Timothy Hughes
On the morning of Sept. 24, 2004, the U.S. Food and Drug Administration stunned the American medical system. Regulators announced that Merck and Co. was withdrawing Vioxx, a hugely popular painkiller prescribed to more than two million people. The problem? There was newly revealed evidence that Vioxx users were keeling over with heart attacks and strokes.
At the Cleveland Clinic, one of the nation's largest private medical centers, administrators sprang into action. They tapped into their electronic medical records system, identified 11,699 patients receiving Vioxx and 842 doctors who had prescribed it.
Within an hour, the Ohio institution pulled Vioxx from its medication stocks; within seven hours, it had deactivated all prescriptions and notified the doctors. Within 22 hours, letters were in the mail explaining to patients what the heck had happened.
The rapid response, a subsequent research study found, owed to breakthrough advances in electronic medical records systems.
Electronic medical records, which allow for the easy manipulation of patient information and the convenient sharing of results, represent an epochal advance over the bulky paper files of the past. EMRs, as they're called, have the potential to transform the practice of medicine in the 21st century, including putting patients a few clicks away from personal health records once locked up in clinic and hospital file cabinets.
At the center of this transformation is Epic Systems Corp., the purveyor of the Cleveland Clinic's records system. This privately held software company has enjoyed a storied rise to prominence, from a tiny shop in the shadows of UW-Madison in 1979 to a 3,000-employee behemoth with state-of-the-art offices in Verona and west Madison.
Epic's genius has been not just devising a digitized system for patient records but a far broader integrated system of health-care management. Epic's suite of programs mesh scores of other operations - admission, discharge, pharmacy, specialty care (cancer, diabetes and so on), billing, insurance benefits, referrals and more - in a common database.
For tech heads, this is "Wow!"-worthy. Indeed, the company, which is in constant expansion mode, says it sorted through 40,000 job applications last year. One condition of Epic employment: You must move to the Madison area.
Epic's ascent has been so impressive and its prospects seemingly so bright as to prompt the boldest question:
In the next five to 10 years, will Epic put Dane County on the global map for information technology and commerce, like Microsoft did for Seattle, Dell did for Austin and Hewlett-Packard and Sun Microsystems did for Palo Alto?
Bursting at the seams
Epic Systems may be the single most important company in Dane County today. The funny thing is that most area residents were oblivious to Epic's existence until 2002, when the often media-averse company began a well-publicized search for a new headquarters (see "Epic Decision," 5/17/02).
Ensconced in its coolly remodeled headquarters in the old Odana School at 5301 Tokay Blvd. and vast amounts of rented space in nearby Westgate Mall and University Research Park, Epic was still bursting at the seams.
Epic's decision to build its new headquarters west of Verona on 400 acres of farmland will be a hugely consequential land-use decision for Dane County. But what's striking in looking back is how small Epic was in 2002, when that decision was made, and how its subsequent growth has surpassed even the most optimistic projections.
The company had about 700 employees in 2002, up from 400 in 2000 but not yet a quarter of its current workforce. The $205 million Verona campus - part Disneyland, part Googleplex, part Futurama, part Green Dream - is already too small. Verona is fast-tracking a second campus constellation on the site that will include four 150,000-square-foot buildings and a huge 2,100-car underground parking ramp that will open in 2009.
Epic officials decline to put a price tag on the second campus, but it's a safe bet to say that between the two complexes Epic will have invested close to $500 million in its Verona headquarters.
"We've grown faster than any of us ever anticipated," says Stephen Dickmann, Epic's chief administrations officer. Even more telling, he admits he's pondering a third campus on the 400-acre site.
"If you're working on a project like this and you're not thinking about what comes next, you're making a mistake," he says.
Because Epic is privately held, financial numbers aren't easily verifiable, but Dickmann puts Epic's 2007 gross revenue at $502 million, up from a reported $420 million in 2006. He won't divulge the company's 2008 revenue target but it will doubtless be substantially higher.
The company only has about 170 customers, but most of them are big fish like Kaiser Permanente, Harvard Community Health Plan and the Sloan-Kettering Cancer Center. Madison's large providers use Epic as well, though UW Health and its doctors are still in the set-up stage. Dickmann says smaller operations can't afford the Epic program. (As one health-care journalist put it, Epic's services are "very expensive, but also very good.")
