Bloomberg News

Epic’s Faulkner Says Rivals May Use Data Pact as Weapon

March 05, 2013

Epic Systems Corp. Chief Executive Officer Judy Faulkner, whose company provides electronic medical records for about half the U.S., said her rivals are attacking her business under cover of easing patient access to data.

Epic wasn’t asked to join the alliance announced yesterday, which suggests the pact may be more about containing Epic than connecting doctors and patients, Faulkner said today in an interview at an industry conference in New Orleans.

“We did not know about it. We were not invited,” Faulkner said. “It appears on the surface to be used as a competitive weapon and that’s just wrong. It’s wrong for the country.”

Faulkner, who co-founded the closely held company 34 years ago, said she still has no interest in taking Verona, Wisconsin- based Epic public, despite approaches from Wall Street banks. She predicted a shakeout in an electronic medical records industry that has swelled with new businesses as the government increased subsidies for physicians to buy their products.

Cerner Corp. (CERN:US), McKesson Corp. (MCK:US) and three other providers said yesterday they would form a nonprofit group to set standards for exchanging data across their systems. The industry has been criticized for building closed computer networks that make it harder for doctors and patients to share data with rival systems.

’Monumental’ Step

The alliance was a “monumental” step toward unlocking the flow of information in U.S. medicine, McKesson CEO John Hammergren said at a joint news conference with the other companies. Athenahealth Inc. (ATHN:US), Allscripts Healthcare Solutions Inc. (MDRX:US) and Greenway Medical Technologies (GWAY:US) Inc. also joined the group.

The five vendors together account for 41 percent of the market for electronic medical records in hospitals, said Andy Burtis, a McKesson vice president. Epic on its own has contracts to provide records for almost half the U.S., said Barbara Hernandez, a spokeswoman, in an e-mail.

The company has 290 customers and $1.5 billion in annual revenue, she said.

Asked if Epic had been invited, the five companies yesterday said the rest of the industry was welcome to join. Faulkner said Epic needed more information before deciding what to do. The federal government is already developing data-sharing standards, said Carl Dvorak, Epic’s executive vice president.

“I would really sincerely hope they put their energy behind true national standards,” he said of the other companies. The alliance “is yet another distraction.”

Cerner is based in Kansas City, Missouri; McKesson in San Francisco; Athenahealth in Watertown, Massachusetts; Allscripts in Chicago; and Greenway in Carrolton, Georgia.

Jennifer Bosshardt, a Cerner spokeswoman, and Kris Fornter, a McKesson spokesman, didn’t immediately return phone calls seeking comment on Faulkner’s statements.

To contact the reporter on this story: Alex Nussbaum in New York at +1-212-617-5406 or anussbaum1@bloomberg.net

To contact the editor responsible for this story: Reg Gale at +1-212-617-2563 or rgale5@bloomberg.net


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Companies Mentioned

  • CERN
    (Cerner Corp)
    • $65.71 USD
    • 0.61
    • 0.93%
  • MCK
    (McKesson Corp)
    • $210.15 USD
    • 0.36
    • 0.17%
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