H.I.S.-tory

– by Vince Ciotti

© 2013 by H.I.S. Professionals, LLC, all rights reserved.

Episode #98:

EpicPart 4

How Did They Do It?

• Just how did Epic win these hundreds of large systems over the past few years?

Was It Tough Leadership?• Seldom in the annals of HIS-tory has one vendor dominated a

market niche like Epic has among large IDNs & AMCs over the past few years. The fascinating question is - just how did they do it?

• It wasn’t just their leader, Judy Faulkner, who clearly rules the roost in Verona (check out this men’s room picture!); she is much more polite and considerate than many vendor CEOs I have worked for: – Jim Macaleer - at SMS had everyone

in King of Prussia terrified of him…– Chuck Barlow - at McAuto was much

nicer, but clearly “ruled” his HSD!– George Weinberger - at HIS Inc. in

Brooklyn, brilliant but demanding.– Jim Pesce – at Micro Healthsystems –

fun over a beer, but ‘da man at work!– Don’t forget Neal’s 5PM pizza memo!

Was It Sales & Marketing?• The success of many other HIS vendors was due in a large part to

their S & M (sic) executives, who combined personal charisma with an uncanny feel for what the market wants to hear, such as:

– Harvey Wilson – who built the most awesome S&M machine in HIS-tory at SMS, and then repeated it at Eclipsys!

– Art Randall – at McAuto, who sold one-on-one, charmed on the podium, and wrote hundreds of magazine articles…• And there are scores more whose stories would take to long to tell,

both mavens from the past as well as S&M powerhouses of today:– Past = Bob Pagnotta at MDS, Mike Smeraski at Eclipsys, Frank

Pecaitis at Compucare, Mike Freeman at HMS, etc. – Today = Stu Lefthes at Meditech, Jim Hall at McKesson Paragon,

Troy Rosser at CPSI, Cristi Guthrie at NextGen, etc.• But as we saw last week, Epic’s philosophy is “Marketing Sucks”!?!?

Was It Price?• Dominant vendors of earlier epochs in HIS often used price/

performance to separate them form their competitors, e.g.:– Shared systems in the 70s made access to a monster

mainframe affordable to small & mid-size hospitals who could not afford the 7-figure capital costs from IBM & the “BUNCH.”

– Minicomputers in the 80s ran in the 6-figures, finally affordable to run inhouse.

– And micros in the 90s were so cheap that even critical access hospitals bought them.

• Yet, ironically, Epic is clearly the more expensive route to go, as can be attested by any CIO who ran thorough and complete TCO calculations including required staff in user departments…- Much like IBM in the 60s – far more expensive than

Burroughs, Univac, NCR, CDC, Honeywell, GE and RCA.- But then, a Lexus costs more than a Toyota (with similar parts)

Was It Architecture?• Many past leading vendors rode the waves of technological

breakthroughs to achieve market dominance in their niche, viz:– SMS, McAuto & Tymshare sold over a thousand hospitals

during the halcyon days of shared systems back in the 1970s.– HBO, Dynamic Control and a dozen others rode the wave of

turnkey minis to sell thousands more in the 1980s & 1990s… – At HIS Inc. in Brooklyn, (today part of Siemens as Eagle) we hit

IBM’s mainframe clients with software for their 30XX & 43XXes• Today, many leading vendors stress their technology approach:

– Meditech has brilliantly re-invented itself every few years with a new underlying platform: MUMPS, MIIS, NT, Magic, C/S, 6.0

– Siemens has made semantic breakthroughs every decade with a new name for time-sharing: RCO, Remote Hosting, “Cloud…”

– Cerner’s amazing rise to be the #2 vendor in revenue can be attributed in large part to their shift to remote ho$ting…

Is Epic “Open?”• There is a constant debate about the word “Open” and what it

means to hospitals and vendors, depending on their perspective:– Most CIOs would like it to mean a system based on an ODBC-

compliant data base such as Oracle (Cerner) or SQL (Paragon), along with an “open” operating system such a UNIX or LINUX.

