Epic announced a ton at UGM last week: AI Charting, LLMs built on Cosmos, Art, Emmie and Penny, MyChart Central, and an integrated ERP solution.
While Epic is not a ‘fast innovator’ compared to high growth startups, it is almost more remarkable that a company whose foundational architecture is MUMPS (I can’t fathom their technical debt) is able to innovate as fast as they do.
I applaud Epic’s vision; it is ambitious. But we all know it is incredibly hard to do anything well when you are trying to do everything. Because of Epic’s foothold of existing installs (they added 48 large providers just in the past year), Epic doesn’t have to be the best for any given solution; they just have to be ‘good enough’ to be the logical choice.
What are the macro decision criteria for selecting a health tech solution? And how do those factors influence how often ‘good enough’ is the right answer?
- Speed to implementation. Epic wins. You don’t need to negotiate a contract with a new company, and most Epic-developed solutions will be ‘natively integrated.’ We all know this means there is still going to be quite a bit of work to set it up, configure it, and get it working right. But it is probably faster than integrating an external solution.
- Ease of adoption (how does it fit within existing processes, and will people actually use it?). Epic wins. To be clear, other vendors probably have better design, user experience, and intelligible workflows. But, especially for staff-facing features, the ‘new feature’ that is already part of the ‘system’ that people spend their whole day using will ultimately be adopted more (even if the experience leaves a lot to be desired).
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- Aside: Epic is notorious for the number of clicks it takes users to complete an action. But hey, isn’t a few more clicks in the system where users already expect a bad user experience easier to swallow than the pain of having to open (or God forbid log into) a different app? Isn’t it?!?!?!
- Cost. Epic wins. While all their add-ons aren’t free, they are usually cheaper because they are subsidized by ~$5B in annual revenue.
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- Aside: As AI adoption accelerates and more products build in AI-powered features, the cost of using and maintaining advanced models is rising. To keep up, many vendors will begin passing AI usage fees directly to customers or shifting to “pay-as-you-go” pricing models, where costs vary with usage. Flat-rate annual technology contracts may become a thing of the past. Imagine how fun budgeting will become with highly variable tech costs!
- Risk management. Epic wins. While there are risks in centralizing too much with a single vendor, I imagine most CISOs are going to choose Epic (along with the fewer integrations, data sharing, and vulnerability points that entails) over a third-party.
- Does it have robust reporting and auditing to drive value? Vendors win (most of the time). I think vendors have a greater focus on analytics to identify, drive, and measure value. Good vendor partners will put in a lot of sweat equity to make sure you are getting the most out of their product; they need your business to stay alive. Epic knows you aren’t going to stop using their core EHR because you don’t like the native scheduling tool, so they don’t have to care as much about proving the value of each individual solution.
- Features, quality, unique customizations, external integrations, and workflows. Vendors win. This is where vendors have to set themselves apart and really show their differentiators. They need to be exceptional, because Epic doesn’t have to be the best (and they never will be). But there is a big caveat here – especially in the current climate of tight budgets and high purchase scrutiny. How do you know (or prove) the best features, or the advanced features your staff/patients want, are truly needed to produce a meaningful ROI? Pareto says you’ll get 80% of the value from 20% of the features. Most of the time, going from not doing something to doing something (even if it isn’t robust) will produce meaningful improvement. We have all bought software because of the flashy cool feature that is ‘best of breed’… but then we end up just using the basic stuff 99% of the time.
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- Aside: A handful of people online are speculating on how vendors may need to start selling more to individual providers (those that have some level of autonomy over their operations and tech decisions) to combat the inevitably growing “Epic First” stance of IT organizations. IT is going to love getting more emails from physicians asking to buy the cool shiny toy they saw at a conference (“but Mom… all the other kids have the new, real Labubu and I am sick of my dumb Lafufu”). Is there a world where technology bleeds into physician preference items? I think data integration needs to get a lot more standardized and easier before that could be a feasible reality, but it is an interestingly chaotic future to think about.
As Epic builds a true ecosystem (especially with the ERP play, the growing data moat of Cosmos, expanded AI tools, and centralized MyChart capturing more consumer interaction and intent data), decisions on commodity features and solutions will trend even more in Epic’s favor.
So where does that leave other digital health companies? The hard truth is that we still need small companies to innovate. But when Epic can sit back, let others do the hard R&D, then ‘partner’ with one vendor and possibly displace a whole category of digital health technology because so many of the macro decision factors are weighted in Epic’s favor… that could discourage innovation. Perhaps we will see more digital health innovation happen in healthcare sectors that aren’t yet touched by Epic.
What makes you decide to take a chance on a third-party vendor vs. a native EHR solution?
