Happy June to all! It's hard for us to believe that we are in our sixth month of producing this newsletter and establishing FinMed Partners as a leading consulting and advisory firm in healthcare payments. We are grateful for the support we've received, and are looking forward to getting to know more of you in the months ahead. (Let us know at info@finmedpartners.com if you will be attending the HFMA annual meeting at the end of June - we'd love to say hello.)
In this issue we dive into some Epic-related information, including analysis of the latest list of organizations using MyChart and a breakdown of MyChart usage. We also look at the upcoming Waystar IPO and bring you a CEO Chat with Matt Swanson, founder of Reciprocity Health.
Thanks for reading and send us your comments and suggestions - we love feedback!
CAPITAL MARKETS
Waystar IPO roadshow underway
After first planning and then delaying an initial public offering for RCM software company Waystar in October 2023, investors EQT AB, Canada Pension Plan Investment Board, Bain Capital and Francisco Partners have announced the launch of the company's IPO. Underwriters are planning to price the deal between $20-23/share. At the midpoint of this range, Waystar would be valued at approximately $3.7 billion. The company's filing shows a 2023 loss of $51 million (similar to 2022), and revenues of $791 million (12% growth over 2022 revenue of $705 million). The company plans to list on NASDAQ under the ticker symbol WAY.
Matt Swanson, Co-Founder & CEO, Reciprocity Health
Matt Swanson founded Reciprocity Health in 2020 to engage the patient as the critical stakeholder in driving health outcomes and by supporting them in adhering to their prescribed care management programs. In this issue's CEO Chat, Matt shares his thoughts on the problem addressed by Reciprocity Health, what makes the company better and different in its market, and key goals for the next 12 months.
Epic, as everyone knows, has become the de facto platform and interoperability standard for managing patient information in larger health systems, including their faculty and employed physician groups. Less well known is the extent to which Epic is utilized by independent medical groups, health plans, and even a large dental provider. Next up here we cover info on:
what is behind Epic's product names, and even the Epic name itself;
the latest KLAS report, highlighting Epic's continuing growth and utter dominance of the hospital market;
the breakdown of Epic MyChart instances by type of provider including access to a list of every MyChart customer, and the latest health systems moving to Epic;
how patients use MyChart; and
Epic's biggest competitor, Oracle (FKA Cerner) responding to a recent Business Insider article critical of Oracle's approach.
SPOTLIGHT ON EPIC
What do Epic's product names mean?
Epic is well known for its whimsical naming approach, both for customer facing products as well as employee facilities. All of Epic's campuses at HQ in Verona, WI have themes and take a light approach to design and names. (The New York Times in 2018 wrote a piece looking at the Epic campus expansion titled "Willy Wonka and the Medical Software Factory"). According to The Cap Times, "In line with the fantastical designs of the existing buildings, the sixth campus, called Other Worlds, will draw inspiration from “The Lord of the Rings” and “The Chronicles of Narnia,” with a “floating forest” and plenty of references to elves." Epic's products have names such as Bugsy, Stork and Willow.
While many have wondered about the derivation of these names, there has been little explanation - until now. In a recent blog post, CEO Judy Faulkner revealed Epic's naming guidelines. She writes that "Names help give a 'feeling' to a product. Our products should make their users feel happy, and a good name is a little part of that." She goes on to say that "Epic, a Greek poem ('a glorious recounting of events'), is the whole story of the patient" and that their other EHR versions are also poems or songs ("Sonnet, a Shakespearean poem, is a smaller version of Epic. Canto is a song for the tablet, Haiku a poem for the phone, and Limerick a poem for the watch.")
The HISTalk blog did a nice job summarizing the KLAS report that came out in May looking at acute care EHR market share. Since viewing the full report requires a KLAS subscription, we'll repeat the HISTalk points here:
Epic gained 153 hospitals in 2023 while losing none
All other vendors showed a net loss of hospitals and beds
Epic now has 39% market share of US hospitals (52% of beds)
Oracle Health (FKA Cerner) performed the worst, losing net 71 hospitals (15,000 beds)
Most of Oracle Health’s wins since 2016 have been in standalone hospitals of under 200 beds. Those hospitals aren’t buying due to economic pressures
Meditech, which had an all-time high customer retention rate of 84% in 2022, saw that drop to the lowest-ever 30%, with 25% of that due to M&A
Epic MyChart instances by type, state and provider name
FinMed Partners decided to take a look at exactly which provider organizations (and other entities) are using Epic. We took the time to capture the publicly available listing of MyChart logins and categorize these by type and segment (see chart).
