Digitizing Health Records, Before It Was Cool
Andy Manis for The New York Times
The campus of Epic Systems, the electronic health records supplier, in Verona, Wis. Its reputation as a creative place to work draws programmers who might otherwise go to high-tech giants.
By MILT FREUDENHEIM
Published: January 14, 2012
VERONA, Wis.
Minh Uong/The New York Times
Epic Systems
Judith Faulkner, the C.E.O., below, started the company more than 30 years ago, when its three employees worked in the basement of an apartment house. It now employs 5,100.
Andy Manis for The New York Times
A sculpture of the Cat in the Hat greets workers at Epic's campus, whose quirky features also include a giant slide.
THE push to move the nation from paper to electronic health records is serious business. That’s why a first look at the campus of Epic Systemscomes as something of a jolt.
A treehouse for meetings? A two-story spiral slide just for fun? What’s that big statue of the Cat in the Hat doing here?
Don’t let these elements of whimsy fool you. Operating on 800 acres of former farmland near Madison, Wis., Epic Systems supplies electronic records for large health care providers like the Cedars-Sinai Medical Center in Los Angeles, the Cleveland Clinic, and Johns Hopkins Medicinein Baltimore, as well as health plans like Kaiser Permanente and medical groups like the Weill Cornell Physicians Organization in New York. In fact, Epic’s reputation as a fun-filled, creative place to work helps draw programmers who might otherwise take jobs at Google, Microsoft or Facebook.
Epic supplies software, systems, training and support so its customers can manage their data. As far as the general public is concerned, it operates far under the radar. Yet it helps keep track of 40 million patients, alongside a handful of large software companies and hundreds of smaller firms that have emerged to digitize health records.
Unlike some of those firms, Epic is no newcomer. Judith Faulkner, the chief executive, started the company more than 30 years ago, when, in all but a very few places, patient records were kept on paper. As such, she has a long-term view of the nation’s struggle to digitize medical records.
Ms. Faulkner understands why it’s taken much longer for the health care industry than, say, banks and airlines to move to electronic data. In banking, the types of data are much more limited and known, she says. In health care, by contrast, data is constantly changing based on information from doctors, nurses, patients and others. New discoveries, protocols and government requirements add even more complexity.
The way this data is stored and used can literally be a matter of life and death — which is why the transition to electronic health records is so sensitive. And why it’s so important, Ms. Faulkner says. Computerized record systems can actively search for and analyze information in ways that paper files never can, thereby improving patients’ health, she says.
Digital records are an invaluable tool for doing research and improving care, says Philip Fasano, executive vice president and chief information officer of Kaiser Permanente. “For example, we are able to follow decades of data on diabetes patients,” he says. “We can see which medicines are absolutely the best and personalize the doses. We can truly change the medical outcomes.”
Ms. Faulkner started digitizing patient records when she was just out of graduate school in computer science at the University of Wisconsin. That’s when a research group in thepsychiatry department asked her to create a system to help keep track of patient data over time.
Her program, built on ideas from a few other pioneers, was a success. Other medical researchers began requesting their own versions, and eventually a business was born.
At first, Epic consisted of three part-time employees working at $10 used desks in the basement of an apartment house near the university. They bought a bulky computer from a company called Data General; it had two 50-megabyte disk drives that sounded like a noisy washing machine, Ms. Faulkner recalls. “You couldn’t touch it, or the data got messed up,” she says.
There may have been a learning curve, but “to the best of our knowledge, in the 32 years we’ve been in business, there has never been a breach of Epic’s data by a hacker,” Ms. Faulkner says — speaking to a concern that has some people nervous about the conversion to electronic health records.
Concerns about security are hardly groundless. A government Web site known as the “Wall of Shame” has documented hundreds of breaches that threatened patients’ privacy.
At Epic, “We have all sorts of firewalls and security systems in effect to prevent data breaches,” Ms. Faulkner says. On laptops used by doctors, files can be viewed but not stored. The same is true for smartphones and tablets. “We do not store patient data on them,” she says, so it cannot be misused if these devices are stolen.
Ms. Faulkner is an industry representative on a government panel charged with examining privacy and security issues regarding health data. She says she wants to strike a balance between ensuring privacy and making sure that information can be shared for better patient care.
“I’m worried if we put up too many barriers in order to make things private, and if that makes the flow of information slow and hard to share, in effect more people will be harmed,” she says. So far the committee has maintained that balance well, she says.
