic is within the means of pulling all of those levers. And whereas some rivals could complain about these built-in benefits, the fact is that Epic is dominant within the inpatient EHR marketplace for good cause, and it’s a wise 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 imply a silly or incompetent individual, a time period Epic has determined to use to a few of its prospects. On the firm’s 2022 consumer group assembly, Judy Faulkner launched the time period “you’re by yourself” (yoyo) to discuss with Epic hospital prospects who wished 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 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. Per this need are Epic supplies that clearly display characteristic divergence for patrons adopting its most well-liked ‘Customized’ model of MyChart versus characteristic discrimination for these ‘yoyo’ prospects.
2. Altering Charge Construction For ‘Yoyos’ and Elevating Costs To Steer to MyChart: In accordance 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 purposes 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’ prospects 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 may improve the related MyChart charges by a number of thousand p.c, 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 assist prices, the spokesperson famous, “With ‘You’re On Your Personal,’ prospects can select to license extra instruments that permit their builders to embed components of MyChart into their very own buyer purposes.”
3. Eliminating Preexisting Interoperability Entry: Epic had traditionally supported its ‘yoyo’ prospects, partly, by offering MyChart integration and interoperability sources to distributors that these prospects select to work with for consumer-facing purposes. With the introduction of its nationwide MyChart technique, nevertheless, Epic has begun proscribing entry to these sources. In some instances, 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 can 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 overview of an Epic e-mail response to a person requesting the standing of beforehand obtainable sources, what Epic seems to be doing in some instances is withdrawing utility programming interfaces (APIs) from its open.epic website, 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 aren’t revealed or discoverable. A vendor searching for to use to this program should first fill out and submit a questionnaire, however Epic offers no steering on what the standards for inclusion or exclusion are, nor the way it determines what API sources will likely be obtainable or to whom. This follow 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 Expertise is a department of the U.S. Division of Commerce. Its IAL2 customary is meant to permit for distant id proofing, which is critical to enabling a future through 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 purposes of their option to entry their data is a precedence for ASTP/ONC, the federal company chargeable for selling interoperability. Epic introduced 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 data.
Some trade 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 improve charges Epic costs 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 end in any extra costs to our prospects, and is unlikely to draw new customers to MyChart.”
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Individually, every tactic could assist a authentic enterprise function. As an illustration, whereas “yoyo” may appear a crude time period, it’s according to Epic’s typically playful and artistic naming conventions. Altering its price construction could replicate Epic making a course correction to a pricey approach of supporting prospects, as an Epic spokesperson prompt. And as trade insider and analyst Brendan Keeler has famous, Epic is a chief amongst EHRs in terms of enabling particular person entry companies, so it’s onerous to critique.
Taken altogether, nevertheless, the collective techniques are sufficient to have some trade 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 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 could 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 shopper conduct. Most related often is the Microsoft lawsuit, through which Microsoft was discovered to be illegally using its dominant place as an working system to exclude rivals within the rising internet browser market. And the more moderen case in opposition to Google, through which Decide 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 present APIs and interoperability sources to consumer-facing firms and altering price buildings, 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 outcome, additionally problematic for Epic, is diminished shopper alternative and elevated direct prices (to hospitals) and oblique prices (to rivals and shoppers).
But, Epic arguably doesn’t have to make use of these techniques to win. MyChart appears well-positioned to finish up as essentially the most strong, seamless and compelling ecosystem for shoppers on account of Epic’s trusted relationships with hospitals, dominant market share and present (and rising) community results.
In the intervening time and absent any drive majeure stopping Epic from executing its plan, it appears to be like 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 searching for to entry shoppers for whom Epic can be the default “digital entrance door”.
If you happen to work in Verona Wisconsin, this can be a good factor. Perhaps too, should you’re a shopper.
Seth Joseph is the Founder and Managing Director of Summit Well being Advisors
