“H.I.S.-tory” by Vince Ciotti

#18: A “Maxi” Mini Pioneer:

© 2011 by H.I.S. Professionals, LLC

DYNAMIC CONTROL

But first…• Some feedback from last week’s HIS-tory installment, which featured

FM pioneer COMPUCARE. John Indrigo, an HIS veteran who worked for many vendors over his 30+ year career, sent in this email:

“Hey Vince, Not sure if you plan on covering this in a later edition: Roy Kern deserves a mention for his creation of Innovations in Technology, a facilities management firm that he eventually sold to Keane. He too FM’ed System 38 mini projects, and his VP of Sales was Ray Paris, of later Keane fame.”

-- John P. Indrigo President, JPI Enterprises LLC, 813-503-0400

• We’ll definitely cover Keane in an upcoming Mini installment, soon as I can get in touch with Ray Paris, retired in NY & FL… They were not only a major mini player then, but survive to this day!

• If you have more to add (or subtract!) from these HIS-tory episodes, please email me at:

vciotti@hispros.com

A “Maxi” Mini Vendor• We’re now into the 3rd epoch of HIS systems: turnkey

minicomputer systems, that arose in the 60s & 70s to challenge dominant shared systems like SMS & McAuto

• Our story this week focuses on a monster system that grew out of an inhouse self-development effort at:

– Variety Children’s Hospital, in Miami, today known as Miami Children’s Hospital.

• They hired David Pomerance as a consultant to help them program an HIS on their new IBM minicomputer.

- David was a CFO in the Miami area, whose next door neighbor, an IBM sales rep, talked him into taking courses in RPG programming as “the next big thing.” Seems IBM had just announced “The Spirit of 7 and 6” in the early 70s to celebrate their new System 7 minicomputer…

Techie Minutia• Dave has programmed before on an NCR 400 using

magnetic tapes to replace cardboard ledger cards.• He bought some books, went to IBM classes, and learned

how to write RPG (Report Program Generator) code.• IBM’s System 7 was a sensor-based mechanical device, so

Dave started with a System 3, Model 6 mini instead.• He programmed it in RPG and Assembler using punched

cards as input to the Common Control Program (CCP)• He next moved up to a System 15, adding ADT and Order

Entry to the hospital’s financial system foundation.Variety Children’s on left was about 200 beds, established in 1940 by the Variety Club charities. On right is today’s Miami Children’s Hospital.

IBM’s Sales Machine• IBM asked Dave to go on a road show and show other

hospitals what he was doing on their hot new mini.– A number of hospitals were asking about Variety’s software…

• Dave presented at IBM’s ECHO (Electronic Computing, Health Oriented) conference, the 70’s version of HIMSS.– They even flew him to international conferences!

• Several organizations asked for his RPG help too, and in the mid-70s, he decided to form his own company.

• Needless to say, the firm started out on a shoestring budget. Dave remembers fondly how he wrote code for lawyers, engineers, etc, anyone who would pay for his code…

- (shades of Meditech’s early days?)

• His wife was one of 2 early keypunchers…

What’s In a Name?• There were weird names for HIS vendors back then;

how many of these creative monikers do you recognize?• Another Direction• Creative Socio-Medics• Computer Synergy• Gerber-Alley• Jones Hosplex• Hytech• Infostat• Lab Force

• LeBlanc-Schexnayder• Pentamation• Poorman-Douglas• Phamis• RNact• Smart Software• Systemed• Vertex

• Dave and his VP of Sales, Mitch Laskey, came up with an oxymoron that would turn heads (and ears!) for years:• Dynamic Control Corporation – how else to sum up

how turnkey minis let hospitals control their options, unlike shared systems, where the vendor ruled…

Sales Success• DCC sold like wildfire, riding the coat-tails of IBM’s

continued release of new minis, each with better price/performance than the last: System 34, 36, 38, AS/400…

• It wasn’t easy, however, as a number of other vendors’ mini systems (DEC, DG…) were selling well back then too. IBM just dominated the hardware market, as this graph from the early 1980s illustrates ($s in 000,000s):

Too Successful?• DCC not only stole hospital clients from shared systems,

they recruited new sales management from McAuto:– Steve Dougherty – who I met during my stint at Mac where he

was Regional Manager of their Central division in St. Louis.– Matt Lawton – amazingly bright sales support maven from

McAuto, who could argue the case for a System 38 with god!

