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From Epic Staffer To Epic Consultant

Posted on May 11, 2016 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

Since many readers may have considered such a move, I was interested to read an interview with a woman who had transitioned from an Epic-based staff position at hospital to a consulting gig. Here are some of the steps she took, which offer food for thought for those who might want to follow in her footsteps.

Prior to going into Epic consulting, Pam (no last name given) had worked full time as a Clindoc/Stork analyst, specializing in Reporting Workbench and Radar dashboards. The hospital where she worked with deploying Epic for the first time as their EMR solution, a three-year project spanning 14 hospitals in her health system. Prior to that, Pam had worked in both IT and in the ICU as an RN.

Before she agreed to take the consulting position, which requires her to travel to the northeast once a week, Pam weighed the effect all the required travel would have on her spouse and family, as well as her elderly parents and in-laws.

She also bore her financial situation in mind. While she knew she could earn more as an Epic consultant than she could as a staff member, she also wouldn’t have access to company benefits such as retirement plans, health insurance, and paid sick days and vacation time. (Now that she’s consulting, Pam works with a financial analyst to create a personal retirement plan.)

To market herself as a consultant, Pam began by updating a resume to reflect the most current experience, including, obviously, her Epic experience. She researched Epic consulting firms in sent her resume to those that seemed appropriate. She also pulled together her personal and professional references, getting their permission to be contacted by firms interested in learning more about her. Then she worked with recruiters and consulting firms to capture her desired position.

One cautionary note from her story: Despite her experience level, as well as her having obtained in additional Epic proficiency and badge, she didn’t get a job immediately. In fact, it took her seven months to find an opportunity that fit her skills, a period she calls “long and difficult.” But she tells the interviewer that all the effort was worth it.

A few comments from the peanut gallery: While Pam has done well, the ending of the story — that she ended up waiting nearly a year to get her Epic job — came as a surprise to me. Yes, we are not in the absolute heyday of Epic consulting, as we were a few years ago, I would’ve assumed that an experienced professional with both clinical and IT background would’ve been snapped up much more quickly.

After all, while most hospitals may have made their big initial EMR outlay, maintaining those bad boys is an ongoing issue, and last I heard few have the resources to do so without outside help. Not only that, I doubt Epic has begun to hand out certifications like fortune cookies.

So why would there be a glut of Epic consultants, if there is in fact one? All I can think is that 1) the prevalence of Epic installations has led to more trained people being available, and 2) that hospitals have figured out how to maintain their Epic systems without as much outside help as they once had.

Either way, there may be a warning in this otherwise upbeat story. If you are thinking about hanging out your shingle as a Epic consultant, you may want to check out demand before you do. You may also want to spend some time searching through the Epic and other Healthcare IT jobs on Healthcare IT Central.

Is An Epic Investment Bad For Health Leaders’ Job Stability?

Posted on January 28, 2016 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

For quite some time now, the buzz has been that at least one EMR vendor was a safe bet for everyone involved. “No one ever got fired for choosing Epic” has begun to seem as obvious a sentiment as “No one ever got fired for choosing IBM” in hospital C-suites. And certainly, in previous times that was probably true.

But it’s beginning to look as though at least in some cases, Epic has not been as safe a choice as health execs had hoped. In fact, while it’s not exactly a fully-fledged trend, it’s worth noting that Epic-related costs and technical issues have led to job losses for hospital CIOs, as well as other operational leaders, in recent times.

Perhaps the most recent example of Epic-related job attrition took place earlier this month, when the chief information officer and chief operating officer of Denver Health Medical Center. According to the Denver Post, the two executives left their posts in the wake of major disagreements over the medical center’s big investment in an Epic EMR.

The Denver Post story reports that former Denver Health CIO Gregory Veltri was on the outs with CEO Arthur Gonzalez from the outset where Epic was concerned. Apparently, Veltri argued from the get-go that the Epic install costs — which he estimated could hit $300 million when the $70 million cost of dumping the center’s current EMR contract and doubling of its IT staff were computed — stood a chance of bankrupting the hospital. (Gonzalez, for his part, claims that the Epic installation is under budget at $170 million, and says that the system should go live in April.)

