Judy Faulkner, founder and chief executive officer of Epic Systems Corp., during the Forbes Healthcare Summit in New York, Dec. 5, 2023. Michael Nagle | Bloomberg | Getty Images
Do not go public. Do not acquire or be acquired. Software must work. These are the first three of the 10 commandments splashed across bathrooms and breakrooms at Epic Systems' sprawling 1,670-acre campus in Verona, Wisconsin, just southwest of Madison. It's not the wackiest part of working at the health-care software giant. Once a month, most of the company's 14,000 employees pack into an underground auditorium called Deep Space for a mandatory staff meeting, which some jokingly refer to as "work church." Executives go over company news and objectives. They also lead a grammar lesson, such as whether it's OK to end sentences with a preposition and when to use "who" or "whom." Epic's CEO is 82-year-old Judy Faulkner, who started the company in a Wisconsin basement in 1979 and has helmed the enterprise ever since. En route to building a business with $5.7 billion in annual revenue, Faulkner has kept significant distance from her tech peers, both physically and otherwise. Epic is about 2,000 miles east of both Seattle and Silicon Valley, and the company has never taken money from venture capitalists. "I've described her as a female cross between Bill Gates and Willy Wonka," Dr. Eric Dickson, CEO of UMass Memorial Health, said in an interview. The hospital system is an Epic customer, Dickson said, adding that he's known Faulkner for around 20 years. While Wonka is, of course, a fictional character, Gates for many years was the world's wealthiest person, thanks to his enormous stake in Microsoft , before donating his way to 14th on the Forbes billionaires list. At the top of the leaderboard is Tesla's Elon Musk, followed by Oracle's Larry Ellison, Meta's Mark Zuckerberg and Amazon's Jeff Bezos. Faulkner ranks 430th, with an estimated net worth of $7.8 billion, based on what Forbes says is her 43% ownership of Epic. The publication lists Epic as among the five largest private U.S. tech software and services companies by revenue. Epic is best known for its dominance in electronic health record, or EHR, software. An EHR is a digital version of a patient's medical history that's updated by doctors and nurses. About 42% of acute care hospitals in the U.S. use Epic, putting it way ahead of Oracle Health, which is in second place at 23%, according to an April report from Klas Research. Oracle acquired its way into the market with the $28 billion purchase of Cerner, a deal that closed in 2022. Epic says its technology is used in 3,300 hospitals and 71,000 clinics and by 325 million patients worldwide. Starting Monday, thousands of health-care executives will descend on Epic's corporate headquarters for the company's Users Group Meeting, one of its largest annual on-campus events. As ubiquitous as Epic's technology is across much of the health-care sector, doctors, hospital administrators, startups and patients have their share of complaints about the software's user experience and its interoperability, or ability to work with other tools. "With half a million or so clinicians using Epic, there will be some who find it easy and some who find it difficult," an Epic spokesperson said in a statement. Some folks might question Epic's commitment to its third commandment, but there's no doubting the company's allegiance to the first one. From Epic's early days, Faulkner has been averse to the idea of running a public company and what she's called the "tyranny of the quarter." She said she came to that view after researching public companies and reading shareholder comments. "They were vitriolic, in many cases, because the only thing they were looking at was return on their investment," Faulkner told CNBC. "Sometimes, there's a lot more than that." Without the benefit of public stock, Faulkner's wealth doesn't multiply at the same rate as that of her fellow tech founders and CEOs. She's fine with that. Faulkner, who rarely grants interviews, agreed to sit down for a half-hour chat with CNBC at Epic's headquarters, where office buildings are themed, with many inspired by fiction, including "The Wizard of Oz," "Alice in Wonderland" and the Harry Potter stories. The interview took place in the Andromeda building in a conference room called The Cottage, which is connected to her office. Two of the walls are plastered with quotes such as "The geek shall inherit the Earth" and "All lasting business is built on friendship." Faulkner's dog Tundra, a fluffy Samoyed, also made an appearance.
'The Trust Protector Committee'
A sign on the Epic campus says "Epic Intergalactic Headquarters." Courtesy: Epic
Faulkner celebrated her 82nd birthday Monday. While she has yet to publicly disclose when she plans to step down from her role, Faulkner confirmed that she has a succession plan in place that ensures Epic will remain privately held and constructed firmly as she envisioned long after she's gone. Faulkner has never sold any of her voting shares, and that stock will be transferred into a trust after her death, according to Faulkner and Epic. The plan for now is that the trust will be governed by a voting committee made up of Faulkner's husband, Dr. Gordon Faulkner, a retired pediatrician; her three children, and five longtime Epic employees, though Faulkner said she might include some additional staffers to make sure enough voices are represented. Members of the committee can't vote for the company to go public or be acquired, among other rules, as she has previously disclosed. Some of the provisions are less consequential, such as a recommendation that the trust's telephone hold music should be classical. "I like classical music," she said. "I think when I was a child that it was played in our house a lot, just on the radio, just on the record player." For further safekeeping, Faulkner established an oversight board called "The Trust Protector Committee," Epic said, consisting of three health-care leaders — all Epic users. Its job is to sue members of the trust's voting committee if they don't follow the rules. The names of members of the voting committee and oversight board won't be released, Faulkner told CNBC, but she said she's identified who she would like to participate. After running Epic for the past 46 years, Faulkner has amassed her fair share of admirers and critics, with some in the latter camp even taking Epic to court. But Faulkner continues to flout conventional business practices and has built Epic, despite its flaws and complexities, into the most powerful technology company in U.S. health care. Reflecting on her approach to leadership and decision-making, Faulkner said, "Just have the guts to do what you know is the right thing to do." CNBC spoke with two dozen Epic customers, former Epic employees, industry experts and people close to Faulkner for this article, some of whom asked not to be named in order to speak freely. Details about Faulkner's personal, educational and professional history were obtained from Faulkner directly, her Epic website testimonials, Epic, obituaries, news reports and publicly available records.
