H.I.S.-tory by Vince Ciotti

Episode #83: Meditech Part 1

© 2012 by H.I.S. Professionals, LLC, all rights reserved.

7th of Today’s Leading HIS Vendors• This week we continue the HIS-tory of today’s

vendors with Meditech, whose 2011 annual revenue places them in the middle of the pack:1. $3.2B = McKesson, née HBOC = Walt Huff, Bruce Barrington, & David

Owens 2. $2.2B = Cerner, still run by Neal Patterson, co-founded with Cliff Illig3. $1.7B (est) = Siemens, née SMS: Jim Macaleer, Harvey Wilson & Clyde Hyde4. $1.4B = Allscripts, née Eclipsys, also founded by Harvey Wilson of SMS.5. $1.2B = Epic. Gee, I have to wonder, just who was it who founded them? 6. $900M (est) - GE Healthcare, née IDX/PHAMIS: created by Malcolm Gleser7. $545M = Meditech, still run after all these years by Antonino Papallardo8. $353M = NextGen: née Quality Systems Inc. founded by Sheldon Razin9. $174M = CPSI, founded by M. Kenny Muscat & Denny P. Wilkins (who??) 10. $170M = QuadraMed, née Compucare, founded by Sheldon Dorenfest11. $160M = Keane, parent giant by John Keane, but HIS div. built by Ray Paris 12. $110M = HMS (Healthcare Management Systems), Tom Givens & John Doss13. $70M (est) = Healthland, formerly Dairyland, founded by Steve Klick

44 Years Ago!• It’s hard to remember what life was like back in 1969, the year

Meditech was founded. To give you (relatively) young CIOs some idea, here’s a few of the salient events of that year:

<- July 20th, Another Neil on the moon August 8, Manson visits Sharon Tate ->

<- August 15, Woodstock mud festival September 5, My Lai massacre ->

<- November 3, “Silent Majority” speech Nude scene from “Oh Calcutta” ->

<- October, I join Shared Medical Systems Neil Pappalardo forms Meditech ->

So What’s The Big Deal?• You ask: “So what if Meditech is 44 years old?” Well, only a few

other HIS vendors go back that far, but none have survived being acquired, and with the same (very!) senior management team.

• To get this point visually, check out the chart below that shows the timeline for all 13 of today’s leading HIS vendors, showing the year they were founded and major changes in ownership/name.

• Only 1 vendor has lasted so long under the same name: Meditech

More Perspective on Meditech• I spent so much time building this silly chart that I have to make a

few more observations from it putting Meditech into perspective:– Only 4 other of today’s 13 leading HIS vendors have never

been merged or acquired: Cerner, Epic, CPSI and HMS– Two other vendors were formed in 1969: SMS & Compucare– Only one other predates these 1969 graduates: Lockheed’s

MIS, although it changed hands six times before Allscripts…

Amazing Financial Performance• Had Neil chosen to go public, it’s hard to imagine how many

gazillion he & Meditech’s employee stockholders would be worth today. I could only find published records for Meditech starting in 1983, but look at the growth to today’s over ½ Billion in revenue:

Huge Client Base• Meditech claims over 2,300 clients, although this figure needs to

be broken down into many sub-categories. Based on following them over the years, here’s my best guess as to the breakdown:– ≈400 International: UK, Ireland, South Africa, Australia…

• In Canada alone, they claim 40% of the hospital market!– ≈300 Partial: only a few Meditech applications, e.g.: LIS

• They are a major Lab player, e.g., UCLA kept their Meditech LIS system rather than converting to Epic’s “Beaker”

– ≈200 HCA – who run a highly customized set of clinicals only• HCA’s RCM and ERP financial are inhouse self-developed

– ≈1,300 HIS – US “total HIS” clients, on 3 different products:• ≈650 (down from ≈700) still running the old Magic OS• ≈450 (down from ≈500) running “Client Server”• ≈300 on Focus, er, Release 6.0, er, Advanced Technology…

Which Generation?• So whenever you’re talking about Meditech, it’s

important to specify which of their HIS systems you’re talking about, as with so many vendors:– McKesson – Is it the new Paragon, recently

sunset Horizon, or the aging Star or Series? – Siemens – Is it red hot Soarian (with the most

R&D), or the aging Invision or Medseries4?• And it’s not just which generation of HIS you’re talking about, it’s

which of vendor’s many products, some good and some not:– Cerner – Is it their rocket-ship Millennium EMR, one of the few

competitors to Epic in the IDN market, or inaptly-named ProFit?– Allscripts or NextGen – is it their industry leading Practice

Management and Ambulatory EMRs, or far less dominant HIS?– Healthland’s Classic or Centriq? Keane’s PatCom or Optimum??

• The devil’s in these details, which too many HIS pundits gloss over…

Next Episodes• So we will next delve into the details of each of

Meditech’s 3 systems in turn, thanks to help from:– Bill O’Toole - If you’re a regular reader of HIS-

talk, you’ve seen a series of excellent articles on legal matters by Bill who spent decades working inside Meditech since 1981 before forming his O’Toole Law Group (781/934-7400) in nearby Duxbury, Mass. (wfo@otoolelawgroup.com).

• Also, Bill’s dad, William F. O’Toole, who was the Pathologist at Cape Cod Hospital that became Meditech’s first hospital client in 1971!

• I’m also eager to hear from any other Meditech devotees out there, so if you have any good (or bad…) Boston stories to tell, please call (505/466-958) or write (vciotti@hispros.com).