In another example of Epic-related turnover, the chief information officer at Maine Medical Center in Portland seems to have left his job at least in part due to the financial impact of the hospital’s $160 million Epic investment. Admittedly, the departure of CIO Barry Blumenfeld may also have been related to technical problems with the rollout which slowed hospital collections. This took place back in 2013, but it still seems noteworthy.

The spring of 2013 also saw the departure of Sheila Sanders, the chief information officer for Wake Forest Baptist Medical Center, in the midst of the medical center’s struggles to implement its own Epic system. While Wake Forest Baptist had spent a comparatively modest $13.3 million on direct Epic costs during its second quarter of fiscal 2012-13, the medical center had been socked by delays in revenue resulting to Epic rollout problems, including issues with billing, coding and collections.

Wake Forest Baptist reported taking an $8 million hit that quarter due to “business-cycle disruptions (that) have had a greater-than-anticipated impact on volumes and productivity.” It also reported $26.6 million in lost margin due to reduced volume during go-live and post go-live Epic optimization.

Of course, a botched rollout can mean job insecurity no matter what EMR the hospital has chosen. For example, in May of 2014, Athens Regional Medical Center President and CEO James Thaw was apparently pressured out of office when the facility’s Cerner rollout went poorly. (After weeks of Cerner problems, the hospital’s staff voted 270-0 that they had “no confidence” in the hospital’s leadership. Gulp!) Somehow, Senior Vice President and CIO Gretchen Tegethoff kept her job, but my bet is that it was a close-run thing.

And to be fair, this is obviously a small, selected set of anecdotes about questionable Epic rollouts. They don’t prove that Epic is a CIO job killer or an ineffective EMR. But these stories do highlight the fact that while Epic investments might yield good things, rolling Epic out requires nerves of steel and flawless execution.

Epic EMR Costs Drag Down Finances At Brigham and Women’s

Posted on January 4, 2016 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

It’s worth noting from the outset that many healthcare organizations have had it worse. Epic installs have blown health system budgets sky high, sapped their profitability and undermined their credit ratings. So upon hearing the following you may not be tempted to play a sad song on the world’s smallest violin.

Still, it’s worth noting that in part due to the costs of its Epic implementation, the venerable Brigham and Women’s Hospital will fall $53 million short of its expected $121 million surplus for fiscal 2015. According to news reports, this is the first time Brigham and Women’s has missed such a target in more than 10 years.

The hospital’s president, Betsy Nabel, MD, noted that the Brigham and Women’s install is part of a massive $1.2 billion Epic implementation cutting across the 10 hospitals of the Partners HealthCare system. The broader Partners implementation is proving to be a budget-buster as well. Three years ago, Partners went into the effort with a comparatively scant $600 million budget.

Brigham and Women’s — along with nearby Dana-Farber Cancer Institute — hired 1,500 extra staff members to help with the Epic go-live, which took place in June of this year. The Brigham had budgeted $47 million during the previous year to pay for the transition costs.

But the transition cost $27 million more than expected. For one thing, once they began using the EMR, Brigham and Women’s staff apparently undercoded a bunch of visits, lowering patient care revenues.  The hospital also gave up some revenue voluntarily, by cutting back on patient volume during the first months post-go-live to ease the transition.

The rest of the shortfall came from lost patient volume in February due to heavy snowfall, as well as paying more than it had expected into its employee pension fund.

A few words of commentary seem called-for here.

* It’s not clear to me why the staffers made so many coding mistakes going out the door with the new install. I’ve written about perhaps a dozen Epic installs in depth, and have studied many more, and a rash of post-implementation coding mistakes doesn’t seem to be common. Am I missing something, or were the staffers undertrained?

