In this episode, Judy Faulkner, founder and CEO of Epic, brings her philosophy of, “you have to laugh to learn” to The Table. Judy shares from her years of leadership experience about her thoughts on the future of healthcare, future orientation for decision-making, and making a difference with the culture inside your organization.
Judy Faulkner is CEO and founder of Epic, which she began in 1979 in the basement of an apartment house with $70,000 in start-up money and 2 half-time assistants. Epic has grown by its bootstraps, without venture capital or going public.
Judy currently serves on the UW Computer Science Board of Visitors, is a member of the National Academy of Medicine’s Leadership Roundtable and of the Aspen Health Strategy Group. She has pledged that 99% of her assets will go to philanthropy.
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Renee DeSilva 0:06
Welcome back to The Academy Table. I’m Renee DeSilva, CEO of The Academy and your host and I’m happy to have you back with us again. I’m excited to share this latest conversation with Judy Faulkner who, of course, is the founder and CEO of Epic. I’ve had the pleasure of meeting and getting to know Judy a few times across the last couple of years and she’s an impressive entrepreneur whose willingness to think differently drives her success. In this conversation, that sentiment comes through in both serious and lighthearted ways. Our time together covered a lot of ground, but I’d like to call your attention to three takeaways. First, I’ve always appreciated how Judy stayed true to her conviction, especially early on keeping Epic as a privately owned company. She shared several insights on how that continues to apply to her leadership style today. Next, listen for Judy’s future orientation. Impressively, she zooms out 50 years when thinking about and guiding key decisions about Epic’s future. This forward-looking perspective also led to some great predictions around the next decade in healthcare and beyond. Finally, Judy likes the saying, “You have to laugh to learn.” Throughout our conversation I found myself laughing and learning as we went and I hope that you will do the same. With that, let’s head to The Table.
Judy, it’s so good to be with you again. Thank you for joining me at The Table.
Judy Faulkner 1:39
Well, thank you.
Renee DeSilva 1:40
We were last together in person in July and one of the topics that we were chatting about was the future of healthcare — we’re calling it Horizon 2030. If you were to think about the broad brush, where do you think healthcare is going in the future, a bold prediction maybe with a 10-year lens. What comes to mind for you?
Judy Faulkner 2:01
With a 10-year lens, what comes to mind for me is what’s happened in the past which is that there will be technology surprises. New capabilities exist in the technology that our software can run on and then we utilize that to do nifty new things. In addition to that, there’s going to be good stuff coming around with merging the genomics data with the EHR data, allowing us to look more deeply at what is happening to people and how we predict what can happen. There’s going to be the ability to take the results of research and bring it back to the practicing physician who is with the patient so that instead of having only 10-20% evidence-based medicine which is what there is now, so many decisions are not made on evidence even though everyone wants to, we can get evidence from observational data and bring it back. Those are the things I think we’re going to see that will make a big change. We call that, by the way, best care for my patient — taking that observational data, bringing it back, putting it in front of the physician who could see that here’s how patients similar to the one that you have in front of you now, here’s how those other patients have been treated and here’s what resulted — 18,000 were given drug A, 22,000 were given procedure B, etc. and the physician or clinician can review the results and make a decision. I think that’s going to be very transformative because with 18 million, I think it is now, patients in the database with their EHR data, there’s a lot of information that can help clinicians make decisions. To answer your question, I’m going to go a little bit further than 2030. Einstein said, I don’t know what weapons World War 3 will be fought with, but World War 4 will be fought with sticks and stones. That’s on one side. On the other side, you have the book Homo Deus which is saying that death occurred in the past from war, famine, and pestilence. Now, we don’t have many wars, we don’t have many famines, and we don’t have much pestilence that is as worldwide and as dramatic as we have had in the past, even though there’s some of everything. The author is predicting that in the end, medicine’s goal is to keep you alive and people will be able to be alive virtually forever. That is a long-term prediction that is there. I think that’s quite fascinating to think about.
Renee DeSilva 5:09
That is fascinating. In some ways, if you go back to maybe your 10-year view on this notion of best care for my patient, how I think through hardwiring evidence-based care, the Epic platform is uniquely suited to do that. I was struck in preparing for our conversation today that two-thirds of the US population is on Epic, about 225 million patients, all of that insight that your organization has the harness to collect. I know that you are doing some interesting research inquiry through Cosmos. Talk to us about how you think about Epic’s Health Research Network and what role you play in activating this best care for my patient anchored in this evidence-based approach.