Source: FinMed Partners analysis
As expected, by far the largest category is health systems and hospitals, including independent children's hospitals and standalone rehab facilities. We were surprised at the number of independent medical groups, which was dominated by FQHCs and other single specialty practices. FQHCs are increasingly assisted in their purchase and installation of Epic by organizations such as Oregon Community Health Information Network (now called OCHIN), Health Choice Network (HCN), and Community Technology Cooperative (CTC).
Within single specialty, Primary Care (49) is the biggest practice type, followed by Orthopedics (21) and Behavioral Health (10). This list excludes employed and affiliated medical groups that use a health system's Epic platform, since they do not have separate MyChart logins. In most cases, it also excludes hospitals that operate under Epic's Community Connect program which allows health systems to resell their Epic instance to another facility, and become, in effect, a managed service provider.
Epic's introduction of its Garden Plot cloud-based version enabled smaller healthcare organizations, including sub-200 provider medical groups, to more easily afford Epic. These providers buy Epic on a subscription basis and can be live in 90 days. While they don't get all the bells and whistles of a full-fledged custom Epic installation, they do get their own MyChart.
Other takeaways from our analysis:
Epic has one standalone dental customer so far, California-based DSO Pacific Dental Services
We counted 10 health plans using Epic, including Molina and Sanford
At least nine of Optum's acquired medical groups are using Epic, including Atrius (MA), Reliant (MA), The Polyclinic (WA), Everett Clinic (WA), Kelsey-Seybold (TX) and ProHealth (CT).
Epic has gained a foothold in kidney care with Acumen (formerly Fresenius) and DaVita
Evernorth (Cigna) has put its providers on Epic
Other segments with some Epic implementations include urgent care, specialty pharmacy, virtual care, life sciences and employer clinics.
Email us here to request a copy of the data, which includes a list of unique organizations by type/ segment and all states in which they operate.
SPOTLIGHT ON EPIC
Latest providers moving to Epic
As a companion to the current list of organizations using MyChart, Beckers Health IT recently listed more providers moving to an Epic system.
To round out the picture on MyChart, we thought it would be useful to share some data from a study we conducted two years ago (see graphic). This covered other topics - and if you're interested in more data points let us know - but the basic takeaway is that by far the biggest use of MyChart is to check test results (four out of five patients). "Paying my bill" is essentially tied for fourth place with "messaging my provider", at around 50%.
Source: FinMed Partners study, conducted June 2022.
We had other interesting findings regarding MyChart usage that correlate with the length of time someone had been a MyChart user (e.g., 3 years vs. 1 year), and age. Contact us here if you're interested in a deeper dive into this data, including specific points around payments.
SPOTLIGHT ON EPIC
Does Judy Faulkner "oppose interoperability"?
In May, Business Insider published an article that was critical of Oracle's acquisition of Cerner and looked at the VA’s delayed implementation of Oracle/ Cerner. (Unless you have a subscription to Business Insider, you won't be able to read the article.)
In response to this piece, an Oracle executive (Ken Glueck, EVP) wrote a post rebutting the article's claims and painting a much rosier picture of the former Cerner's financial health and future. Sample quote: "That’s why Oracle is just getting started and why it is so invigorating to have BI rooting against us. It is true—as BI points out – that others have tried to modernize healthcare and failed. What BI misses is that all these same factors that caused others to fail will also cause Epic to fail. And these factors will lead to Oracle’s success."
One line from the post that has captured the media's attention contains kernels of truth, but misses the bigger point. Mr. Glueck says that "everyone in the industry understands that Epic’s CEO Judy Faulkner is the single biggest obstacle to EHR interoperability. She opposes interoperability because it threatens Epic’s franchise." It's probably more accurate to say that the hospitals utilizing Epic oppose interoperability because it threatens their local market share. Epic is just following the lead of its customers.
We will be at the upcoming HFMA annual meeting in Las Vegas from June 24 - 26. If you plan to attend, we would love to say hello - please drop us a line at info@finmedpartners.com!
Thank you for reading! If you enjoyed this newsletter, please forward to a friend or colleague.
FinMed Partners is a management consulting and advisory business focusing at the intersection of payments/ fintech and healthcare. Our founders have developed deep expertise from decades of experience with health IT companies, healthcare providers and many players within the payments ecosystem. Investors, boards and executive teams work with us to maximize business value through strategic input and tactical execution.
FinMed Partners, an affiliate of PayGility Advisors, 100 Theodore Fremd Ave., #b1c, Rye, NY 10580-2875, United States