Carl Dvorak, an executive vice president at Epic, says the company shares patient data with health care organizations that are not customers if they meet certain conditions. They need “appropriate patient consent,” he says. “To ensure privacy and security each health care organization uses a digital certificate to prove their identity to other health care organizations when exchanging patient records.”
Another concern among patients and medical professionals is the possibility of medical errors resulting from improperly used or poorly designed record systems. Federal officials are exploring options for reporting and dealing with such problems. The industry prefers reporting voluntarily to a patient safety organization linked to the Department of Health and Human Services and its health information technology agency.
EPIC has had to consider these types of issues while growing very quickly. A decade ago, it was still a relatively small company, with 575 employees. Then, in 2003, Kaiser Permanente, based in California, chose Epic over two much larger companies — I.B.M. andCerner — to provide the electronic system for its 36 hospitals and more than eight million members.
Kaiser estimates it will eventually spend a total of $4 billion on the software and related costs like those for equipment and training employees.
Epic has been adding other large customers, for a total of 260, including 35 new contracts last year. All told, it says, its systems will cover 127 million patients with active electronic health records by July 2013. It now has 5,100 employees; to handle all that growth, it plans to hire 1,000 more people this year.
Its customers include many hospitals that are connected to medical schools, as well as large physician groups. The Epic software system is a “de facto standard among the more complex academic health centers and multispecialty medical groups,” says Dr. John D. Halamka, chief information officer of Beth Israel Deaconess Medical Center in Boston and a professor at the Harvard Medical School.
As a privately held, employee-owned company, Epic does not issue profit statements. Its revenue for 2011 is expected to come in at nearly $1.2 billion, a 45 percent increase over the previous year, the company says.
The federal government is contributing to the recent growth of Epic and similar firms by offering financial incentives to health providers who switch to electronic records. It sees these records as a way to improve patient care and reduce inappropriate costs like those for duplicated tests.
Nearly 40 percent of American primary care doctors and about 25 percent of hospitals use electronic patient records. Thousands more are expected to adopt them this year to qualify for financial help under the 2009 federal stimulus package.
The government began to disburse the money last May; so far, hospitals and doctors have received $2.5 billion of a potential $27 billion in stimulus funds, federal officials said last week.
In addition to Epic, other suppliers of health data systems include Allscripts, Meditech, Cerner and units of diversified giants like I.B.M., McKesson, Siemens and GE Healthcare. All of those companies’ varying systems have raised concerns about usability, especially when different systems must share information. Some wonder if the government should play a bigger role in creating uniform technical standards and designs across systems.
“So far the advisory committees that I am on have been wise in figuring out the right balance between what should be left to the vendors as they listen to their customers and what should be prescribed by the government,” Ms. Faulkner says.
About 250,000 doctors use Epic’s system, and “they give us a lot of feedback on design,” she says. “I haven’t seen an expert group that does better. Typically the wisdom of the crowd is better than direction from a small group.”
EPIC’S employees include doctors and nurses who visit customers’ sites to see what is and isn’t working. Last September, some 6,600 health care and information technology executives and professionals also visited the company’s bucolic campus here for a users’ conference.
The giant slide — one of the many quirky features of the campus — was a popular diversion during the conference.
“I never would have expected to see a bunch of executives going down a slide,” says Aaron Webb, 28, a software developer from St. Cloud, Minn., who has worked at Epic for six years.
Ms. Faulkner has made it a point to offer a “cool” workplace even though her company is distant from Pacific beaches or Manhattan towers. As part of an Epic committee, she has bought some of its eye-catching artwork at community art fairs around Wisconsin.
“It is an incredible physical facility,” says Marjorie Klein, a retired professor of psychiatry, original investor and longtime Epic board member. “I think it supports employee creativity.”
The campus also has 15 acres of solar electric panels, thousands of geothermal wells for heating, and crops that are harvested for biomass fuel.
Epic broke ground for the Verona campus in 2002 and began moving its main operations there from Madison in 2004. With the Kaiser contract in 2003 and the new business that followed, Epic has been expanding its acreage and adding buildings ever since. It now has 13 buildings and underground parking garages with 3.5 million square feet of space; a million more square feet is under construction.
That includes a sleek 5,000-square-foot data center — a far cry from the single computer in that basement in Madison that rattled like a washing machine three decades ago.
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