Judy Faulkner 6:01
Cosmos came about because we saw that we had all that data and we wanted to take the information and utilize it to help make the right decisions and help do research given the wealth of data is there. Cosmos collects the data from our health system customers. The only hands-on users of the data can be the health systems that have contributed to that data. There’s a trust that it is their data and they’re very careful with it, the same as we are. We want Cosmos to be able to look through the data to be able to make all sorts of decisions. Some of the first things we looked at came about because someone would make a comment. For example, with COVID, there was a comment that “I can’t get a hold of ventilators because they’re not available so we’re putting our COVID patients on their sides or their stomachs and we think they’re surviving better.” Well, that took us right away to, “Let’s look it up. Is that true or not true?” We were able to find the survival rates on ventilators which were quite scary, actually. Then another study was done on if you’re taking anything prophylactically, will it help prevent COVID? We found that indeed, we couldn’t find anything that would. Hydroxychloroquine which was in question at the time was one of the ones that we didn’t find had any prophylactic effect. Those are some of the reasons we were doing EHRM. With Cosmos, one of the things I think is interesting is how we do EHRM. Given COVID, we needed to get things out fast. Coming up with answers, sending them to a journal, and waiting for months before it got published would not be helpful enough. We knew that we couldn’t have wrong answers but we didn’t have time for peer review. What we did was a different kind of peer review. We have two teams, they’re called Team A and Team B. Each has a clinician, a data scientist, a software developer, and other staff on it. The two teams get the same assignment and then they’re not allowed to talk to each other from then on until they’re done. When they’re done, we look at the results. If the results are the same, then we feel safe publishing them.
Renee DeSilva 8:43
That’s fascinating. It speaks to the power of crowdsourcing insight from within the health system community which is a big part of what we think about at The Academy. If we stay on that for a moment, when you think about the questions that get asked, how are those all driven? How are those questions formed? Are those all driven by your members and your team? Talk a little bit more about how you bring that to life and maybe give an example even outside of COVID where you found something interesting in the data that you then might want to activate on?
Judy Faulkner 9:15
The questions come internally. They come from our customers, a lot of them come from our customers who are asking us to look up this or look up that. They come from public health organizations. They also come from the government. Of course, public health is a subset of government. All of those areas contact us and ask us to look into this or that. Sometimes we publish what we find and sometimes we give the people the answers that they asked the questions about.
Renee DeSilva 9:46
I think that’s powerful, especially nowadays when there’s such an effort to distill fact from fiction and be able to get in there and get to it. I was doing a little bit of browsing before our conversation and we have all heard about this notion of, totally unrelated to a science-based thing, the “COVID 20” that people gained when they were in quarantine. The Cosmos dataset would say that that is, in fact, not true, that just as many people lost weight as gained weight, so another example of dispelling myths through the data.
Judy Faulkner 10:19
Well, the group it is true for is young adults. Kids gained more weight than adults did. Isn’t that interesting?
Renee DeSilva 10:27
It is interesting. It makes sense with the number of video games that were consumed in my household, at least. I can see how.
Judy Faulkner 10:35
That’s pretty funny.
Renee DeSilva 10:27
Yes, that’s great. One of the things that I’m struck by, Judy, is your story and conviction. Most people know this about you, but Epic continues to be a privately owned company. You co-founded it and still maintain direction and strategic influence over the organization. You’ve been pretty focused on not taking outside investment which today sounds like a really smart decision. I’m sure you had pressure along the way back in the late ’70s when Epic was launched. How did you stay true to your conviction on that?
Judy Faulkner 11:15
First of all, you had to believe in it. I have often thought that I was lucky that I didn’t get an MBA in business because it would have taught me all sorts of things that, if I had done them, I don’t think Epic would be as healthy and good as it is right now. Things like, don’t go out for venture capital because they’re going to want to flip you. I didn’t want to put all the effort I was putting into growing Epic just to sell it. To some extent, I’ve thought of it as, to grow Epic, I had to spend a lot of time working through all sorts of things — the software, helping customers, installs, the testing. I didn’t have as much time as I would have liked to be with my children. Sometimes when I think of the sale or the potential sale of Epic I think, I can’t put a price on my children so how could I put a price on Epic? That might not make sense.
