This document summarizes the early history of Shared Medical Systems (SMS) from 1969-1981: - SMS was founded in 1969 and grew from a small startup to become one of the largest healthcare IT vendors, initially running IBM's SHAS system and later developing their own products like UNIFILE. - In the early days, SMS had a small team that worked long hours out of rented office space, and new employees like the author learned on the job while implementing SHAS at client hospitals. - One major learning experience involved a large error the author made in coding header cards for a client, which halted their accounting for weeks until it was resolved. This illustrated the challenges of inexperienced "green"

1. H.I.S.-tory
by Vince Ciotti, Episode #101:
Siemens, Part 2
© 2013 by H.I.S. Professionals, LLC, all rights reserved.
1969 = Ross &
Royal Roads,
Bridgeport 1971 = 650 Park Avenue,
King of Prussia
1981 = 51 Valley Stream Parkway, Malvern

2. It Was A Very Good Year!
• This week continues the HIS-tory of Siemens Healthcare, today’s
#3 vendor in annual revenue, whose HIS roots go back to the mid-
1960s when IBM developed SHAS, featured last week.
• Thanks to the many HIS veterans who contributed to the origins of
SHAS, which automated patient accounting in thousands of US
hospitals who used it through local Blue Cross, state hospital
associations, and many proprietary firms like Gamut &SMS.
• This week, we cover the early days of Shared Medical Systems for
CIOs who may not have been born when it was founded in 1969.
I was fortunate to be one of SMS’ early employees (#24, hired in
October of 1969), so I’m going to relay the inside and human story
of SMS’ amazing growth to eventually being the #1 HIS vendor.

3. SHAS Was Not Perfect!
• SMS started running IBM’s SHAS soon after its release, and like all
new HIS products (Millennium, Paragon, Soarian, etc.) it had its
share of bugs, design flaws, missing features, etc., all to be
corrected in the 4th quarter per the vendor (but in what year?).
• We touched on one last week which was the Scalar Date routine
IBM came up with to minimize storage requirements back in the
days of their 360 mainframe, whose disk drive had one (1) meg!
• An early SMS programming maven, Glen Marshall, tells the tale
(he’s pictured on the right at our 2007 reunion in FL):
“In the mid-1980s I rewrote the old SHAS scalar date routine,
changing the base-date from 1/1/1900 to 1/1/1960. This
extended the range of dates until September 2049, well past my
100th birthday. For the geeks among us: The original scalar date
calculation was done in packed decimal arithmetic: year x 36525
/ 100 (by lopping-off 2decimal places) then calculations for
month, day, and leap-year adjustments.” (VC: simple, huh?)

4. Y2K Pre-Cursor (still love that
pun!)“My rewrite was based on the date calculation formula used in
satellites, and that formula dealt with the Y2K problem as well.
(I saw it coming early...) In addition, the calculation was done
in binary register arithmetic, which cut the CPU time for date
calculation by 90%. This time-savings was significant.
The billing records were chock-full of dates that entered into
the insurance proration calculations. As I recall, the savings
was nearly a net 10% savings for the overnight billing program
runs. That is a major savings for a mainframe.
All the scalar-date using programs needed to be re-linked to
pick-up the new date calculation subroutine. A one-time
conversion program was run to change the date-base to
1960. Everything works like a charm. Only one program was
not re-linked, though, due to an oversight. And that was the
one that caused the headache and headline in 1989.” – Glen
Marshall

5. Start-Up Ups & Downs
• There was an amazing esprit de corps at SMS in those early days –
as I’m sure there was at HIS new start-up: McAuto, HBO, SAI, etc.
Everyone knew we had to work hard just to survive, let alone ever
make the big times. The hours were long and hard too: I got up
one winter morning to a freezing rain at my home and couldn’t
get the door to my ‘vette to open – the lock was frozen solid! I
tried heating the key with matches, to no avail. Waiting an hour
for the sun to do its job, the phone rang around 9AM – it was Jim
Macaleer wondering why I wasn’t there yet: we started at 8:30!
• And I’ll never forget the “Saturday Club” – a
small group of fools like me who got their dull
admin stuff done on Saturday mornings: “Big
Jim,” Harvey Wilson (Sr. VP), Mike Mulhall (VP of
Installations), Phil Jackson (Terminals), Tony Sam
(CSC)… you could tell who was in by the cars in
the near-empty parking lot at 650 Park Avenue…

