Epic founder and CEO Judy Faulkner is enlisting the help of health system executives to ensure the company she started in a basement in the late 1970s never gets sold.
As part of her succession plan, the 82-year-old has dedicated three healthcare leaders to the task of suing anyone who doesn’t carry out her wishes after she’s gone: namely, that Epic never gets acquired, buys another company or goes public.
“We have three CEOs from our CEO Council, which meets once a year,” Ms. Faulkner recently told the “Freakonomics Radio” podcast. “Their job is to take anyone to court who doesn’t vote according to the rules.”
Ms. Faulkner currently retains all of the company’s voting shares, which upon her death will go to a trust governed by four family members and five senior Epic employees legally obligated to follow her rules. Another is that new stock can’t be created to get around the rules.
In the April 24 podcast, she didn’t reveal the three health system CEOs’ identities as she said “we just changed who they are” and didn’t have their names in front of her. But she noted that they “volunteered to do this and were very interested in doing it.”
Asked by Becker’s who the CEOs are, an Epic spokesperson replied: “We will not be providing the names of the health system CEOs. The names change over time.”
Ms. Faulkner is obviously deeply devoted to the company, which grew from those humble beginnings to the nation’s largest EHR vendor. She believes its success can be attributed to the first two of the 10 Epic commandments, which are posted in bathrooms around the company’s sprawling 1,670-acre Wisconsin campus: “Do not go public. Do not acquire or be acquired.”
“If you look at some of the other companies out there who do software and they acquire different products, it’s not the same as having one product,” she recently told Katie Couric during a live interview at Epic’s headquarters. “Terminology differs, colors differ, styles differ, placement differs, coding schemes differ. So when you acquire a product, it no longer works so smoothly for your users. So that’s really why, because it would corrupt the consistency of the underlying software.”
Ms. Faulkner added that she can’t think of a “single advantage” of being a publicly traded company. What about public accountability? Ms. Couric asked.
“I think it is the case that the public companies have to make things public, and we can keep them private, but we share an awful lot of information with our staff and with our customers,” she said. “And usually what they’re sharing is financial information, and we don’t focus on it nearly as much as a publicly traded company who [has] to look at every 90 days and what is going to be their revenue and their profit margins and everything else every 90 days. We don’t have to do that. And so it would focus us, I think, on the wrong things that aren’t in the best interest of our customers.”
Beyond outright rules, her succession plan also includes some recommendations. The very last one: that the hold music at Epic should be classical. Why?
“Because I like it,” she told “Freakonomics Radio.” “It just feels like Epic to me.”
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