H.I.S.-tory by Vince Ciotti

Episode #20: A “Saint”

© 2011 by H.I.S. Professionals, LLC

But first…• A huge thanks to the whole SAI family of Saints, who have a thriving

alumni Facebook web site, that Mr. HIStalk (who else?) found:– http://www.facebook.com/group.php?gid=136508283116

• And one “Saint” in particular whose HIS career alone would be a miniature history of our industry:

• Larry Ferguson, president of SAI from 1985 on, who appears on this dusty cover of “Healthcare Computing and Communications, and kindly took time off from his busy golf schedule to tell the tale

Another Man’s Story• The story of SAI actually belongs to another man, who

sadly passed away just a few years ago: Jack Weil(Another reason why these stories must be told now:

many of the original “HIS Heroes” are passing on – hell, I start getting Social Security checks this month!)

• Like so many HIS industry pioneers, Jack started his HIT career in the 60s, along with a high school buddy, Mason Chrisman (SP?), high school classmate from Charlotte.

- Just like almost everyone else in the business, Jack and Mason cut their IT teeth working for IBM in the early 60s.

- Jack left Big Blue to be DP Manager at Norcom National Bank in 1964-1965.

System Associates, Inc.• In 1966, Jack & Mason left the bank and formed their

own computer company, SAI, originally do do contract programming for banks or any other industry.– (shades of early Meditech and McAuto’s GSD…)

• They first wrote programs for IBM mainframe and mini systems, but soon branched out when they encountered their first hospital client: Charlotte Memorial Hospital.

• Charlotte Memorial was a Burroughs shop, running their early HIS software:

“BHIS” (Burroughs Hospital Information System)

Aside on Early “Pilots…”• (If you’ve been following this HIS-tory series, you may

have noticed the pattern that so many pioneering systems were first developed at “pilot” hospitals:– McAuto’s “HFC” at the Order of St. Francis in Peoria, IL– IBM’s “HIS” at Monmouth Medical Center in NJ– Lockheed’s “MIS” at El Camino Hospital in CA– Meditech’s “HCIS” at Cape Cod Hospital in MA– Dynamic Control at Variety Children’s in FL

• So it always pays to be the first wildebeest at the watering hole, right?

• Not so fast, we’ll cover a number of sad stories where being first customer meant you found out what might be lurking in the water…)

Another Government Grant• Another HIS-tory pattern is government grants, to whit:

– Walt Huff and his grant at OSF to build HFC, post-Medicare

• Jack Weil too found another “pilot” that had received a government grant to build a Pharmacy system: Duke

• Jack noticed the pattern that hospitals seemed to have the money, so SAI soon concentrated an healthcare, gradually expanding the Charlotte Memorial and Duke applications to encompass the full suite of HIS apps (translated into 2011-speak in red for you newbies): – Financial apps like ADT (Access), Billing & AR (Revenue Cycle),

Inventory (Materials), Personnel (HR), General Ledger (ERP)…– Clinical apps were rudimentary by today’s higher standards

(BMV, eMAR, Med Rec, CPOE…), but in those days, just having Order Entry and Results Reporting applications was huge!

Sales Successes…• SAI named their HIS “SAINT,” punning on the first 3

letters, but it was just that to scores of small hospitals who loved:– Turnkey Approach – just like Compucare, DCC, JS Data,

etc., all you had to do was buy it and turn the key!- Service Ethic – small start-up companies like SAI had to keep their clients happy to sell more.

- Affordability – the bundle of apps, minicomputer hardware and installation was cheap!

- “Total HIS” – note the quotes – it was no MIS or PCS, but it covered most bases: financial & clinical.

A Rose By Any Other Name…• Technically, SAI had one oddity: its hardware platform.• At a time when every other turnkey mini road the

coattails of a hardware manufacturer, such as:– Compucare on DG, Meditech on DEC, everyone else on IBM

• SAI broke all the rules and picked an odd little box made by Point Four corporation, with great price/performance, but with very little name recognition.

• SAI actually covered up the Point Four name with a tag of their own name, telling clients “what does the manufacturer matter, it’s a mini!”

• Pictured on the left is the last surviving Point Four gear I ever saw at a 100-bed hospital in upstate NY circa 2000

What Might Have Been…• I actually jump into the SAI story for

a minute, er, week, as you’ll see…• In 1980, I had joined McAuto in St.

Louis as a turncoat from SMS,• And was given the assignment of

helping hire 20 new sales reps to boost McAuto’s sales efforts.

• I was helping Charlie Kean in the South, and came upon the resume of a hot young rep for SAI named Ferguson.

• I filled Larry’s ears with all my SMS marketing charm, got him to St. Louis for interviews, and he joined us in 1980!

• Within a week, Jack Weil countered, hired him back, and the rest, as they say, is HIS-tory, as Larry soared at SAI!

Rapid Growth• Larry was an enormous success as a salesman at SAI, so

much so that in 5 years, by 1985, he become CEO.• When Larry joined SAI in 1980, the firm’s stats were ≈

– $5M in annual revenue (told you SAINT was cheap!)– 25 hospital clients (most small, 100 beds or less)– 50 FTEs (7 in sales), including many HIS notables:

• Daryl Bowles, Tony Baretta, Liz Tsumas, plus several I had the privilege to know personally:

• Harold Key – an SMS turncoat like me, who brought all of their sales savvy with him…

• Karl & Beth Friedman - a dynamite husband and wife team that went on to form their own vendor consulting company (healthITmktg)

Acquisition Time!• Under Larry’s leadership and the hard work of those early

employees, SAI grew enormously to $50M annual revenue and about 250 SAINT hospital clients at peak.

