Who Owns Epic? It‘s Privately Held by Founder Judith Faulkner

Epic Systems Corporation is a private healthcare software company that is majority owned and controlled by its founder Judith R. Faulkner. Unlike competitors such as Cerner, Epic has resisted acquisition offers and remains independently owned under Faulkner‘s leadership.

Judith Faulkner – The Billionaire Boss Behind Epic

Judith Faulkner founded Epic Systems in 1979 and continues to serve as the company‘s CEO today at age 79. She owns over 40% of Epic‘s stock and retains full decision-making authority over the privately held firm.

Forbes estimates Faulkner‘s net worth at $6 billion as of 2021, making her one of the wealthiest self-made women in America. She has never taken Epic public or sold it to another company, desiring to keep her life‘s work private and independent.

So how did Faulkner build such a massively successful healthcare software business? After receiving a master‘s degree in computer science in the 1960s, she worked as a programmer at GE Medical Systems. Faulkner later decided to launch her own medical software company after identifying an unmet need.

"I had an elderly relative who was seeing many doctors and they were not sharing information. I wrote a database for the doctor‘s office but they didn‘t want it. That‘s when I realized that hospitals were the ones that really needed to share the information." – Judith Faulkner (Source)

Faulkner founded Human Services Computing in 1979 and soon launched Epic‘s first EHR system in the 1980s. Her focus on creating intuitive, easy-to-use software for managing patient records struck a chord. Epic steadily grew over the next decades by selling solely to large hospitals and health systems.

The company really took off in the 2000s as hospitals digitized their records. Epic became the top choice for its comprehensive EHR platform and reputation for reliable implementations. Faulkner kept Epic privately held, resisting buyout offers as revenues and market share expanded dramatically.

Epic‘s Growth Into a Healthcare Tech Giant

From humble beginnings, Epic Systems has grown into one of the largest health IT companies:

• 250+ million patient records are managed on Epic‘s software (Source)
• 10,000+ employees work at Epic as of 2021 (Source)
• $3 billion+ in annual revenues, up from just $30 million in 1997 (Source)
• 2,500+ hospitals and 45,000+ clinics use Epic across the U.S. and globally (Source)

Epic now controls at least 50% of the EHR market share in major U.S. regions, up to 90% in some metro areas like Madison and Seattle. For context, its next largest competitor Cerner holds 13% market share nationwide.

This market dominance has made Epic a strategic asset for hospitals looking to improve care coordination and data sharing within their networks. However, it has also led to growing concerns about Epic enabling regional monopolies and inflating healthcare costs. I‘ll discuss these impacts next.

Epic‘s Healthcare Dominance – Pros and Cons

Epic‘s widespread adoption has transformed medical record keeping and data accessibility for providers. But its commanding market position also raises reasonable concerns.

Potential Benefits of the Epic Model

• Smoother patient care and hospital transfers within Epic networks
• Increased digitization and accessibility of health records
• Enhanced ability to analyze population health trends
• Epic‘s stability compared to fragmented systems

Criticisms of Epic‘s Market Power

• Limited ability to exchange data between rival EHR systems
• Epic negotiating high software fees from "captive" hospitals
• Concerns about stifled innovation and lack of platform competition
• Poor usability and high change resistance from physicians

Opinions vary on whether Epic‘s dominance has been a net positive or negative for U.S. healthcare. But it is clear that Faulkner‘s company has fundamentally shaped the patient data landscape.

Next let‘s examine how Epic has avoided selling out to competitors, in contrast to other top EHR vendors.

Epic Remains Independent While Competitors Sell Out

Epic has been approached with buyout or partnership offers by numerous major tech giants over the past decade, including Amazon, Google, Microsoft, and Oracle.

However, Judith Faulkner has repeatedly declined these deals. She maintains majority control and has structured Epic‘s ownership to prevent any forced takeovers. Employees gain shares through an ESOP (employee stock ownership plan) rather than external investors.

Compare this approach to leading EHR competitor Cerner:

• Cerner accepted a $28 billion acquisition offer from Oracle in 2021
• Allscripts sold off its EHR business to private equity firms Veritas Capital and Evergreen Coast Capital in 2018
• Athenahealth sold to Veritas Capital for $5.7 billion in 2019 and went private

Meanwhile, Epic remains under founder control as a private corporation after 40+ years. This independence allows long-term thinking but also brings challenges like retaining talent.

Now let‘s examine Judith Faulkner‘s leadership philosophy and how she built an internal culture enabling this success.

Inside Epic‘s Unique Company Culture Under Founder Faulkner

In contrast to the Silicon Valley model, Judith Faulkner built Epic as a privately held company without outside shareholders or a profit motive. Employees own roughly half the stock.

Faulkner‘s approach focuses on sustained growth, maintaining control, and corporate stability rather than chasing short-term gains. She fosters intense loyalty among employees leading to low turnover.

"We want employees who want to build a life at Epic, not just gain some skills before moving on. One of our best retention tools is hiring carefully for culture fit." – Faulkner (Source)

Some key aspects of Epic‘s unique culture include:

• Campus-like headquarters – Epic built an imaginative corporate campus in Verona, WI to help retain talent

• Long tenures – Many Epic employees stay 5-10+ years on average

• Work hard, play hard – Epic has demanding work norms offset by fun social events

• Talent development – Faulkner emphasizes growing employees over their entire careers

• Avoid buyouts – Staying private and independent is central to Epic‘s mission

Faulkner herself even learned to code in the 1960s, enabling her to better understand software development. This technical expertise helps earn respect from Epic‘s engineers.

While Epic catches flak for being insular, its internal focus and stability are key to avoiding the acquisition fate of competitors. Judith Faulkner‘s vision and leadership style has steered the company‘s path over four decades.

Outlook for Epic‘s Future Independence

Barring an unexpected change of heart from Judith Faulkner, it seems highly likely that Epic will remain a private independent company for the foreseeable future.

Faulkner shows no signs of retiring at age 79 and recently penned a letter to employees stating she has provided for Epic to stay private after she dies. She retains full decision-making power given her majority ownership.

Of course, it‘s impossible to completely predict the future. There are still scenarios where Epic could get acquired:

• Faulkner decides to sell – If she agreed to a transaction, her controlling stake could enable a buyout.

• Employee-shareholders vote to sell – The ESOP could hypothetically override Faulkner sometime down the road.

• Epic struggles after Faulkner‘s departure – Loss of her vision and leadership could necessitate a sale.

That said, Faulkner clearly intends for Epic to remain stand-alone under trusted leadership after her tenure. She has engineered the ownership structure and management pipeline to enable this outcome.

So in the end, the company‘s fate is closely tied to Judith Faulkner‘s vision. And she has consistently chosen independence even as competitors cash out. That is the core reason why Epic has avoided acquisition while growing into a dominant force in healthcare software.