• However, DCC”s rapid growth brought them the attention and temptation to sell out to monster firms looking to buy their way into the HIS mini revolution, the biggest of which were the supply giants like Travenol, Baxter and American Hospital Supply, who not only bought DCC, but also bought each other!

Baxter/Travenol/AHS• It would take another whole HIS-tory episode (or book?)to

relay the corporate intrigues that brought these three supply giants together, but our focus is on how they re-named DCC as “Delta” with two other HIS acquisitions:– JS Data – focusing on small hospitals (<100 beds),

running on IBM’s System 36, called “Alpha.”– “Stony Brook Systems” = IBM “PCS/ADS” mainframe

software they acquired in NY and named “Omega.”

• So Baxter/Travenol now covered the waterfront, with products for every size hospital, and DCC was their stellar “mid-range” option, selling like hot-cakes into 100 to 400-bed community hospitals.

A Hospital’s Perspective…• Baxter bid Delta (DCC) to a 250-bed 1988 consulting

clients of ours, so here are is fascinating table from my personal archives (translated from Microsoft Works 1.0!)

• First, Baxter’s “Delta” costs, compared to 2 alternatives:- As you can see,

the turnkey mini approach was less expensive over 10 years than shared or mainframe alternatives…

- Whose vendor names are hidden to protect the innocent!

Hospital’s Perspective, cont’d…• It wasn’t all a question of costs, of course, when selecting a

system, so we ran user departments through a series of: – Phone reference checks - our own unexpurgated “KLAS”– Documentation reviews - paper user manuals back then– Site Visits - un-chaperoned interviews with fellow dept. heads

- As you can see, Baxter’s Delta mini out-performed the shared and mainframe vendors handily,

- Based on evaluations by the actual end users in Admitting, Nursing, Billing, Lab, GL, etc.

- A much more important “bottom line!”

Merger-Mania Continued!• Baxter sold hundreds of hospitals on Delta, making it

one of the all-time best-selling turnkey mini systems. • Since all 3 of the supply giant’s products ran on IBM,

(Alpha on Sys 36, Delta on Sys 38, and Omega on mainframes)

• their next move was predictable: “partner” with IBM!• What do you call the combination of IBM and Baxter?• Why: IBAX of course, the “next big thing” in 1989 HIS,

who immediately re-named their 3 acquired products:• JS Data/Alpha became Series 3000 • DCC/Delta became Series 4000- Mainframe/Omega = Series 5000- Got it? Good because it’s all gonna

change with the next merger…

One More Time…• IBAX had over 800 employees, and was headquartered in

Hauppage, Long Island, close to Stony Brook Hospital, the site of mainframe software “Omega’s” development.

• CEO of the new firm was Frank Russo– Former CIO at Stony Brook University Hospital– Who built Omega using IBM’s “PCS/ADS”– (Patient Care Sys/Application Development Sys)– IBM’s tools for “roll your own” mainframe sites,– Which evolved from the “Duke/Parkland” System.

• Needless to say, IBAX too was open to offers…– And in 1994 HBOC bought them and their ≈500 clients!

• HBOC by then had also acquired scores of other HIS systems,• The complete story of which will fill a future episode…

Where is the DCC system today?• First, the next acquisition (getting bored?):

– In 1998, HBOC sold itself to drug giant McKesson,– Which must have been high using its own meds– To believe HBOC’s hyped-up revenue figures,– Which eventually got 3 top HBOC execs in prison…

• What did McKesson do with the Series suite?– Why, of course: change their names!

• Since McKesson wasn’t very good at math,– They combined 3000 (Alpha/JS Data)– With the Series 4000 DCC/Delta – To get “Series 2000,” later shortened to just “Series”

• Series-ously?- It’s still running in 200+ hospitals on IBM’s “iSeries” (AS/400 successor)

Muchas Gracias!• For input to this week’s episode:

– David Pomerance – who regaled me with the inside story of DCC, taking time off from his job (he’s still working!). Actually, sounds more like fun: an airplane business in sunny Florida that he’s built up to over $80M!

• More feedback on last week’s episode:– Sheldon Dorenfest – who emailed from

China: “Thank you for your kind comments in your last episode. You said China is like the US in the 50s & 60s. Actually, China is more like the US in the 70s & 80s.”

– Ever the man to get the facts right!