Still, when the company finishes installations for its current customers, more than 60 million Americans - 20% of the population - will have their health records detailed on Epic software, Dickmann says.
The ever-expanding patient base translates into an ever-expanding Epic workforce. By the end of 2008, Dickmann expects the company's staff to number between 3,400 and 3,500. By the end of 2009, it could hit 4,000.
Epic's corporate ambitions are widening as well. The company opened an overseas office in Holland and quickly landed two contracts. "We are actively pursuing international business," says Dickmann, confirming a major strategic move.
Moreover, Epic is rewarding veteran employees with paid overseas sabbaticals, ostensibly to encourage longevity and broaden perspectives, but perhaps also to strengthen overseas contacts for business.
It's all kind of head-spinning, especially after touring Epic's wonderland campus. The notion that Epic could be another world-class information technology colossus isn't that farfetched.
Faulkner's handprints
Judy Faulkner, the prime mover behind Epic, rarely talks to the press and then only on her terms. She moved to Madison from Pennsylvania in the 1960s to do graduate work in UW-Madison's computer sciences department, earning a master's degree in 1967. She lives a determinedly low-profile life.
A contemporary photo of Faulkner, 64, is impossible to find, and a brief trade-news account of her 2002 speech to the Accelerate Madison tech group (she reportedly stipulated that her talk could not be recorded) is treated by Epic watchers as the Rosetta Stone for understanding Epic's idiosyncratic approach to personnel.
Among the revealed insights: Faulkner justifies the company's focus on hiring really smart young people right out of college rather than experienced candidates, because newbies are easier to mold into an "Epic person." (The company figures it needs three years to train new grads, and six years for experienced recruits, who Dickmann says must "unlearn" things to grasp the Epic way.)
Reclusive as she is, Faulkner's handprints are all over Epic. According to Dickmann and others, she deals personally with clients; guides the personnel policy; directs monthly staff meetings; leads the annual users' conference (one year dressed in a Superman outfit to reflect the lighthearted conference theme); makes strategic decisions; and is deeply involved in planning the new headquarters.
The new campus, designed by architects who (tellingly) have worked with both Microsoft and Disney, is a spare-no-expense marvel where every beguiling detail seems focused on encouraging creativity and productivity.
Why would Epic employees leave the campus for lunch at a Verona restaurant (and waste time commuting), when they can eat gourmet organic food offered at a discount price in the Epic cafeteria? That cafeteria bears a passing resemblance to the subdued upscale setting of the Sundance theater complex.
Faulkner's essential geekiness and love of fantasy is revealed in the campus detailing. The main entrance announces Epic's "intergalactic headquarters" at 1979 Milky Way (yes, that's the company's address). A fanciful space theme, among others, runs through the first campus, including the Ganymede and Cassiopeia buildings.
A reputed perfectionist, Faulkner is said to have grown unhappy with the color of the bricks ordered for the new campus, ate the cost of replacing them and then donated the 300,000 unwanted bricks to Verona for cladding a new school and library.
Not your usual corporate titan, Faulkner and her husband, Dr. Gordon Faulkner, are unabashed liberals who donate regularly to Democratic candidates like Gov. Jim Doyle and County Executive Kathleen Falk. Much to the irritation of the staunchly Republican Wisconsin Manufacturers & Commerce, the couple have also helped finance One Wisconsin Now, an advocacy group that strives to be a liberal counterweight to WMC's frequent propaganda campaigns.
A WMC communications staffer condescendingly referred to Faulkner as "that computer lady" when discussing her political efforts. But Faulkner's business acumen - especially her take on the evolving health-care industry - is held in awe by colleagues and outsiders alike.
"Judy has a great innate sense of where the industry is going," says Dickmann.
"A very keen sense of the business," agrees developer Terrence Wall, who leases Epic office space in west Madison.
"Very smart, very passionate, very focused," says Tom Still, president of the Wisconsin Technology Council.
"She runs a wonderful company," gushes Jan Moen of Accelerate Madison. "So many young, talented people want to move here and work for her."
Barton Miller, a UW-Madison professor of computer sciences, has watched Faulkner in action and is impressed with her vision for improving health care. "She's just a really good example of a leader," he says. "She's very direct and won't BS you. She's willing to tell a customer no. She's willing to lose a contract rather than sell something that doesn't make sense."