* News reports suggest that nearly $14 million of the unexpected costs came from the planned reductions in patient care volume. It seems to me that if Brigham and Women’s execs planned for that shortfall, they’d know how much it was going to be. Why all of the surprise already?

By the way, the shortfall apparently kicked up so much dust that Dame Judy personally flew out to Boston to meet with the hospital leadership to head off PR trouble offer guidance.

Following the meeting, hospital president Dr. Betsy Nabel told a town hall-style gathering that all is well — that the coding problems will pass and revenue levels reestablish themselves. And after all, she noted, the Epic install is already working well enough that there’s been no increase in medical errors at the hospital.

Well, that’s a start at least. Keeping medical errors from getting worse is certainly a good thing. But for its sake, let’s hope the Brigham expects more than that from Epic!

Antitrust In The Brave New EMR World

Posted on September 18, 2015 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

Late last month, former Brigham and Women’s Hospital CEO Paul Levy made waves in the health IT world when he accused Epic of conspiring with Boston healthcare system Partners HealthCare.

In a post on his wryly-named Not Running a Hospital blog, Levy argues that Epic’s relationship with Partners raises antitrust concerns:

Here’s how it works.  Partners enters into a contract with Epic for the construction of an EHR for its facilities.  The two organizations go to the Partners-affiliated, but independent, medical practice groups and tell them that they have to install the Epic EHR–even if the EHR they have had for years is perfectly adequate for their purposes.  If a doctor’s practice asks why they can’t keep their old system, Epic makes clear that interoperability between its system and the practice’s legacy system is not feasible.  Meanwhile, to clinch the conversion, Partners also informs the local practices that failure to install the Epic system will foreclose those practices from participating in the favorable insurance contracting relationships it enjoys.  It is in this manner that the Epic-Partners actions box out the competition in this market.

In his article, Levy calls on Massachusetts Attorney General Maura Healey, and attorneys general of other states for that matter, to be on the lookout for similar deals between Epic and health systems elsewhere.

Interestingly, in other cases health systems accused of seeking excessive market power have used their Epic investment as a defense. For example, when its 2012 acquisition of Nampa, ID-based Saltzer Medical Group was challenged by the FTC, Boise health system St. Luke’s cited its $200M Epic system as a mitigating factor. Its lawyers asserted that St. Luke’s investment in effort was proof that the health system would be able to improve the region’s healthcare by better care coordination.

But the argument didn’t fly with the FTC, which didn’t believe that tying employed doctors to an EMR was needed to generate regional healthcare efficiencies. “Shared access to electronic medical records that St. Luke’s cited as a central benefit of the transaction can be achieved without an employment relationship or merger,” said Deborah Feinstein, director of the FTC’s Bureau of Competition at a speech given last year.

In my opinion, both Levy and Feinstein make excellent points. If Levy is right, it can easily be argued that Partners and Epic are engaging in questionable behavior, as it troubles at least this non-lawyer to see doctors strongarmed into using any particular EMR. And given that St. Luke’s was in the process of building a program to coordinate with unaffiliated physicians, it does seem that crying “we have Epic!” doesn’t address the problem.

But these are just bullet points. Overall, my sense is that neither state attorneys general nor the FTC and DoJ are sure how EMRs impact a health system’s market power, nor what constitutes anticompetitive behavior on the part of a vendor. I don’t know whether regulators don’t see EMR issues as a priority or are simply biding their time, but from my standpoint they are more than ripe for attack. What do you think?

EMR Vendors Slow To Integrate Telemedicine Options

Posted on August 27, 2015 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

Despite the massive growth in demand for virtual medical services, major EMR vendors are still proving slow to support such options, seemingly ceding the market to more agile telemedicine startups.

Independent telemedicine vendors targeting consumers are growing like weeds. Players like Doctor on Demand, NowClinic, American Well and HealthTap are becoming household names, touted not only in healthcare blogs but on morning TV talk shows. These services, which typically hire physicians as consultants, offer little continuity of care but provide a level of easy access unheard of in other settings.