– Such systems make it far easier to build interfaces (with or without an IE), download files to user PCs, and sort/create custom reports of “their” data (on the “vendor’s” system!?).

• How does Epic rate in this regard? Like most controversial issues we humans fight about, there is a large grey swath of answers:

- With ≈300 of the largest AMCs & IDNs as clients, Epic must readily interface to PACS vendors, standalone LIS-es, etc.

- But is it easier to do it with MS’ Windows & SQL than with MIIS and Chronicles? Depends on who you ask: a client that has done it already, or a competitor losing to them regularly.

The Answer?• From my perspective watching so many vendors over so many

years, the magic (pun intended) lies in this chart from Epic detailing the history of their products (“solutions” in newspeak):

• All other HIS vendors today are either “inpatient” the upper part on the chart, like McKesson, Cerner, Siemens, Meditech, GE…

• Or “ambulatory” (an odd term since every hospital treats outpatients too – maybe s.b. “practice”?): Allscripts, NextGen, ECW, Athena, Greenway, etc.

• Yes, many bought the other side (eg: Allscripts/Eclipsys, GE/IDX…) but the integration is in their marketing material, not the systems.

True Integration• Only Epic can give a physician the identical system (passwords,

screens, menus, reports, data, alerts…) to use in the hospital in the morning, as they use so well in their practice that afternoon.– And to continue on the S&M theme, a MD is to a hospital what

a salesman is to a vendor: they bring in the bucks!• Most HIS competitors offer two different systems,

developed/bought from/by different sources (like GE/IDX, Allscripts/Eclipsys, NextGen/Opus, Meditech/LSS, etc), or one fully developed versus one due in the famous “4th quarter” of some upcoming year (eg: Millennium rocks in hospitals, but rolls in physician practices; Soarian soars in hospital clinicals, but crawls in practices & RCM)– And when you’re buying an EMR &

CPOE, there is no more important user constituency than the medical staff, who have to live with it 24/7, and who have the most clout with your C-Suite.

Any Weaknesses?• So, is Epic perfect, and will they continue to win every large

AMC/IDN deal forever? Heck no, just look at the following evidence:– The population of Verona was

10,619 per the 2010 census. Can’t these people count?

– Look closely: ugly weeds all over the front lawn at Epic’s “Intergalactic Headquarters!” Don’t they care?

– Only two cookies? Last vendor HQ that I visited took me to dinner with fine wine at a classy French place in town…

– Solar panels, in Wisconsin’s cloudy/short winter days? These people must be out of their frozen minds…

The Other Side of the Coin• Yes, Virginia, there are humans in Verona and Epic has its share of

problems; to refute those who claim I drank too much kool-aid:– Rookies – I’ll never forget the damage I did to poor St.

Vincent’s Hospital in Staten Island when I was a bright but “green” ID at SMS in 1970 who couldn’t tell a debit from a credit, and thought charge tickets were for credit cards!

– Costs – could easily do a page of headlines of some Epic projects that have run over budget, some in 7 and 8 figures or more! Of course, many come in on time and under budget...

– Weak Apps – even the most hard-working and creative HIS programmers in the world can’t make a better LIS than a vendor that does nothing but Lab, like Soft or Sunquest…

• But then we could go on with the pros & cons of every HIS vendor and miss the whole point of this HIS-tory: who are these vendors and where did their products come from? The next slide shows clearly what distinguishes Epic from most other vendors:

Vive La Difference!• Remember the monstrously complex bar charts needed to show

the origin of so may other vendors, such as last week’s Allscripts:

Epic’s HIS-tory• Here’s the equivalent roots and evolution of Epic through it’s many

mergers & acquisitions, and the convoluted origin of its products:

• Next week, on to Siemens (#3 vendor in revenue), for which I need some help: anyone know the origins of IBM’s SHAS (pre-SMS)????- vciotti@hispros.com, or if you’re as old as me: (505)466-4958