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Bill Gurley asserts that Epic rigged the system and Social Media concurs. The Internet is ablaze with this narrative, unfortunately it's wrong. A little research will point out that Bill just glossed over the details and started knitting things together that don't go together. Today we explore.

Transcript

Today in health, it we're going to explore why epic is so dominant in the HR space, you know, every now and then I run into a post that gets it so wrong. That I thought I would have to address it. And there's a post out there right now. If you've ever wondered why epic is so dominant in the healthcare industry, bill Gurley, who is a reputable investor, does an amazing job documenting. It in a 36 minute video on regulatory capture. Unfortunately, bill Gurley while brilliant in a lot of areas is really not that brilliant in this area. And I'm going to explain why. My name is bill Russell. I'm a former CIO for a 16 hospital system and creator of this week health. A set of channels and events dedicated to leveraging the power of community to propel healthcare forward. We were, thank our show sponsors who were investing in developing the next generation of health leaders. Short test artist, site parlay it's certified health, notable and service. Now check them out at this week. health.com/today. Having a child with cancer is one of the most painful and difficult situations a family can face in 2023 to celebrate five years at this week, health. We are working to give back. We have partnered with Alex's lemonade stand all year long. We set a goal to raise $50,000 and you did not disappoint. We are up over $50,000 for the year. In fact, we're up over 55,000 now. And, , we want to plow through that number. We ask you to join us, hit our website and the top right-hand column.

You're going to see a logo for the lemonade. Stand, click on that to give today. We believe in the generosity of our community and we thank you in advance. You want to help us out? One last thing, share this podcast with a friend or colleague use it as a foundation for daily or weekly discussions. On the topics that are relevant to you and the industry, they can subscribe wherever you listen to podcasts. All right. Here's the social media post. And the only reason I'm responding to this. It's because it got. 250. , likes and that kind of stuff. 91 comments, 27 reposts. So this is going to become part of the narrative that is out there in the world and it's wrong. So I just thought I would address it. So bill Gurley essentially talks about this concept of regulatory capture. And he says, that Judy Faulkner was the only corporate representative on the health it council in 2009. And they came up with a brilliant idea . To have, , all doctors. , would receive $44,000 if they bought software EHR software. , which amount it's a $38 billion of taxpayer money going to EHR providers. The second phase is they got paid $17,000 if they used it, which is meaningful use. As we all know. , And the ONC decided the threshold that suffer would need to comply with. For this mandate. And then he said, and not only that epic, somehow orchestrated three record fines of 155,000,057 and 145 million against the lesser competitors. And he says, this is why epic has succeeded. Okay. , bill Gurley is not in the industry or from the industry. And, , I really want to set the record straight on this. I don't know why I'm not an epic apologist. In fact, if you. , grab me at certain times and want to talk about why I think Epic's dominance might be bad for healthcare. I'd be more than happy to talk about that. But, , hopefully they can navigate that. Hopefully they could continue to listen to their clients and they can continue to serve the industry well, but, , there have been times I've been critical. I was critical of their app policy. I thought it stifled innovation. I thought they were charging too much money for innovators. To, , get on app orchard and because of that and because of the things they had to sign away, , I thought if they could afford to, they should stay off of app orchard. So I've been critical of epic in the past. But in this case, I think bill Gurley is just completely wrong. And here's how I see it. Epic one initially, because they were the only EHR at the time with an integrated acute name of the Tory system. And you know how powerful that is, that is so important to be able to run the same EHR in the hospital as you do in the clinic and office creates a huge advantage for the organizations that went this route.