Part of what’s fueling this growth is that health insurers are finally starting to pay for virtual medical visits. For example, Medicare and nearly every state Medicaid plan also cover at least some telemedicine services. Meanwhile, 29 states require that private payers cover telehealth the same as in-person services.

Hospitals and health systems are also getting on board the telemedicine train. For example, Stanford Healthcare recently rolled out a mobile health app, connected to Apple HealthKit and its Epic EMR, which allows patients to participate in virtual medical appointments through its ClickWell Care clinic. Given how popular virtual doctor visits have become, I’m betting that most next-gen apps created by large providers will offer this option.

EMR vendors, for their part, are adding telemedicine support to their platforms, but they’re not doing much to publicize it. Take Epic, whose EpicCare Ambulatory EMR can be hooked up to a telemedicine module. The EpicCare page on its site mentions that telemedicine functionality is available, but certainly does little to convince buyers to select it. In fact, Epic has offered such options for years, but I never knew that, and lately I spend more time tracking telemedicine than I do any other HIT trend.

As I noted in my latest broadcast on Periscope (follow @ziegerhealth), EMR vendors are arguably the best-positioned tech vendors to offer telemedicine services. After all, EMRs are already integrated into a hospital or clinic’s infrastructure and workflow. And this would make storage and clinical classification of the consults easier, making the content of the videos more valuable. (Admittedly, developing a classification scheme — much less standards — probably isn’t trivial, but that’s a subject for another article.)

What’s more, rather than relying on the rudimentary information supplied by patient self-reports, clinicians could rely on full-bodied medical data stored in that EMR. I could even see next-gen video visit technology which exposes medical data to patients and allows patients to discuss it live with doctors.

But that’s not how things are evolving. Instead, it seems that providers are largely outsourcing telemedicine services, a respectable but far less robust way to get things done. I don’t know if this will end up being the default way they deliver virtual visits, but unless EMR vendors step up, they’ll certainly have to work harder to get a toehold in this market.

I don’t know why so few EMR companies are rolling out their own virtual visit options. To me, it seems like a no-brainer, particularly for smaller ambulatory vendors which still need to differentiate themselves. But if I were an investor in a lagging EMR venture, you can bet your bottom dollar I’d want to know the answer.

Would Cerner DoD Loss Seal Its Fate As An Also-Ran?

Posted on July 29, 2015 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

Update: Cerner has been announced as the winner of the DoD EHR Contract.

As everyone knows, Epic has attained a near-unbeatable place in the race for U.S. hospital market share. By one important criterion, Meaningful Use attestations, Epic has the lead hands down, with about 186,000 attestations as of March 2015 compared with 120,331 attestations on Cerner systems.

That being said, Cerner is hardly an insignificant force in the hospital EMR marketplace. It’s a multibillion-dollar powerhouse which still holds a strong #2 position and, if a casual survey of Web and social media commentary is to be believed, has done far less to alienate its customers with high-handed tactics. And while Cerner systems are far from cheap, you don’t regularly see headlines citing a Cerner investment as pivotal in a hospital’s credit rating taking a pratfall. Also, Cerner has the most contracts with MU-eligible hospitals, holding contracts with about 20% of them.

Nonetheless, there’s an event looming which could tip the scales substantially further in Epic’s direction. As many readers know, Epic is part of a team competing for the Department of Defense’s $11B Healthcare Management Systems Modernization contract (Word on the street is that we could hear the winner of the DoD EHR bid this week). I’d argue that if Epic wins this deal, it might have the leverage to push Cerner’s head under water once and for all.  Cerner, too, is fighting for the deal, but if it wins that probably won’t be enough to close the gap with Epic, as it’s harder to play catch up than to zoom ahead in a space you already control.

