Investor Wants to Take Down Epic

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.

About the author

John Lynn

John Lynn

John Lynn is the Founder of the HealthcareScene.com, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference, EXPO.health, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.

6 Comments

  • I think the way to take down Epic is to build a platform from the data up, one that allows interoperability by default, that allows for the flexibility to define workflows ad nauseum, and provides a UX/UI with simplicity so that physicians can use it. The database should allow for storage of every aspect of a patient’s life; clinical, social, device, et. al., and should be able to add new data types at will.
    I’ve proposed a model of such a system I label a “data custodian”, an agent contracted by the patient, responsible for the storage and management of the patient’s PHI. Which follows privacy rules defined by the patient. That allows sharing of data per those privacy rules. The custodian becomes the central place to access the PHI of the patient and ergo, all patients under the custodian’s care.
    On top of such an infrastructure, all types of applications can be developed without the proliferation of silos of data as is typical of single-purpose apps. A eco-system of HC can thus be developed.
    An interesting article was written a year ago discussing the “Napsterization” of HC data: http://www.healthcareitnews.com/blog/napster-ization-healthcarecoming-theater-near-you. Although slightly long-winded, it points to a possible future.

  • TimS,
    Interesting idea. Could the flexibility of the data be a way to compete with the large EHR vendors?

  • Interesting, that the investors want to “take down Epic’ only to erect another EHR vending practice. Epic is not a public traded commodity and investors cannot get “in” so to speak so they want to reject it for an EHR that they can profit from.

  • This, it seems, is a way to look for attention. The goal was just to put the idea out there to see if it can gain ‘traction.’ EPIC itself will endure, if not in the same form we see today. Consider IBM & Microsoft: they no longer have the glow and power they once had, but are still strong forces in their respective markets. Not even the US government could dismantle them; market forces did make them change, however.

  • I would be very interested in speaking with Chamath Palihapitiya as We are working on a project that could be the next best thing in the EMR market. My vision will include an ACO element. Its modular design will allow each facility, private practice, outpatient surgery center, pharmacies and even gyms access to very specific parts of patient data to move us to MU3. But beyond that it will be designed with wellness at its core instead of just managing the diabetic in room 203 it will manage the patient in and out of the hospital from cradle to grave at every touch point that a patient can have. Now this means there will be some huge hurdles to overcome and some very innovative approaches in the way that it is built however, I think I have a very impressive model in the works already and with the 30 volunteers that have joined in my quest to create a more perfect EMR it is just a matter of time. I believe strongly that the current EMR’s are ineffective and all of them fall short not only in their intuitiveness but in their view of the future of healthcare.

  • David,
    Unfortunately, I don’t know Chamath personally. Just saw the video. Although, he’s not hard to find: https://twitter.com/chamath and https://www.linkedin.com/in/chamath and your network should have some connection to him. He’s already stated he’s interested in it.

    If I were you, I’d just be prepared to go into him really prepared with the team that can execute on the vision. Not to mention a team which shows that they understand how we can get to where we are today in healthcare to where you’re describing. That’s often a hard challenge to sell to a VC, but can be done if it makes sense to them.

    As Scott kind of said above, Chamath isn’t necessarily interested in changing healthcare, but replacing Epic. Sure, if you can change healthcare in the process, that’s a great byproduct, but he’s more interested in the later.

    As Chamath says in the video, you might fail at what you’re doing, but what a spectacular failure it could be. Best of luck.

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