2. 2nd of todayâs âBakerâs Dozen!â
⢠Thanks to co-founder John Doss, last week we
started off the second HIS-tory of todayâs HIS
vendors: Healthcare Management Systems
- $3.2B = McKesson, nĂŠe HBOC = Walt Huff, Bruce Barrington, & David Owens
- $2.2B = Cerner, still run by Neal Patterson, co-founded with Cliff Illig
- $1.7B (est) = Siemens, nĂŠe SMS: Jim Macaleer, Harvey Wilson & Clyde Hyde
- $1.4B = Allscripts, nĂŠe Eclipsys, also founded by Harvey Wilson of SMS.
- $1.2B = Epic. Gee, I have to wonder, just who was it who founded them?
- $900M (est) - GE Healthcare, nĂŠe IDX/PHAMIS: created by Malcolm Gleser
- $545M = Meditech, still run after all these years by Antonino Papallardo
- $353M = NextGen: new Opus & old Sphere financials by Florian Weiland
- $174M = CPSI (Computer Products & Services Inc), founded by David Dye
- $170M = QuadraMed, nĂŠe Compucare, founded by Sheldon Dorenfest
- $160M = Keane, parent giant by John Keane, but HIS div. built by Ray Paris
- $110M = HMS (Healthcare Management Systems), Tom Givens & John Doss
- $70M (est) = Healthland, formerly Dairyland, founded by Steve Klick
3. Another HIS-tory Hero!
⢠Our story starts with the co-founder
of HMS way back in Orwellâs year:
1984
â Tom Givens â who just took time
out from his busy golf, er, work
schedule (he runs a golf club in his
spare time!) to relate this tale of
how he co-founded HMS along
with John Doss way back in 1984.
â Tom was a CPA and served as
Controller at a manufacturing firm.
â He was interested in computers,
but there were no classes then!
â He got a call one day from a client
American Medical Centers (AMC),
4. How Their Hardware Platform Picked Them!
⢠It seems AMC had bought IBM System 32 minis
for their hospitals, had them installed for about
6 months, but none were being used at all!
⢠AMC hired Tom to straighten things out, get
software installed, and put the minis to work.
⢠One of the first pieces of software Tom had to
customize was a corporate reporting system for
the complex inter-company fund transfers in GL
⢠AMC sold out to another chain and
wanted Tom to move to Indianapolis,
far from his Nashville home. Tom
declined, but took the funds he had
earned to start a DP firm, sharing an
office with his old High School buddy,
John Doss, whom we met in Part 1.
5. Fascinating Chain of Events
⢠In 1984, Tom & John made their first sale, concentrating on the
many hospital chains headquartered in Nashville, starting with
Community Health Systems (CHS), formed by some ex-AMC folks.
⢠Seem weird for an HIS vendor to start out with chains? Check the
background of the three leading shared systems back in the 70s:
â Shared Medical Systems (SMS) got it toehold nationally
through a deal with American Medicorps, Inc, (AAM), who put
SHAS into scores of hospitals in Florida, Texas, California, etc., in
the 70s.- McAuto had an exclusive deal with Hospital
Affiliates International (HAI), with HFC in
their their 100+ sites automating HAIâs
M.O.R.s (Monthly Operating Reports).
- GEâs MediNet automated all of HCAâs 100+
hospitals through a shared set of financial
apps, that HCA still runs to this very day!
6. Both Chains & HMS Grew
⢠Chains not only comprised a large part of HMSâ
early sales in the 80s & 90s, they grew rapidly
through mergers/acquisitions themselves
⢠Two of HMSâ early chain clients bought other
chains with competing HIS systems installed:
â One with HBOâs Star and one on Meditech
⢠At first, Tom & John feared theyâd lose out to
these larger systems, but their system of
corporate reports on cash & statistics won out!
⢠Chains also account for HMSâ dominant
role in the small hospital market: as HCA,
AMI, AAM, HAI, Tenet, etc., all learned,
the most efficient hospitals are in the
âsweet spotâ of 100 to 300 beds, the
usual bed size for most chains today!
7. Just Who Helped Who??
⢠Since AMC and CHS steered HMS to IBM minis,
HMS soon became an official business partner of
IBM, starting on the smaller System 32 and 34s
⢠IBM actually tried to encourage Tom to shift
vertical markets to construction, but HMSâ
healthcare sales soon impressed Armonk too!
⢠HMS grew rapidly, both through sales to hospital chains like CHS, as
well as in partnership with IBM to standalone community hospitals
who were flocking to System 3X minis, just like so many other IBM
âVARsâ (Value Added Resellers) who starred in previous HIS-tories:
- Dynamic Control, JS Data, HCS (NJ), First Coast, IHC, LeBlanc, etc.
⢠Why such a preponderance of HIS systems written in RPG and running
on IBM minis back in the 1980s? Just take a look at the table on the
next page to see just how dominant IBM was over their competitors
during the minicomputer revolution back in those halcyon days:
8. IBMâs Hardware Dominance
Hereâs a
table from
Sheldon
Dorenfestâs
âGuideâ in
1988,
showing
how IBM
garnered
an amazing
40% of the
hardware
market in
1986 &
1987
9. Of Course We ModernsâŚ
⢠Now, of course we modern IT sophisticates would never allow
such a near-monopoly in our vastly more sophisticated industry.
⢠Especially in this era of user-friendly E.H.R.s and P.H.R.s (Personal
Health Records), where consumer-orientation is paramount...
⢠Now that Appleâs iPads totally dominate PDAs (1.3rd
of all MDs
already!), and millions of consumers are finally learning just how
easy it is to open up an app in the Mac OS, navigate the web, etc.
⢠Thereâs just no chance that any hospital today would dare force
their MDs and RNs to put up with Microsoftâs far more clunky
Windows OS with itâs âtoo many clicksâ approach to everything.
⢠Why, take a look at the table on the next page to see just how
many of Americaâs â5,000 hospitals have switched their devices
from Microsoftâs Windows/Office, to Appleâs Mac PCs & iPads.
â At an average bed size of 168 beds (per AHA), and â500 PCs per facility
(Average of 2-3 devices per bed), that makes a total of over 2.5M PCs:
11. Stay Tuned For More Next WeekâŚ
⢠Next week, weâll finish the HMS saga, this time bringing the story
right up to 2012, featuring an amazing growth to over 600
hospital clients and an annual revenue figure of over $100M.
⢠A far cry from the 4 FTEs Tom & John started out with in 1984!
⢠Weâll also follow the evolution of their product line from
primarily financial systems into the clinical apps for RNs & MDs,
including the recent acquisition of one of the leading ED specialty
vendorsâŚâ˘ Of course, there were some
changes in ownership structure, and
another VC (venture capital) firm
(besides Francisco Partners) buying
into our burgeoning HIS/E.H.R.
industryâŚ
⢠So please, send in any pictures or
stories you might have of HMS