Now my colleague John argues that winning the DoD contract might actually be bad for Epic. As he sees it, losing the DoD deal wouldn’t do much damage to its reputation, as most hospital leaders would understand that military healthcare bears little resemblance to commercial healthcare delivery. In fact, he contends that if Epic wins the contract, it could be bad for its customers, as the Verona, Wisc.-based giant may be forced to divert significant resources away from hospital projects. His reasoning makes sense.

But losing the DoD contract would almost certainly have a negative impact on Cerner. While Epic might not suffer much of an image loss if it loses the contest, Cerner might. After all, it doesn’t have quite the marquee list of customers that Epic does (such as the Cleveland Clinic, Massachusetts General Hospital, Mayo Clinic and the Johns Hopkins Hospital). And if Cerner’s rep suffers, look out. As a surgeon writing for investor site Seeking Alpha notes, the comparatively low cost of switching TO Cerner can just as easily be used as a reason to switch AWAY FROM Cerner.

What’s more, while Cerner’s acquisition of Siemens’ health IT business — adding the Soarian product to its stable — is likely to help the company differentiate itself further going forward, but that’s going to take a while.  If Cerner loses the DoD bid, the financial and PR hit could dampen the impact of the acquisition.

Net-net, I doubt that Cerner is going to lie down and play dead under any circumstances, nor should it. Epic may have a substantial advantage but there’s certainly room for Cerner to keep trucking. Still, if Cerner loses the DoD bid it could have a big impact on its business. Now is the time for Cerner to reassure current and potential customers that it’s not planning to scale back if Epic wins.

Why Not “Meaningful Interoperability” For EMR Vendors?

Posted on July 28, 2015 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

At this point, arguably, Meaningful Use has done virtually all of the work that it was designed to do. But as we all know, vendors are behind the curve. If they aren’t forced to guarantee interoperability — or at least meet a standard that satisfies most interconnectivity demands — they’re simply not going to bother.

While there’s obviously a certification process in place for EMR vendors which requires them to meet certain standards, interoperability seemingly didn’t make the cut. And while there’s many ways vendors could have shown they’re on board, none have done anything that really unifies the industry.

PR-driven efforts like the CommonWell Alliance don’t impress me much, as I’m skeptical that they’ll get anywhere. And the only example I can think of where a vendor  is doing something to improve interoperability, Epic’s Care Everywhere, is intended only to connect between Epic implementations. It’s not exactly an efficient solution.

A case in point: One of own my Epic-based providers logged on to Care Everywhere a couple of weeks ago to request my chart from another institution, but as of yet, no chart has arrived. That’s not exactly an effective way to coordinate care! (Of course, Epic in particular only recently dropped its fees for clinical data sharing, which weren’t exactly care coordination-friendly either.)

Increasingly, I’ve begun to think that the next stage of EMR maturation will come from some kind of “Meaningful Interoperability” incentive paid to vendors who really go the extra mile. Yes, this is iffy financially, but I believe it has to be done. As time and experience have shown, EMR vendors have approximately zero compelling reasons to foster universal interoperability, and perhaps a zillion to keep their systems closed.

Of course, the problem with rewarding interoperability is to decide which standards would be the accepted ones. Mandating interoperability would also force regulators to decide whether variations from the core standard were acceptable, and how to define what “acceptable” interoperability was. None of this is trivial.

The feds would also have to decide how to phase in vendor interoperability requirements, a process which would have to run on its own tracks, as provider Meaningful Use concerns itself with entirely different issues. And while ONC might be the first choice that comes to mind in supervising this process, it’s possible a separate entity would be better given the differences in what needs to be accomplished here.

I realize that some readers might believe that I’m dreaming if I believe this will ever happen. After all, given the many billions spent coaxing (or hammering) providers to comply with Meaningful Use, the Congress may prefer to lean on the stick rather than the carrot. Also, vendors aren’t dependent on CMS, whose involvement made it important for providers to get on board. And it may seem more sensible to rejigger certification programs — but if that worked they’d have done it already.