You didn't have to create the interoperability. You didn't have to worry about data silos. You could create metrics across your clinically integrated network. You could have a clinically integrated network. You could, , share protocols across that network. I mean, there was just so much value to that. And I, all you have to do is go back to that time. Meditech didn't have it. And I was a Meditech shop and I'm a Meditech fan. , they didn't have it. , , e-clinical works. Didn't have it. Practice fusion. Didn't have it. , you name it. , Cerner didn't have it. , , an integrated acute name and for your system was key. And at the time when this was past. They were the only one who had it. And by the way, the passing of this. I didn't favor epic over any other EHR provider. And at the time there was hundreds of them. And so this could have really gone in any direction, but at the time they had a distinct competitive advantage and that was it. I think they continue to win because they had fewer failed EHR implementations than their competitors. And that landed, then the reputation of no one ever gets fired for buying epic. That is a huge advantage in a risk averse industry. The reason. That they were able to have fewer failed implementations and they had a couple they've been written about, I think Maine was one of them. . I think they, there were some issues down at MD Anderson as well, and, , but very few failed. Ima implementations on epic, a lot of failed implementations on other platforms. Okay. And the reason that you didn't have that many failed implementations on epic is they're prescriptive and they're not relying on the client's plans for implementation. . They essentially came in with a playbook and said, we don't care. How good or bad you are. If you follow this playbook, we're going to minimize the risk of you having a failed implementation. So they were very prescriptive follow this playbook. In fact, they would go as far to say, if you're not going to follow the playbook, you're not going to get our software. We're not going to sell you our software, that in and of itself shows courage to say, you know what? We don't want to fail. Implementations. It hurts our reputation as much as it hurts your , reputation, and we want to ensure success. Okay. And so no healthcare leader in the industry wants to be in the news for failed EHR implementation. So that's why they continue to succeed. The next thing is, I believe we are at a point now where epic continues to win because there's a network effect that has taken hold. , the more systems they win, the more systems they win, the more people that are trained on epic. So you can hire nurses who already know epic. You can share records easier across that epic to epic. , connections. You can also enable new things. Like we saw at UGM where doctors can find patients with rare diseases. In other cities with symptoms. That they can do a symptom search and then they can consult with those doctors and find these rare diseases and work together to solve that you get the picture. I mean, there's a lot of reasons. And not the least of which is there an organization that listens very well , to their clients and to the industry. So I think there are, there's a lot of reasons why they have succeeded. There was no. , Really regulatory capture involved in the passing. Didn't favor them over other people in the industry. And by the way, , A couple of other things. He notes the, , the three. Payouts, I'll give you the three payouts. Cause I don't think the payouts had anything to do with, , targeting in any way. You had the e-clinical works payout, where they agreed to pay 155 million to resolve allegations, that it misrepresented the capabilities of itself where and paid kickbacks to certain customers. You just can't do that kind of thing. So that's 155 million and that's mainly due to the fact of the scale. Right. E-clinical works was a pretty predominant. , ,

, EHR within the clinics. And within the physician practices, it wasn't prevalent in the acute care systems, but it was prevalent in the ambulatory systems. , next you had practice fusion, practice. Fusion was agregious by the way. , and they agreed to pay 145 million to resolve allegations that accepted kickbacks from major opioid companies. So essentially. , practice fusion was an interesting model and that , they had paid advertising within the EHR. , so anyway, they accepted kickbacks from the opioid companies and they incorporated alerts into their EHR software designed to increase opioid prescriptions. That's why it was egregious. And Greenway health 2019 agreed to pay over 57 million to resolve allegations that it caused its users to submit false claims to the government. Bye. Misrepresenting the capabilities of its EHR product. Prime suite provided unlawful renumeration to users to induce them to purchase its product. Okay. So, , I just go back. This is going to become the narrative. It's like epic one because the government. , just line their pockets with, , taxpayer dollars. And I will be the first to tell you that epic did collect a lot of money as a result of the high tech act and, , meaningful use. , but they were no more advantage than any other EHR provider that was out there. They had , an integrated product at the time.

It may not have even been a better product at the time, but it was an integrated product at the time, which gave it a competitive advantage. They had fewer failed implementations. And now there's this network effect that has taken hold.

So that's why they've been successful. And, , you have a growing monopolistic pressure that is happening as a result of just wins, just they keep growing. They keep winning, they keep getting more medical records that is of concern and should be something we keep an eye on. But at the end of the day, I don't think the government gave epic an unfair advantage.

So I thought I would just set the record straight. I'm not an epic apologist, but I know that, , this narrative is just wrong and it's going to be prevalent because it's on social media, it's getting so many likes. It's getting out there and it supports a narrative that people want to portray, which is an evil empire and corporate greed and all those kinds of things.

So, , Yeah, there it is. That's my version of the record. If you have a different version, shoot me a note, bill it this week, health.com. Love to talk about it. All right.

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