Renee DeSilva 12:19
That does make sense.
Judy Faulkner 12:22
That’s what occurred to me. Yes, there were pressures to sell Epic from some of the original shareholders, but that didn’t happen. We didn’t do that. Then, of course, going public is the other big thing people typically do. I’ve always wondered, why would you want a whole bunch of people owning your stock where the only thing they care about is the return on investment? Really, what we care about is, is it helping the patients? Is it helping the health systems? How is our staff doing? We care about all of those things too. It made sense to stay private and to have our ownership be our staff.
Renee DeSilva 13:02
Judy, one of the things that I’m struck by is how clear of a decision-maker you are. You have perspective. Talk to us a little bit about how you approach decision-making.
Judy Faulkner 13:13
Many decisions I make by jumping 25 to 50 years ahead, figuring out what Epic will want at that time, then coming back and making the decision so that later on they will say, that’s a good decision. An example of that is when we were first building the campus. I was asked, “Do you want parking to be underground or above ground?” Now, above ground is about $400-$800 a spot for a car. Underground was like $14,000-$18,000 for a spot for the car. It seems like a tough decision because it’s so expensive. However, I jumped 50 years ahead and I thought, everybody is going to be very happy if it’s underground. This is Wisconsin, it’s cold, you’ve got to scrape the car, they’d have to walk distances and be unattractive, all those things. I came back to today and the answer was easy because of going forward. The hard part was that it was expensive, but it was the right answer. I said underground.
Renee DeSilva 14:25
Staying on that for a moment, you seem to balance cutting through the noise on decision-making well. Having your conviction, balancing that, but I also hear you talk a lot about your customers and your employees. How do you think about getting input, balancing that input, and then ultimately moving forward with whatever you think is the right direction? This notion of getting input but then also staying the course in the direction that you feel like is the right way to move.
Judy Faulkner 14:55
One of the secrets to running a company well is making sure that there’s a lot of ownership distributed throughout the company. We have people developing software who own that and they care because they own it. We have people doing the implementations who work with our customers and it’s on their shoulders and they own it. The making of decisions is distributed significantly across those people who have to live with those decisions directly. Now, I do make a lot of decisions but when you consider we have about 11,000 people and we’re in 50 countries, there’s no way I can make a huge number of the decisions. I might make some big decisions such as, do we decide to build some more buildings. Other than that, most of the decisions that are made are made by the individuals for whom the decisions mean the most and they have to live with them.
Renee DeSilva 16:03
Over time, as you’ve led this company, reflect a little bit about the current state. Where do you find yourself spending most of your time these days?
Judy Faulkner 16:13
If you want to look at just recently, it was the user’s group meeting, getting prepared for it, giving a talk, feeling silly in a costume, but staying there.
Renee DeSilva 16:23
What was your costume this year?
Judy Faulkner 16:26
I was a woodland sprite. The theme was legends and lore. You feel silly in those clothes. I even had wings on. I’ve said no to anything that involves ears or tails.
Renee DeSilva 16:47
Judy Faulkner 16:49
You feel silly, but there’s a saying that goes, you have to laugh to learn. I like that saying. Can you imagine hours of just going over software? That would be so boring. How do you do it in a way that people find interesting? You have to bring humor to it.
Renee DeSilva 17:07
Yes, I love that. I know that the Epic headquarters has sometimes been referred to as an adult Disney because you have spent a lot of time thinking about creating space for levity and joy day-to-day. I wonder, given how important that campus feel for you has historically been, how has the return back to campus been for you and your colleagues?
Judy Faulkner 17:30
Well, there are a couple of things. First, returning to campus has gone quite smoothly. Most of our staff were voluntarily immunized, were vaccinated. We were around 97% vaccinated when we said that everybody does have to be vaccinated and now we’re almost 100%. We’re very close to that. One thing I will say in your comment about our staff, 83% of our expenses go to staff, about 10% goes to the campus, and the remainder is other miscellaneous things. Our campus helps us hire good people and our campus helps us create an environment for productivity. There are a lot of things built in our campus besides the fact that the buildings are themed that people might not realize have such an impact. We have private offices. We’re trying to have private offices for every person who wants one, which is usually around 80% of our staff. You get productivity increases when you can concentrate with the door closed and think about what it is you have to do, so we have private offices which increase productivity. The campus is fun. It helps us hire better. If we can increase productivity through hiring better and through the increase that you get through private offices, and our staff will give you significant numbers of what percent they think those two together add up to, but if we can increase it by 20% total, that pays for every building, every blade of grass on the grounds, every brick. It covers it because of the difference of the 10% to the 83%.
