The Bloomberg of Electronic Medical Records?
Here's a great health care and business story hiding in plain sight, and the reason you haven't read it is a story of its own about how the press works. If we told you that there were a woman-owned company with 3,000 employees, an elaborately designed Google-plex like headquarters, and $500 million in annual revenues* that makes a system that one in five doctors in America will use to keep electronic medical records for patients, you might think you'd have heard of the company, or read about it somewhere other that here at FutureOfCapitalism.com. But Epic Systems, despite having such high-profile customers as Kaiser Permanente, NYU Langone Medical Center, Memorial Sloan-Kettering Cancer Center, the Harvard Community Health Plan, the Cleveland Clinic, and the Geisinger Health System, is a secret to readers who rely on national news organizations such as the New York Times, the Wall Street Journal, the Associated Press, or the Washington Post to keep them abreast of developments in health care, business, and technology. This is so even though the "stimulus" package passed earlier this year includes $19 billion in funding for electronic medial records, and even though President Obama himself showed up in Ohio and proclaimed, "Cleveland Clinic has one of the best health information technology systems in the country. And that means they can track patients and their progress. It means that they can see what treatments work and what treatments are unnecessary. It means they can provide better care for patients. They don't have to duplicate test after test because it's all online… And here's the remarkable thing: They actually have some of the lowest costs for the best care."
The transformative power of the Internet and the dynamism of the free market has led to plummeting prices in everything from bestselling books to stock brokerage commissions (e-trade, Schwab) to personal computers (Dell) and news (which is now, in most cases, free to consumers). This happened, for the most part, without the government subsidies or price controls that are being talked about as part of the health care overhaul. Could the same power of competition and largely private-sector-driven technological innovation be harnessed to help improve quality and cut costs in health care?
People have been asking the question for some time. It was a priority even of the Bush administration, as Meghan Clyne reported in a 2006 dispatch for the New York Sun that holds up pretty well three and a half years later as an assessment of the issue. (My favorite fact about the article is that it includes a quote and anecdote about Karl Rove's otolaryngologist, who isn't identified as such in the article.) My "wise longtime healthcare industry figure" cautions that while savings and quality improvements are certainly possible, they aren't a sure thing. He notes that some electronic medical records systems require typing by the doctor, and if the doctor isn't a fast typist or even particularly computer-literate, it may be quicker for the doctor to check a box with pen and ink on a sheet of paper attached to a clipboard or in a file folder. In some cases, the file clerks who were supposed to be replaced by the electronic medical records system, creating cost savings, have been replaced by employees who follow the doctor around and type for him or her. And in any case, the high-cost element in health care isn't the wage of the file clerk, it's the salary and time of the doctor.
There are plenty of players other than Epic in the electronic medical records market. Google is trying to build its market share with the help of a high-powered advisory board that includes a bestselling author, Dr. Dean Ornish; the chief executive officer of the Cleveland Clinic; the chief information officer of Harvard Medical School, and the dean of the University of California San Francisco medical school, David Kessler, a former commissioner of the Food and Drug Administration. A Massachusetts-based company called eClinicalWorks, which is the subject of a Harvard Business School case study, says it has been deployed by more than 30,000 providers, including Boston Children's Hospital and Continuum in New York. EClinicalWorks also has a deal with Dell and Sam's Club, a division of Wal-Mart, that offers a value proposition formidable enough that in pitching his hospital's Epic system to private practices, the chief information officer at NYU Langone, Paul Conocenti, makes reference to it as a competitor, saying, "we are going to roll out Epic to them at a very, very discounted price. The price per doc is … let's just say it's better than Sam's Club. So, we know that's one benchmark, and we're cheaper than Sam's Club. We give them more than what they're going to get with Sam's Club."
For all the competition, though, networking effects mean that in certain information-technology applications, one player tends to emerge as the dominant one, as the stories of Bloomberg,** LP, Facebook, and iTunes suggest. Epic is well-positioned to be that dominant player in electronic medical records and may even be well on the way to achieving that position. So why has virtually the only extended coverage (coverage from which the information about Epic in this article is drawn) of the company you can find in the press been in a local newspaper in Wisconsin and a trade magazine that covers healthcare information technology?
