I recently came across a really interesting comment from Chamath Palihapitiya, a venture capitalist (made his money working at Facebook), who commented on the healthcare industry and how he wanted to invest in a startup company that would take down Facebook. I embedded the full video below. His comments about EHR and Epic start at about 52:38 or you can click here to see it.
Here’s a great quote for those who can’t watch the video:
“Somebody has to go after the electronic medical record market in a really big way. Let’s go and take down this company call Epic which is this massive, old conglomerate. It’s like the IBM of healthcare.”
After saying this, he talks about how he and other VC investors like John Doerr could call people from Obama (for meaningful use stage 3) to Mayo Clinic to help a startup company try and take down Epic. He even asserts that he’d call Mayo Clinic and suggest that they should rip out Epic and go with this startup company.
Everyone reading this blog know that it won’t be nearly this simple to convince any hospital that’s on Epic to leave it behind. I agree with Chamath that it will happen at some point, but it won’t be nearly as easy as what he describes. Chamath also suggested that it might take $100 million and you might fail, but what a way to fail.
It certainly provides an interesting view into the way these venture capitalists and many startup companies approach a problem. However, I take a more nuance and practical approach of how I think that Epic will be disrupted. I think that it will require a mix of a new technology paired with a dynamic CIO that’s friends with the hospital IT leadership. You need that mix of amazing technology with insider credibility or it won’t be a success. Plus, you’re not going to go straight in and take out Epic. You’re going to start with a hospital department and create something amazing. Then, that will make the rest of the hospital jealous and you’ll expand from there until you can replace Epic. That’s how I see it playing out, but it likely won’t happen until after the MU dollars are spent.
Chamath’s comments were also interesting, because it shows that he doesn’t know the healthcare market very well. First, he said that meaningful use was part of ACA, but meaningful use is part of ARRA (the HITECH Act) and not ACA. This is a common error by many and doesn’t really impact the points he made. Second, he said that Epic is a big conglomerate. Epic is the farthest thing from a conglomerate that you can find. Has Epic ever acquired any company or technology? Cerner, McKesson, GE, etc could be called conglomerates, but Epic is not. Again, a subtle thing, but shows Chamath’s depth of understanding in the industry. It makes sense though. He isn’t an expert in healthcare IT. He’s an expert in seeing market opportunities. No doubt, disrupting Epic and Cerner would make for a massive company.