We recently looked at big tech's growing role in healthcare; specifically, we looked at Apple, Google, Amazon, and Microsoft. They are making innovative contributions toward interoperability, usability, and patient access. They appear ready to disrupt the status quo of EHR software. To understand whether or how this might happen, we need to also look at the existing EHR solutions. The incumbents, Epic and Cerner, have been around for decades. How have they been working for or against EHR innovation?
Epic and Cerner both started in 1979, making them 40 years old. Together, they share the majority of the EHR market. In acute care, Epic has 28%, and Cerner has 26%. They have credibility, work with the government, and are not going anywhere soon. Their decades in the industry and longstanding partnerships with major institutions have the potential for a deep and wide perspective on the challenges in healthcare. Experience and prevalence are advantages that they have over any newcomers.
One expertise advantage lies in a knowledgeable and experienced workforce. There are stories that Epic sends their developers to learn on the front lines in hospitals, which shows an investment in the industry knowledge of each employee. At the same time, there is anecdotal evidence of high turnover. Employee reviews for Cerner paint a similar picture of high demands and low compensation. If the best developers are lost to companies that invest more in sustaining their employees, the result is an always churning young workforce that must be continually retrained. Brain drain results in an inexperienced and overworked team that will have trouble innovating, and over time, a system that cannot realize the full potential that a seasoned development team can provide.
A challenge that newcomers and incumbents still face is rollout. Any major change or update to an EHR system affects a massive amount of data and many, many people, including patients, clinicians, administrators, and more. Transitioning from one EHR system to another is a significant undertaking. From what we can observe, this activity has not yet been standardized to minimize the impact. Implementation glitches, including overruns and missed schedules, have negatively affected Cerner with their VA EHR project. Sutter Health's $1 billion Epic EHR system crashed for 8 hours during a system upgrade. Wake Forest Baptist Medical Center lost $60 million and had to cut 950 jobs due to their Epic EHR rollout. This is an aspect that incumbents need to perfect or incomers may surpass.
Most institutions were motivated to move to EHR systems by incentives through the HITEC act. EHR companies are still working on interoperability. Both Epic and Cerner lived through the widespread adoption of the internet many years ago. Tech innovators in other industries took advantage of connectivity while healthcare remained fragmented. The EHR companies have been accused of maintaining a protectionist approach to business, giving them a role in inhibiting innovation in interoperability. The companies cite other reasons. In a Forbes interview, Epic CEO Judy Faulkner indicates that safety and privacy are the reasons that Epic is not an open system: "Health care organizations don't ask us to interface to every type of module because they understand that it could cause safety problems." Epic has been selective about who may develop third-party apps for its system.
There has historically been a lack of collaboration between the two companies that has contributed to the data siloing that we are currently trying to break down. There are efforts through legislation to agree on standards, but Epic has expressed reluctance to the governing bodies about moving quickly on interoperability rules. It is something to consider as healthcare moves quickly towards collaboration with patients on their care. EHR companies will be required to work with each other as well as develop connections with consumer-facing third-party app creators.
It is possible that Epic and Cerner are stretched thin. They have large systems that try to manage many business functions for a large amount of the healthcare market. Big Tech sees an opportunity to use their technological advantages, and they are positioning themselves to take advantage of the incumbents' inactivity. There are also newer, more agile, innovation-minded companies that are making inroads into the health information technology space. Even as Epic and Cerner improve their interfaces and expand interoperability, will they maintain favored status among a new generation of clinicians, administrators, and patients?
Are the incumbents in the best position to offer the solutions that are sorely needed? Is their experience an advantage or have they had ample time to innovate?