Renee DeSilva 19:32
Yes. Even more on an emotional level you see that that’s what people miss. People miss coming together, locking eyes to eyes with their colleagues, and feeling that they’re part of a shared mission. It feels like Epic is probably one of the few companies that have that esprit de corps tied to the campus environment. I’ve never been, but at some point, I would like to visit because it sounds like a really special place to be.
Judy Faulkner 19:57
You are most welcome to visit. It would be very nice to have you.
Renee DeSilva 20:01
I would love that. Let me ask you two other questions on this topic of leadership. One is, I’m struck by what you have been able to accomplish professionally. You also have three children. You’ve mentioned, and I feel this way too, that I don’t always day to day feel like I contribute to work as much as I do at home or sometimes it’s vice versa. I wonder if, what you accomplished when you launched Epic, co-founded it in 1979, you fast forward to 2021, so few women in CEO roles today, certainly even fewer founders, do you ever dwell on that or is that something that hasn’t necessarily been in your consciousness?
Judy Faulkner 20:45
I don’t think about it and that helps because if you don’t think about it, you’re just a human being doing the work. It is very freeing to think of it that way. What I do think about more is what we discussed earlier which is, staying private makes such a big difference.
Renee DeSilva 21:04
Yes, controlling your destiny. In some ways, that’s where the power comes too because it shifts the norms or established power dynamics. I have deep respect for that perspective. I appreciate you sharing that. I’ve also heard you say that you have no plans to retire, that you feel like that is not on your radar. How do you stay energized? Any new thinking on that? Do you still feel like you’re going to wake up every day and continue to do great work?
Judy Faulkner 21:36
It’s not even waking up every day — it’s at night, it’s what you think about as you go to sleep, it’s what you wake up in the middle of the night thinking about, it’s what you wake up in the morning thinking about. There’s so much to do and there are so many different directions we’re going at once. The electronic health record is the engine that is powering so many different things that we’re doing that go beyond the electronic health record and that keeps us very busy, such as Cosmos and EHRM and another thing we’re doing called Epic Share, working with specialty diagnostics, working with payers, and so many other areas that we’re doing. A lot is going on. You would need a few lives in parallel to do everything.
Renee DeSilva 22:22
I’m sure. When you’re not at work, where would I find you if you were to let your hair down, you were relaxed, you weren’t thinking about all that remains to be done professionally. What would you do to unwind?
Judy Faulkner 22:35
Well, maybe three things. One, I like to read. There’s a lot of reading that goes on. Two, I like the garden, especially the vegetable garden because I like to cook and make interesting meals with interesting spices. Third, listening to a show about how to make things. I like that.
Renee DeSilva 23:00
That’s perfect. That’s a perfect lead-in to my final question. We talk here a lot about the power of a table. When you have people around you that you enjoy talking to, you have created a good meal for them to share, I have probably ordered a good meal for them to share, if you could pick any two people to invite to that table — they could be fictional, they could be someone alive, they could have passed on — who would you invite to your table and why?
Judy Faulkner 23:24
I would go to the future. I would invite someone 200 years from now to find out what was going on. I would then invite someone who is way at the end of the human lifespan before there were no more humans in our world. That’s who I would invite.
Renee DeSilva 23:43
Fascinating. Well, I appreciate getting to know you a bit more today. Thank you so much for joining me. I will have to make a trip to your campus at some point in the not-so-distant future.
Judy Faulkner 23:52
Thank you very much. It’s been nice speaking with you.
Renee DeSilva 23:56
Thanks again for joining me at The Table. The Table is a podcast produced by The Health Management Academy. Make sure you catch future episodes by visiting our website theacademytable.com or by subscribing on the podcast platform of your choice. If you have suggestions for topics or guests, I’d love to hear from you. Please drop me a note at email@example.com. I look forward to talking with you soon.