Is Epic Systems to Madison what Dell was to Austin?

MADSON – The numbers behind the rise of Epic Systems, a pioneer-turned-leader in the digital health records business, may surprise even those who are familiar with the story.

• Projected year-end revenues of $1.2 billion in 2011.
• 260 customers in 2011, up from 227 a year earlier and 73 in 2000.
• 5,225 employees in 2011, up from 4,200 a year earlier and 400 in 2000. About 1,000 more people will be hired in 2012 – after the company sifts through the 150,000 or so resumes it gets each year. The average age of an Epic employee is 29.
• About 2.5 million square feet of space under roof on the Epic campus in Verona, with more than 1 million square feet on the way. This summer’s construction season will find about 1,500 construction workers per day on the Epic grounds.
• Epic books about 60,000 flights per year through the Dane County Regional Airport for its employees. That doesn’t count its visiting customers and advisory groups. Monday afternoon – the typical departure time for installation and service teams – is called “Epic Monday” at the airport.
• Perhaps the most telling statistic of all: 38 percent of patients in the United States are connected to their personal medical records through Epic software made and serviced in the Madison area.

The success of Epic Systems, born in 1979 with an $80,000 computer loan and a rented basement office on University Avenue, is a classic example of disruptive technology. While doctors everywhere were still scribbling on charts that were hard to read, easy to lose and nearly impossible to get from one hospital to another, Epic founder Judith Faulkner was envisioning a world in which health records could be built, checked and stored electronically.

Finance and banking, airlines and other industries long ago made the switch from paper to digital, but health care – often slow to embrace change and heavily regulated – has taken a while to follow.

Today, as health care confronts the need to enhance patient safety, improve the quality of care, better track clinical outcomes, control costs and meet the needs of a mobile population, digital health records have become an imperative. Toss in the rise of “integrated care,” the management model for much of the country, and Epic Systems found itself in a right time and place with the right products.

Steve Dickmann, Epic’s chief administrative officer, lifted a veil on the company’s story during a Jan. 24 meeting of the Wisconsin Innovation Network in Madison. The tale is compelling and simple: The company’s motto is “Do good. Have fun. Make money.” Epic does everything it can in house, right down to the company’s food service. It doesn’t acquire other software companies. It is employee-owned, independent and likely always will be. It is almost allergic to publicity – but quietly generous within the community.

Epic Systems is the largest private employer in Dane County and one of the largest in the state. Its effect on the local economy has become akin, at least in relative scale, to what Dell, one of the world’s largest producers of computers, means to its home town of Austin, Texas.

The emerging question is whether Epic will anchor a larger technology cluster that already includes a sizable biotechnology and medical device sector. That was part of the Dell story in Austin, where Michael Dell – much like Judith Faulkner – started in modest surroundings with limited capital. Today, the Austin technology cluster includes major facilities for IBM, Freescale Semiconductor, Samsung, Intel, Texas Instruments, Apple, Google and more.

Epic doesn’t acquire other companies or technologies – and it doesn’t spin them out, either. Like most companies, however, Epic has employee turnover. Those tech-savvy workers often wind up staying in Wisconsin and finding (or making) other opportunities. Many people from outside Wisconsin who apply to work at Epic learn more about the Madison area, even if they aren’t hired. As one software entrepreneur told me the other day, “Epic is the best thing to happen to me when it comes to finding talent.”

Epic’s story is truly epic. The challenge to Wisconsin and the Madison area is to learn how to build on it.

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