The failure of the rest of the press to latch on or discover this story tells a lot about some of the structural problems of the news industry, and why what you read in the papers isn't really a fully accurate picture of events in the world as they are, but a version of the world that is distorted in all sorts of ways. Here are five reasons why the Epic Systems story hasn't made the papers, the wires, NPR or network television, or even the Huffington Post, which recently published an article from the "Huffington Post Investigative Fund" headlined "Stimulus Fuels Gold Rush for Electronic Health Systems" :
1. It's based in Wisconsin. If Epic were based in a media capital such as New York or Washington, D.C., or even Los Angeles, you'd have probably read about it already. But to the coastal media elites, Wisconsin is flyover country. The Wall Street Journal recently announced it is closing its bureau in Boston. They certainly don't have a bureau in Wisconsin. News is what happens where there happen to be reporters stationed.
2. It's privately held. Publicly traded companies are required to file all sorts of documents with the Securities and Exchange Commission, and those documents are available for shareholders – and reporters – to scrutinize. A privately held company doesn't have to file, which means no stories about their quarterly earnings or about changes on their board of directors. Information on private companies is much harder to come by. Public companies also have a built-in audience of shareholders and potential shareholders who want to read articles about why the stock price is up or down or cheap or overprices. News organizations try to cater to that audience, while giving privately held companies short shrift, even if they are just as large in terms of employees, revenues, or public policy significance. Private ownership also makes it easier for a firm to sacrifice quarterly or annual earnings in order to make investments in people or technology that can wind up building a business's value over the long term. Again, the Bloomberg example applies, and, though we haven't talked to Epic, it sure looks as if they understand this.
3. It's successful. If a big private company goes bankrupt or gets in trouble with regulators, or if its founder gets arrested, you might read about it. There's a press bias in favor of disaster, in favor of bad news. This is not without a certain logic – an editor once told me that if the Plaza Hotel is burning down, you don't write about all the hotels that aren't burning down. And it's not without exceptions. Warren Buffett gets a lot of press, and he is successful. But it's a factor that works against readers finding out about Epic.
4. It's nongovernmental. Public agencies are at least theoretically accountable to taxpayers and voters, and they employ spokespersons whose job it is to cultivate the press so that their politician bosses get re-elected and their agency's budget gets reauthorized. Reporters gravitate toward writing about those government agencies because it is easier than prying out information about private companies. Again, this is not without a certain logic; the public does have more of an interest in knowing about how its tax dollars are being spent than in what is going on at a company that is privately held. But again, it means that the Wall Street Journal is telling you all about the electronic medical records system in place at the Veterans Administration, but nothing about Epic.
5. It's press-shy (so much so that the company's owner-leader, Judy Faulkner, reportedly doesn't like to be photographed) and doesn't want to be written about. A lot of what appears in the press is driven by people and companies hiring public relations firms because they have something to promote. They want to sell books or movie tickets or restaurant meals or mutual fund shares, or get their company's stock price up, or win votes or campaign contributions for their cause or political candidate. Often, what's in the press, in other words, isn't what's really going on, but a subset of what's really going on that might be called "what's really going on and that the people who are doing it want you to know about." It's driven by editors and reporters and producers reacting to pitches from publicists rather than thinking about what's really happening in the world and trying to reflect that accurately. Epic doesn't seek press attention, so it hasn't gotten much.
Despite all that, we here at FutureOfCapitalism.com still think that Epic is a pretty good story, worthy of more attention. So the inaugural FutureOfCapitalism.com Journalism Award – a much-coveted FutureOfCapitalism.com coffee mug and a lucrative yet unspecified financial prize in lieu of a taxpayer press bailout, acceptance of both subject to the ethical rules in place at the winning news organization -- will go to the first news organization to tell this Epic story to a wider audience.
*That revenue number is already a year or so old, so it could now be substantially larger.
**As far back as 1997, Michael Bloomerg predicted that his company would surge just as it has, the New York Sun recounted. "I'll have to work very hard to screw this one up," The New Yorker quoted Mr. Bloomberg saying. "We're way ahead in critical mass business with technology. It's very hard to play catch-up ball. It's very hard to kill momentum." One might say the same thing about Epic.
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