But regardless of how it goes down, the federal government is likely to take action at some point on this issue. The ongoing lack of interoperability between EMRs has become a sore spot with at least some members of Congress, for good reasons. After all, the lack of free and easy sharing of clinical data has arguably limited the return on the $30B spent on Meaningful Use. But throwing the book at vendors isn’t going to cut it, in my view. As reluctant as Congressional leaders may be to throw more money at the problem, it may be the only way to convince recalcitrant EMR vendors to invest significant development resources in creating interoperable systems.

Partners Goes With $1.2B Epic Installation

Posted on June 2, 2015 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

After living with varied EMRs across its network for some time, Boston-based Partners HealthCare has decided to take the massive Epic plunge, with plans to spend an estimated $1.2 billion on the new platform. That cost estimate is up from the initial quite conservative spending estimate from 3 years ago of $600M, according to the Boston Globe.

As is always the case with an EMR install of this size, Partners has invested heavily in staff to bring the Epic platform online, hiring 600 new employees and hundreds of consultants to collaborate with Epic on building this install. The new hires and consultants are also tasked with training thousands of clinicians to navigate the opaque Epic UI and use it to manage care.

The move comes at the tail end of about a decade of M&A spending by Partners, whose member hospitals now include Brigham & Women’s Hospital, Massachusetts General Hospital, the Dana-Farber Cancer Institute, McLean Hospital, Spaulding Rehabilitation Hospital and the North Shore Hospital.

The idea, of course, is to create a single bullet-proof record for patients that retains information no matter where the patient travels within the sprawling Partners network. Partners can hardly manage the value-based compensation it can expect to work with in the future if it doesn’t have a clear patient-level and population level data on the lives it manages.

Even under ideal circumstances, however, such a large and complex project is likely to create tremendous headaches for both clinical and IT staffers. (One might say that it’s the computing equivalent of Boston’s fabled “Big Dig,” a gigantic 15-year highway project smack in the middle of the city’s commuting corridor which created legendary traffic snarls and cost over $14.6 billion.)

According to a report in Fortune, the Epic integration and rollout project began over the weekend for three of its properties, Brigham & Women’s, Faulkner Hospital and Dana Farber. Partners expects to see more of its hospitals and affiliated physician practices jump on board every few months through 2017 — an extremely rapid pace to keep if other Epic installs are any indication. Ultimately, the Epic install will extend across 10 hospitals and 6,000 doctors, according to the Globe.

Of course, the new efforts aren’t entirely inward-facing. Partners will also leverage Epic to build a new patient portal allowing them to review their own medical information, schedule appointments and more. But with any luck, patients will hear little about the new system going forward, for if they do, it probably means trouble.

Is Epic Too Big To Fail?

Posted on May 27, 2015 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

While there’s a chance an Epic purchase can endanger a hospital’s financial health, I’ve never heard a whisper of gossip suggesting that Epic is in financial trouble.

In fact, it appears virtually unstoppable. Though Epic is a private company, and doesn’t disclose its financial information, its 2014 revenue was estimated at $1.75 billion, up from $1.19 billion in 2011. And despite the fact that the hospital EMR market is getting saturated, the giant EMR vendor is doing quite nicely with the estimated 15% to 20% of the market it is reported to hold.

Still, what would happen if Epic took a body blow of some kind and stopped being able to support the implementation and operation of its products?  After all, buying an EMR isn’t like picking up, say, a fleet of trucks that the hospital services and maintains. For years — sometimes a decade — after a hospital goes with Epic, that hospital is typically reliant on Epic to help keep the EMR lights on.

Which brings me to my core question: Is Epic too big to fail? Would it create such a disaster in the healthcare market that the U.S. government should step in if Epic ever had a massive problem meeting its commitments?

As little as I like saying so, there’s a strong argument to be made that Epic simply can’t be allowed to stumble, much less crumble.