Sometimes when I do something that's tough, I think of my mother, who went to jail in her 80s for protesting at a nuclear arms site, and I think, 'I'm my mother's daughter.' Judy Faulkner CEO of Epic
Faulkner and her two siblings grew up in Erlton, New Jersey, now a part of Cherry Hill. Her father, Louis Greenfield, was an independent pharmacist who ran his own store, complete with a soda fountain. Her mother, Del Greenfield, was a peace activist who was involved with the South Jersey Peace Center and the Oregon Physicians for Social Responsibility, which shared in the 1985 Nobel Peace Prize for its work in preventing nuclear war. "Sometimes when I do something that's tough, I think of my mother, who went to jail in her 80s for protesting at a nuclear arms site, and I think, 'I'm my mother's daughter,'" Faulkner said. Faulkner's parents, who both died in 2007, are honored at Epic's campus. Employees can get ice cream at Lou's Soda Fountain, while Del's Nobel Prize certificate hangs in the hallway across from The Cottage. Faulkner discovered a love of math as a seventh grader, when her teacher would leave puzzles on the blackboard each day, she said in one of her testimonials, the short stories and anecdotes she shares once a month on Epic's website. She earned her undergraduate degree in math from Dickinson College in 1965. After learning how to program during a summer job, Faulkner then enrolled in the University of Wisconsin–Madison's nascent computer science program and was in graduate school there until 1970. At UW–Madison, Faulkner took a course about computing in medicine that was taught by a pioneering physician, Dr. Warner Slack, one of the first people to recognize the promise of the technology within health care. Faulkner began working with Slack and his team, and she was tasked with developing a system that could keep track of patient information over time. She eventually built what would become the kernel for Epic, though it took years of urging from potential users before she would actually launch the company in 1979. In the interim, she taught college-level computer science. When Faulkner finally opened Epic for business, she did so with a small amount of cash from some colleagues at an initial valuation of $70,000. Now the company is worth many billions of dollars, though estimates of its valuation differ. Some of the original shareholders eventually sold their stock back to the company. "They got very good returns," Faulkner wrote in a testimonial.
An accidental entrepreneur
Epic's Deep Space Auditorium. Epic Systems
Faulkner has publicly described herself as "the accidental CEO." She told CNBC she read books and took daylong or multiday courses to learn more about management, business and leadership. But she didn't always follow their advice. "I never got an MBA, which I think is a really good thing," Faulkner said. "They would have taught me, 'Here's how you do venture capital.' We didn't do it. 'Here's how you go public.' We didn't do it. 'Here's how you do budgets.' We don't have budgets. We say, if you need it, buy it. If you don't need it, don't buy it." At the company's Users Group Meeting last year, Faulkner took the stage dressed as a swan, with a plume of feathers in her hair. Every UGM meeting has a theme — this one was "storytime." In costume, Faulkner told the thousands of health-care executives in attendance about her aversion to the public market. "Why be owned by people whose interest is primarily return of equity?" she said. She's equally opposed to selling the business, which she makes clear in the company's second commandment. That hasn't stopped other executives from trying to change her mind. In 2017, at the Digital Healthcare Innovation Summit in Boston, former General Electric CEO Jeff Immelt revealed that he'd spoken with Faulkner about acquiring Epic. Faulkner shut him down immediately. "It was a five-minute meeting — perhaps the shortest in history," Immelt said, according to a report from Healthcare IT News. The report said he'd also considered buying Cerner. Faulkner confirmed the encounter with CNBC. "Others have asked to come and persuade us, and I've heard our staff say to them, 'Just leave your car running,'" she said. Faulkner has said in testimonials that she's avoided buyers in order to remain independent and preserve Epic's unique culture, and she doesn't make acquisitions, calling them a distraction. But no matter how much she loves her company and her job, at some point, somebody else is going to have to run Epic. Faulkner has remained mum about who will be her eventual successor, other than to say that the person will have to be a software developer and a longtime Epic employee. The obvious choice, according to 10 former Epic employees who spoke with CNBC, is Sumit Rana, who was named president of the company last August. The 49-year-old joined Epic right out of college in 1998 and helped build the company's patient portal called MyChart. Rana, who was a toddler when Faulkner founded Epic, has been participating in more high-profile speaking engagements of late, including representing the company during the opening panel at the Centers for Medicare & Medicaid Services' Quality Conference in July. Faulkner declined to say whether Rana is the top contender for the job. "That's the company's business," she said. "Sumit is a wonderful employee, and he would make a good CEO, but we're not publicly announcing anything."
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