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Epic Systems founder Judy Faulkner built an empire pioneering—and later dominating—electronic medical records. For decades, she’s kept them walled off from competitors, but now the pandemic is fueling a digital health care race that might finally topple her from the throne.
Avictorious swell of brass instruments reverberates across the 1,100-acre Epic Systems campus in Verona, Wisconsin, a sleepy suburb just outside Madison. It’s February 2020, and except for China and a couple of ill-fated cruise ships, there are few signs of the coronavirus pandemic that’s about to envelop the world. It’s certainly business as usual at Epic: The familiar strains of a baroque wedding march fill the hallways, stopping the health care software company’s 10,700 employees in their tracks. On cue, a new customer announcement follows: Florida-based AdventHealth plans to deploy Epic’s electronic health record system across 37 of its hospitals. The full installation will take over three years and cost around $650 million, not counting ongoing maintenance, which will cost millions more annually. “It’s a very long relationship for many of our customers,” Epic’s founder and CEO, Judy Faulkner, says in a rare interview. She got the idea for the wedding theme from a visit to the Mayo Clinic several decades earlier, where she heard lullabies play whenever a new baby was born. A new customer “didn’t feel like a new baby,” she says. “It felt more like a wedding.”
Epic’s suite of offerings has proven particularly popular among large academic medical centers and children’s hospitals, such as the Cleveland Clinic, Johns Hopkins and Boston Children’s Hospital. The company’s 564 customers represent nearly 2,400 hospitals worldwide and 225 million patients in the U.S., or about two thirds of the country’s population. This translated into more than $3.3 billion in revenue in 2020, despite what Faulkner estimates to be around $500 million in foregone revenue for Covid-related software it provided free of charge, including infection management tools and extensions for pop-up hospitals. “It never seemed right to me to make money off Covid,” she says.
Her success has been decades in the making. Since Epic’s founding in 1979, the 77-year-old Faulkner has steadfastly rejected outside investors, Wall Street financing and acquisitions. Epic was still just a $500 million (sales) company in 2007. Ten years ago, it hit $1 billion in revenue, and growth has compounded at an annual rate of 15% every year since. It’s highly profitable: Estimated cash flow as measured by Ebidta is north of 30%, and the company has no debt. Forbes estimates Faulkner’s 47% stake in Epic to be worth $6 billion, which makes her the second-richest self-made woman in America. Employees and around a dozen other cofounders and initial investors own the other 53%.
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