As of April 2014, Epic reportedly had 297 customers, a number which has undoubtedly grown over the past year. What’s more, 70% of HIMSS Analytics Stage 7 hospitals, i.e. hospitals for which their EMR is absolutely mission critical, use the EpicCare inpatient EMR.

If Epic were to face some financial or operational disaster that prevented it from supporting its hospitals customers, those hospitals would be very compromised. Epic’s customers simply couldn’t leap abruptly to, say, a competing Cerner system, as the transition could take several years.

Depending how far along in their Epic install and launch they were, hospitals might try to limp along with the technology they had in place, switch temporarily to paper records or try to keep their progress going with whatever Epic consultants they could find.

In an effort to recover from the loss of Epic support, hospitals would be forced to bid high for the services of those consultants. Hospitals could have their IT budgets decimated, their credit harmed or even be driven out of business.

In the crazy shuffle that would follow, there’s little doubt that many medical errors would occur, some serious and some fatal. It’s impossible to predict how many errors would arise, of course, but I think it’s easy to argue that the number would be non-trivial.

Given all this, the feds might actually be forced to step in and clean up Epic’s mess if it made one. Mind you, I’m not saying that, say, HHS has such a plan in place, but perhaps it should.

Ultimately, I think the healthcare industry ought to do some self-policing and find some ways to reduce its reliance on a single, frighteningly-powerful vendor. Over time, I believe that will involve gradually shifting away from reliance on existing EMRs to next-gen EMRs built to support value-driven payment and population health analysis. In the mean time, we’d better hope nobody drops a giant rock on Epic’s executive headquarters.

Erlanger Health System Takes A Chance On $100M Epic Plunge

Posted on May 11, 2015 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

The seemingly eternal struggle between EMR giants Cerner and Epic Systems has ended in another win for Epic, which was the final choice of Chattanooga, TN-based Erlanger Health System. The health system’s CEO, Kevin Spiegel, who said that Cerner had been its other finalist, announced last week that Erlanger would spend about $100 million over 10 years for the Epic installation.

Erlanger, a four-facility public hospital system with about 800 total beds, is an academic medical system and serves as a campus of the University of Tennessee College of Medicine. The system also partners with UT to operate the UT Erlanger Physicians Group, a 170-member multispecialty practice.

The health system, which fell in financial trouble in 2012, only recently saved itself and positioned itself for the massive Epic investment. It closed out FY 2014 with $618M in total operating revenue and $18M in operating income.

Erlanger’s turnaround is all well and good. But that being said, these numbers suggest that Erlanger is making something of a gamble by agreeing to an approximately $10M a year health IT investment. After all, the health system itself concedes that its return to financial health came in large part due to $20 million in new Medicare and Medicaid funding from CMS, along with new funding from the state’s Public Hospital Supplemental Payment Pool. And politically-obtained funds can disappear with the stroke of a pen.

The risky nature of Erlanger’s investment seems even more apparent when you consider that the system has an aggressive building plan in place, including a new orthopedic center, a $68M expansion of one of its hospitals, a 100,00 square foot children’s & women’s ambulatory center and a new health sciences center. Particularly given that Erlanger just completed its turnaround last year, does it make sense to squeeze in Epic payments alongside of such a large capital investment in infrastructure?

What’s more, the health system has a bond rating to rehabilitate. Faced with financial hardships in 2013, its bond rating was downgraded by Moody’s to a Baa2 and the system’s outlook was rated “negative.” By 2014, Erlanger’s had managed to boost the Moody’s outlook to “stable,” in part due to the influx of state and federal funds obtained by Erlanger execs, but the Baa2 rating on its $148.4 million in bond debt stayed in place.

While I imagine the hospital will realize a return on its Epic spending at some point, it’s hard to see it happening quickly.  In fact, I’d guess that it’ll be years before Erlanger’s Epic install will be mature enough to be evaluated for ROI, given the level of effort it takes to build a mature install.

In the meantime, Erlanger leaders may be left wondering, from time to time at least, whether they really can afford their expensive new EMR.