After Epic, then what?
For a growing number of alumni of the Verona-based electronic medical records development company, the answer is: Stay in Madison and start your own company.
Not only is Epic Systems Corp. rapidly growing — at nearly 6,400 employees, up about 1,000 from a year ago — but it is indirectly contributing to the Madison area’s entrepreneurial nexus.
Five of the companies launched by former Epic employees in the past three years have created a total of nearly 400 jobs.
“That’s very impressive when you think about it,” said Ald. Scott Resnick, 8th District, a member of the city Economic Development Committee. “It’s a number that’s only growing.”
Some ex-Epic staffers have found there’s a market in serving as a consultant to Epic’s client hospitals. Others have gone off in different directions, starting companies that offer services such as organizing athletic events for children, creating a social calendar for friends to plan activities together, and setting up a pet licensing system.
The Epic alums are helping to spread a startup fever in the area. They also are fueling a cluster of health information technology businesses in Madison, one of which recently won a nationwide apps competition and participated in a health IT accelerator program.
Is all of this enough to become the city’s new economic engine? Resnick thinks so.
“Dell is to Austin what Epic could be to Madison,” said Resnick, vice president of Hardin Design & Development and co-founder of Capital Entrepreneurs, a support group for leaders of young companies. “Dell is located in Round Rock, Texas, 20 minutes outside of Austin, and was one of the leaders in Austin’s startup renaissance. Hopefully, Epic can do the same here.”
At least five Madison companies in the health IT field, established in the past three years, were founded by former Epic employees:
• Nordic Consulting
• BlueTree Network
• Moxe Health
Consulting for Epic
Nordic leads the local companies set up to work with Epic’s clients. Founded in 2010 by former Epic employee Grant Hambrick and serial entrepreneur Mark Bakken, Nordic serves only Epic clients, and about half of its employees have worked at Epic.
“Our consultants go to hospitals and clinics around the U.S. and help them implement Epic,” said Bakken, whose previous companies include Bedrock Managed Services & Consulting, and Goliath Networks. “We have a very good relationship with Epic. We’re helping Epic get (its systems) deployed properly.”
With a large funding round last September by three East Coast investment firms — SV Life Sciences, Boston; HLM Venture Partners, Boston; and HEP (Health Enterprise Partners), New York — Nordic is growing quickly. (Nordic has not publicly disclosed the amount invested.)
The company now has 250 employees who serve as Epic consultants, about 30 percent of whom live in Madison, and another 30 administrative and other staff at its offices at 551 W. Main St.
Nordic president Drew Madden had worked for Epic competitor Cerner for four years and bought out Hambrick in December 2010; Hambrick is no longer involved in the company’s day-to-day operations.
A 2012 survey by the Orem, Utah, health care technology research firm KLAS ranked Nordic No. 1 in the category of “staffing and implementation support” among Epic consulting firms nationwide.
“Demand is at an all-time high for Epic consultants. KLAS verified an unbelievable 45 firms doing Epic-related work,” the report said, adding there are likely many more.
Asked to speculate on Nordic’s growth over the next five years, Madden, a Story City, Iowa, native, said 500 to 1,000 employees is “very achievable. There’s still huge, huge demand out there.”
Middleton-based Vonlay is also an Epic consultant firm. Founded in January 2011 by Stanley native Mike Kolpien and Epic alum Aaron Carlock, of Polo, Ill., Vonlay — a Swedish term for transformation — will have 90 employees by early April and could be up to 130 by yearend, Kolpien said. He said the company’s growth has been “way beyond our expectations.”
All of Vonlay’s consultants have worked at Epic. “There’s just a ton of Epic talent based here in the Madison area,” Kolpien said. “We had a vision of how can we put these people to work based in the health care industry and that’s really why we started.”
Carlock spent nearly four years at Epic, setting up electronic health records systems at client sites and began Vonlay two years after leaving Epic. He said as Epic’s hiring has swelled, more employees also have left the Verona company and some have been bitten by the entrepreneurial bug.
“I think we’ve definitely seen more companies starting in the last couple of years,” Carlock said.
BlueTree Network, 849 E. Washington Ave., is barely one year old and has 12 employees. Another Epic consultant firm, BlueTree differentiates itself with flexible staffing and general business consulting.
Co-founder and chief executive Reggie Luedtke of Clintonville worked at Epic for three and a half years and said his experience there was invaluable.
“If I were betting if a startup were going to be successful, I would bet on an Epic person versus an MBA (graduate),” Luedtke said. “You have freedom at Epic. It’s kind of a sink-or-swim environment but also an environment where people help each other and you learn a ton.”
Joe Reinardy co-founded CenterX in 2009 because of the need he recognized as a result of his work at Epic for three years. Reinardy connected physicians on Epic’s systems to middleman companies that send prescriptions electronically to pharmacies.
“One by one, they merged or folded,” Reinardy said, leaving one main player, Surescripts. “It’s a monopoly and needs to be fixed.”
Reinardy said CenterX, at 108 S. Webster St., uses a subscription fee rather than charging a fee per prescription, substantially cutting the cost of medication charged to health insurance companies. CenterX has 11 employees, about half with Epic backgrounds.
Reinardy said he was not the typical Epic employee, hired right out of college. Born in Antigo and raised in Appleton, Reinardy worked at Kimberly-Clark Corp. for five years designing the machines that produce diapers and figuring out ways to lower the cost of manufacturing toilet paper.
Epic was “a great place to get inspiration,” Reinardy said.
Moxe (pronounced MOX-ee) Health got its reason for being at the Milwaukee BuildHealth Hackathon in April 2012. Co-founders and Epic alums Dan Wilson and Mark Olschesky developed Triage.me, a platform to connect people on Medicaid or without health insurance to the closest appropriate clinic. It gives directions via public transit and tells the clinic the patient is coming.
The idea stemmed from a challenge submitted by an Aurora Health employee to cut “over-utilization” of emergency rooms, Wilson said. “It immediately jumped out to both Mark and me as being heavily influenced by human behavior, flawed operational practices and broken financial incentives,” Wilson said.
Since then, Moxe Health was accepted into the Rock Health accelerator program in San Francisco, and earlier this month, was one of 15 award winners in Allscript’s Open App Challenge.
Wilson, who’s from the Detroit area, said when he and Olschesky, a Pittsburgh-area native, return to Madison in May, they plan to hire two employees.
“Right now, health care is the Wild West during the gold rush. If you’re looking for adventure, where better to be?” Wilson said. “On top of that, I want to build something that matters — adventure plus social good. That’s why I’m doing this. If you don’t like something, do your part to change it.”