Miller's colleague, professor Marvin Solomon, puts his finger on something else: "Judy seems like a captain of industry, but on the other hand, she's very shy and modest - and funny."
He tells the story of Faulkner attending a dinner as a member of his department's board of visitors. "Somebody asked her, 'What do you do?' And she said, 'I have a software company.' Other people started laughing - like, hmmm, that's a modest way to describe it."
'Do good, have fun, make money'
Near and far, people are struck by the Epic mystique.
When readers of Healthcare Informatics, an IT magazine for nerdy insiders, were recently asked what company they wanted to read about, they clamored for an Epic story. Not a surprise, noted the reporter who subsequently profiled Epic, because the company has "a truly unique" operating style - to the point where some people describe Epic as a cult.
That characterization is unfair, but Epic does cut its own path and seems to delight in defying the conventional wisdom. Begin with the company mission statement: "Do good, have fun, make money." Not the sort of thing you'd expect to find at, say, IBM.
The company has no business plan, believing such memorialized strategizing quickly becomes outdated. Odder still, Epic has no marketing department and the smallest of sales staffs (those few sales reps are not paid on a commission basis either). Instead, the company relies on word-of- mouth and its burnished reputation in the industry for excellent software and customer service.
"We don't tolerate mediocrity in our product and how we service a customer," says Dickmann. "We make sure a customer succeeds. It's a real passion for us. We always deliver more than we promise."
Dickmann says this matter-of-factly, not as a salesman's boast. His tone suggests excellence is somehow embedded in the Epic genetic code. And maybe it is.
"Our philosophy is that you can't consistently develop and deliver the best product and service without hiring the best people," says Dickmann. As one former employee notes of the thousands of rejected job applicants, "It's easier to get into medical school than Epic."
Epic is famous for its rigorous screening of job applicants and providing its staff a world-class work environment. Private offices for everyone (not the cubicles so common in the tech world), imaginatively designed conference rooms for work-team meetings, art-filled buildings, gourmet food, an anything-is-okay dress code, generous stock plan, the sabbatical program and more. All to spur creativity, productivity and loyalty.
"The idea is that you want to keep people hanging around, working long hours," says Solomon. "They try to make it as comfortable as possible."
Mark Bugher, director of the University Research Park and board chair of the Greater Madison Chamber of Commerce, agrees: "They expect employees to work hard, perform and deliver. The company will provide whatever it takes to do things well."
The former employee puts a less charitable spin on the Epic mystique: "Faulkner has a New Age company, and she has progressive politics, but when it comes time to make decisions for her business, the business comes first."
Others criticize the company for trying to squeeze too much out of its workers.
"What's a typical day like?" groused "Chunky Guy" in an Epic chatroom. "Well, if you['re] not one of the 50 or so in the elite inner circle, your workday starts at 7 a.m. and ends about 11 p.m. So, office attire is very casual and in need of laundering because you don't have time or you've forgotten where the washing machine is." Faulkner, he adds, is "a control freak, albeit a sheltered one."
An Epic staffer replied: "Chunky Guy is the same guy who cries and whines on every blog about Epic and says the same UNTRUE garbage. The only person here until 11 p.m. is Judy. Most people on my team work about 40-45 hours a week, maybe a little more right before a release deadline."
Tremendous freedom
Faulkner and her management team have never followed the usual dot-com recipe of mixing bright ideas with venture capital, then cashing in when the company goes public with a stock sale.
Instead, the company remains privately owned, which gives it tremendous freedom to set its own course. Management doesn't live in fear of a hostile Wall Street upsetting its plans.
Epic's local ownership is also a huge plus for Dane County's hopes for a high-tech future. "You're not going to have a corporate CEO move the headquarters to Atlanta or St. Louis," says Bugher in a pointed reference to, respectively, Rayovac and Famous Footwear leaving town. "Epic will always be here, as far as I know."
Big-time, too. Epic has made a seemingly irrevocable commitment to doing business in Dane County, ruling out both regional offices and off-shore programming in the Third World. "We can attract very good people here," says Dickmann. "We can develop the best possible product here...for integrated software when we have everybody working very close together."
There could not be better news for Dane County's high-tech future.
