Episode 67: Epic Systems

So let's rewind all the way back to about 1970s.

The person who made the biggest mark on Epic is obviously, unquestionably Judith or Judy Faulkner.

Judy trained in math and computer science, and her path to healthcare software was almost accidental.

During her time as a grad student, she became involved in programming for physicians who wanted a better way to manage patient information.

The problem seemed pretty straightforward, right? Uh, create a software that could help doctors track patients over time.

She has described the early attitude that shaped Epic as essentially being one of the youthful naivety.

She didn't necessarily begin with the assumption that building a comprehensive EHR would be extraordinarily difficult.

The attitude was closer to, "Here's a problem.

Let's see if we can figure it out." And the mindset became incredibly important because healthcare software is one of the most complicated software categories in the world.

A patient's medical record isn't just a simple document, right? It's a constantly changing network of diagnoses, medications, lab values, imaging, allergies, procedures, you name it.

Now, Epic began life under the name Human Services Computing before eventually becoming Epic.

The company was founded in Madison, Wisconsin in 1979, and one of the early architectural decisions that became central to Epic's identity was building its own integrated system rather than assembling a collection of acquired software products.

Nearly five decades later, Judy describes the philosophy as essentially building one consistent system rather than acquiring a portfolio of disparate technologies.

And this is where the story becomes much more interesting from a business perspective.

Judy didn't build Epic according to the standard technology startup playbook.

There was no massive VC-backed growth strategy followed by an IPO.

There wasn't a series of acquisitions designed to roll up in healthcare IT.

Epic stayed private, and it's still private to this day, focused on customers and continuously reinvested in its own technology.

That decision obviously created something unusual, which is that a technology company optimized for a 40 or 50-year horizon rather than a five-year exit.