2. 2nd of today’s “Baker’s Dozen!”
• Thanks to co-founder John Doss & Tom Givens,
this week we conclude the 2nd
story of today’s
HIS vendors: Healthcare Management Systems
- $3.2B = McKesson, née HBOC = Walt Huff, Bruce Barrington, & David Owens
- $2.2B = Cerner, still run by Neal Patterson, co-founded with Cliff Illig
- $1.7B (est) = Siemens, née SMS: Jim Macaleer, Harvey Wilson & Clyde Hyde
- $1.4B = Allscripts, née 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, née 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, née 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. Amazing Grace Growth!
• In 1984, Tom & John started HMS with 2 other employees, and a
handful of clients, mostly small hospital chains based in Nashville.
• HMS grew slowly in the 80s, then took off in the 90s as their chain
clients grew & IBM’s AS/400 minicomputer sales burgeoned.
• By 1996, HMS had 120 clients in 27 states, with about $5M in
annual revenue. HMS grew amazingly since then, as shown below
plotting their annual revenue growth by year in millions of dollars:
2010 2005 2000 1995
4. Changes in Ownership
• In 2000, John Doss & Tom Givens restructured
HMS into an Employee Stock Ownership Program
or “ESOP,” giving the 100-odd employees then a
piece of the action (no SMS pun intended).
• Tom & John eventually stepped down from day-
to-day management of the firm in 2005, turning
the management reins over to Tom Stephenson
as CEO, one of their first 4 employees from 1984.
• In 2007, an even larger change occurred when HMS was acquired
by Primus Capital, a VC firm like Francisco Partners that acquired
HIS vendors Healthland (Dairyland) & QuadraMed (Compucare).
Who in the world is Primus? To quote their press release:
– “Primus is a private equity firm that invests in high-growth
companies within the healthcare, business services,
communications and for-profit education industry sectors.”
5. Product Growth
• HMS’s HIS product was originally known as “Monitor” back in the
day, and it grew as rapidly as the firm’s client base and revenue:
– From primarily financial systems back in the 80s (which is how
so many HIS vendors started), including patient accounting
(census, billing & AR) and general accounting (AP, GL, etc.)
– Augmented by their excellent corporate reporting for their
large number of hospital chain clients like AMC and CHS.
– In 2001, HMS introduced an integrated
Electronic Health Record and Clinical View,
giving clinicians a comprehensive look at
electronic patient information, including lab
results, vital signs, transcribed radiology
reports, the patient’s pharmacy profile and
more. Per the ARRA stimulus program,
HMS’s E.H.R was certified in 2007 by:
6. Expansion/Acquisitions
• In 2009 HMS announced the addition of an Ambulatory EHR and
physician practice management suite, including modules for:
– Registration, Scheduling and 1500 Billing.
• Probably HMS’ most daring product biggest jump however was
the acquisition of the premier ED system vendor: MedHost.
– I first saw MedHost at Olean Hospital in upstate NY a few
years ago, and was blown away by how well the nurses and
physicians loved it, bragging of how much time it saved them.
– This was no salesman’s demo: it was from the actual usersI
• Like so many vendors, HMS is now working
on the complex interfaces between
MedHost, their HIS suite, and ambulatory
E.H.R. If they pull it off, they’ll may become
the “epic” solution for small hospitals!?
7. Recent System Selection
• To show how well HMS matured, the scores below shows how they
performed at a system selection at a 50-bed hospital in the Midwest
that we helped a few years ago, based on user ratings of key steps:
• Site visits – to local hospitals running the
same apps, without sales chaperones!
• Implementation – experience of the
actual project manager & # of days on-
site
• MD Fair – concurrent demos in adjacent
rooms so MDs compare CPOE & EMRs
• Contract – based on our 70-point
contract questionnaire on terms &
conditions
• Documentation – reviewing the actual
CDs and on-line documentation by users
• Phone references – user-to-user phone
calls to over a dozen live client sites
8. The $64,000 Question?
• I’m sure many CIOs out there are wondering how much such a
system costs? Since vendors’ prices are confidential and these are
today’s vendors, all we can share are some ballpark figures:
• In the small hospital world (under 100 beds) the three leading
vendors today in terms of market share and # of clients are:
– CPSI with ≈650, HMS with ≈600, Healthland with ≈550
– (“up & coming” vendors include NextGen & Prognosis…)
• To show why these 3 do so well in this demanding market, where
hospitals are extremely challenged financially, and usually have IT
staffs in the single digits (CAH often have only 1 or 2 IT FTEs!):
– Capital costs for license fees, implementation and hardware
(most run inhouse, few do remote) run from $1M to 1.5M
– Operating costs for hardware, software and interface
maintenance usually runs in the low 6-figures…
– TCO over 5 years of about $2M (eat your heart out big CIOs!)
9. The Name Game
• Funny how these 3 small HIS vendors change their product
names, today calling their suite of HIS apps “solutions,” as if their
system solve all the problems hospitals are facing… To whit:
• HMS – the old name of
“Monitor” that describes how
well HMS’ corporate reporting
helped chains watch finances.
Now, HMS offers “solutions.”
• Healthland – gave up on
“Vision,” a propos considering
how vendors are always selling
the 4th
quarter (they just won’t
commit to which year…), and
are now calling it “Centriq.”
• CPSI – rather creatively calls its
HIS suite the “CPSI System.”
10. A Final Thanks… and next week!
• Besides Tom Givens and John Doss for this story, I’d like to thank
another old HMS-er who shared anecdotes from the firm’s past :
– Carl Schneider – who was HMS’ VP of Sales & Marketing
during the halcyon 90s, left the firm for a few years, then
came back until just recently. His many old friend can reach
him at his new small hospital HIS vendor: Custom Software
Systems cschneider@csshealthtech.com 615/714-9717
• Next up for today’s vendors will be Keane (NTT),
whose acquisitions cover many other HIS-tories:
• SDS – Source Data Systems, Cedar Rapids, IA
• Infostat – my old friend John Indrigo from TX
• CHC – Community Health Computing
• PatCom – from Professional Hospital
Services
