EPIC-UGM-04-09202016160020 (copy)

Health care industry representatives gather at the Deep Space auditorium at the massive Users Group Meeting at Epic Systems in 2016. 

PHOTO BY SAIYNA BASHIR

It’s possible that the entry of a company like Amazon into the health insurance field could shape the future of the Verona-based medical software developer Epic Systems, according to some health care technology analysts and consultants.

Amazon, Berkshire Hathaway and JPMorgan jointly announced on Tuesday they would form a new health care enterprise together, sending health insurance and pharmaceutical stocks into an abrupt decline. A press release said that the company would focus on “technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent health care at a reasonable cost.”

No other details on the specifics of the plan were provided.

“My guess is they are going to become a self-insured plan for their employees,” Caroline Pearson, an executive at the health care consulting group Avalere, told the media company Vox on Wednesday. “But instead of contract out all the benefit management services, they will use it as an incubator to test new models for payment and care delivery.”

Epic Systems is not a health insurance company — it primarily makes complex medical records systems for hospitals and clinics — so it stands to reason that it didn’t feel immediate shockwaves from the announcement.

Still, some analysts say that Epic might increasingly look to health insurers as customers in the future, making Amazon’s activity in that market pertinent to its future.

“Software to power the applications for health care providers come predominantly from a few large players like Epic and Cerner,” Kenneth Kleinberg, the vice president of research at the consulting group Chilmark Research, wrote in an email. “It's a great question to ask to what degree they can take their provider and software application expertise and apply it to the needs of payers.”

Bill Neill, the chief operating officer at the health care tech-focused Carex Consulting Group, said he believes that Epic may be considering contracting with major insurers as a way to sustain its growth.

“Anthem and Cigna, that’s where Epic sees a lot over the horizon,” he said.

Epic already makes tools for health insurance. Its “Tapestry” brand of software handles processes like managing claims and billing. It contracts with companies like Kaiser Permanente in Oakland, California, which operates both as a health care provider and as an insurer.

Still, most major insurers do no use software made by electronic health records vendors — also known as EHR vendors.

A big question mark for Neill is whether Amazon could become a potential Epic competitor.

“The question I’d have is, is Amazon planning on developing software to facilitate this (new company)?” he said. “Do they think they can build a better claims management and remittance system? That might put them in direct competition with Epic.”

Kleinberg said that there’s all sorts of potential for either “partnerships” or “matchups” between all major players in the realm of health care. Each field comes with its strengths, he said: Companies like Epic know how to handle health data, tech companies like Amazon specialize in artificial intelligence, insurers have an advantage in data analysis.

He said given the massive “geography and scale” of health care in the U.S., he said it’s likely the health care technology landscape will continue to feature a diverse roster of companies, no matter what Amazon ends up doing.

“Even if Amazon is successful with their new model (whatever that may be), it would take years for any impact to the EHR market,” he wrote. “It’s likely that other collections of partnerships will form to counter it — and they will likely have a mix of EHR vendors.”

He added that he predicts that vendors like Epic will likely remain “a key layer” in health care technology.

Epic declined to comment on the announcement of the Amazon-JPMorgan-Berkshire Hathaway project.

The news comes days after another tech giant, Apple, quietly announced it was entering the health records arena with an app that could provide patients with their personal records.

Erik Lorenzsonn is the Capital Times' tech and culture reporter. He joined the team in 2016, after having served as an online editor for Wisconsin Public Radio and having written for publications like The Progressive Magazine and The Poughkeepsie Journal.