• True to form among early HIS vendors, SAI’s explosive growth caught the attention of one of the “biggest fishes” in the US pond: American Express

• AMEX was looking to diversify beyond its core credit card transaction business

• AMEX also bought a Visa/Master Card transaction processing vendor named First Data Corporation in Iowa

• SAI was re-named FDC, and starting acquiring HIS firms.

Minnow Swallows Whale!Minnow Swallows Whale!• In an amazing bit of irony, tiny SAI with FDC/AMEX’s

enormous capital, started shopping for other HIS vendors to buy, so the new IT division would shine internally.

- And who did they target?

McAuto’s HSD!- By 1990, the parent airplane

giant was shopping HSD around, and FDC got a steal for a paltry$77M (annual revenue ≈$100M)• McAuto by then was in a bit of turmoil, with a wide array

of often-competing products on disparate platforms:

HFC, PCS, HDC+, MHS, I.H.S., MRII, RX-Com, LabCom, Rad-Com, etc, etc, etc.

Whale Bites Back!• FDC also bought out Gerber-Alley, another rising young

turnkey mini star, and even made overtures to HBOC!• So what became of this HIS vendor-eating FDC monster?• Well, it may sound like revenge, but the parent Amex

corporation eventually shopped their FDC subsidiary around, and sold it to to Charlie McCall’s HBOC.

• The Charlotte HQ of FDC/SAI was so big by then, HBOC kept it open, and poured a bit of R&D into Saint to make:

• “Saint Plus,” first introduced by SAI in the 80s, and

• Saint Express, newer, more modern HBOC brochures, overheads & proposals.

DenouementDenouement• So what happened to all these companies & products HBOC

bought from FDC? Most were eventually sunset, including:– McAuto’s full range of acronyms (HFC lasted the longest)– Gerber-Alley (an upcoming HIS-tory episode in itself…)

• With the one major exception being Saint Express• Around 1995, HBOC decided to give the old war-horse a

true re-write, and take advantage of the latest R&D:– Client/Server systems! All the range back then…

• So what do you call this brand new system that’s going to be the best HIS system in the small hospital field?

• Just look up “ParagonParagon” in your Funk & Wagnals!• Yes, Paragon started out in life as a C/S Saint re-write.

First at the Water –Hole?• Back to our earlier question: is it good or bad to be a

pilot or early adopter of a brand new HIS system?• HBOC sold ≈50 hospitals on their new C/S Paragon

“vision” in the late 1990s, until the usual problems with any brand new HIS system inevitably cropped up:– Late delivery (we’ll have it by the 4th Quarter of 199X)– Missing apps (oh, you wanted PR too?)– Bugs (realize, it is a brand new system)– Release 3.2.A-II… (that phase is coming)

• Same stories the “pilot” sites of every system have ever heard since ENIAC!(think Soarian, ProFit, Release 6…)

Risen from the Ashes!• By Y2K, many Paragon early adopters either sued to get

money back or just gave up & bought another HIS.– We helped two early Paragon sites ourselves get out of their

contracts, which to HBOC’s credit, wasn’t that hard.

• McKesson execs in Atlanta were just as frustrated, as drug sales to Paragon pilots were rather difficult…

• New CEO Graham King sent VP Jim Pesce to Charlotte in 2001 to shut Paragon down.

• Jim took a look at the pure MS SQL data base and Windows OS, and pleaded to save it…

• Graham relented, Jim became Paragon’s savior, and this Phoenix has risen from the ashes to be the hottest selling HIS in small hospitals today!

The “Pilot” Lesson?• It took a while for McKesson to deliver all of the apps

promised: PR and RX finally came around 2005-6.– And CPOE wasn’t delivered until just a year or two ago…

• But hats off to McKesson (and Jim Pesce) for saving a bunch of pilot hospital CEO, CFO and CIOs’ careers.– (Just as Soarian, ProFit and Release 6 will get finished too)

• So what’s the lesson for hospitals today? Easy, don’t be the first (or 2nd or 3rd), but let 10+ “pilots” go first!

• Once all the apps are really there and the bugs are worked out, then buy.

• And you’ll be as happy as the 100+ Paragon sites today, running the “new” Saint with roots from 1965!

Help Help for Future Episodes!?• The next episodes on turnkey minis I’d like to cover are:

– AR/Mediquest – anyone have details on this early IBM player?– JS Data – another IBM Sys 34 mini player from Rhode Island– MSA – the “little one” from Raleigh, formed by Skip Shippee– Gerber-Alley – started life as an HP mini system written by Irwin

Gerber and Terry Alley, then launched solo by Mike Brown; anyone have a GA story to tell and/or contact info?

• Thanks much already to the following “HIS-tory heroes” who helped with info & leads for this week’s episode:– Bonnie Hughes, now with Cerner, who remembers MSA & GA– Steve Kilgus of SAI, who put me in touch with Larry Ferguson– Mr. HIStalk – an obscure blogger who found SAI on Facebook

• Please send any contributions to: vciott@hispros.com