6. Inside Humor
• It wasn’t all just work during
those early 10-12 hour days
either – we goofed off a lot to
keep each other half sane...
• We IDs (Installation Directors)
received a stream of memos
from K of P telling us of bugs
that were fixed and new
features or modules.
• I was an ID at SMS’ NJ office,
and wrote this mock memo
to a hot chick in King of
Prussia HQ trying to impress
her with my puny humor (she
was an English Major too).
She laughed, but didn’t buy…

7. Outside Humor
• ID memos were re-written
in English (sort of…) for
clients to learn of new
enhancements by our
Customer Service Center.
• They were called CSC
Memos and #531 went out
that really didn’t do a good
job of explaining some
changes in 1977 to our
new Inventory system...
• The next day, Big Jim wrote
this cover memo to a re-
written version of the
memo apologizing to our
100-odd (sic) clients!

8. New Product Break-throughs
• SMS had an amazing team of programmers, and one of their
technological breakthroughs was called UNIFILE – Ken Shumaker’s
incredibly powerful & flexible early data base system in the 70s.
• Unlike SHAS’ batch processing, it processed transactions in real
time as soon as they were entered (like rival McAuto’s HFC did),
and then passed them on to an on-line data base for inquiries.
• Needless to say, it sold like proverbial hot cakes but as more and
more clients jumped on board, things started to slow down as the
water-cooled IBM 370s of that era had trouble handling the many
census transactions, report writer requests, and db inquiries…
• It was eventually toned down to less-powerful
but more reliable versions called Focus &
Command, but at one of SMS’ infamous Xmas
parties, I had a blast giving Bog Jim, Harvey and
Ken Shumaker T-shirts labeled Uni, Fiand Al!

9. Near Misses
• The earlier HIS-tory episode on SMS (#11 –see them all at
hispros.com) as a shared system pioneer covered two near misses
that might have put SMS out of business early in the 1970s:
– Regionalization that brought SHAS down for days on June 30
– Cash Flow – turning the corner from red to black circa 1971
• Another close call was when SMS moved from rented space at
Ross & Royal Roads in Bridgeport to 650 Park Avenue in King of
Prussia. Phil Jackson, who was assigned a number of challenging
tasks (like ACTIon and the NYCHHC install) headed up moving the
data center, and he asked we IDs to go to client hospitals on three
Saturdays, the first 2 to test the move, the 3rd for the real thing.
• We all went to clients and dumped in batches of cards for the two
tests, with only a few problems switching the hundreds of phone
lines, etc. When it came time for the 3rd test we got the word: the
2nd onewas the real thing – no need for #3. Few complaints…

10. Green IDs
• Another down side to start-up firms is the lack of
experience with the system by their “green” staff.
• Most of we IDs at SMS in the early 70s were totally new
to computers, hospitals and even accounting basics:
- I was an English major from Temple, at my first “real” job
- Al College (eventual VP) was a former school teacher & coach
- TakisPetrakis (sadly deceased) set the record for ID novitiates:
he was the former captain of a submarine in the Greek navy!
• So what, you ask, doesn’t every vendorhire rookies and train them?
We had a 3-week class that tried to teach us every aspect of SHAS
(several million lines of code!), accounting (debits vs credits) and
hospitals (what’s the difference between an RN, LPN and Aide?) –
lots of luck!We learned as as much as we could during those 3
weeks, then were sent out to the real world to learn in the school
of hard knocks, at our client hospitals’ time & expense.

11. Card Column 11 of the Header Card
• Al College & I were assigned to convert St. Vincent’s Hospital in
Staten Island, which had been totally manual on NCR posting
cards. We started with AR, showing them how to fill out coding
sheets for their thousands of ledger cards for keypunching:
• The cards were then sorted into batches of ≈50 each for ease of
handling, and SHAS required each one to have a header & footer
card. On the header card went the hospital’s code (St. V = “O”),
the batch type (new AR = 05), a batch number (001 to 999), etc.
• According to the SHAS OPS manual (our bible!), card column 11
indicated outpatients with a “6.” So Al & I dutifully sorted all the
hundreds of batches by IP & OP, entering a 6 in cc 11 for OP ones.

12. A Catastrophe!
• I squeezed all the boxes of 5081 cards into my car on Friday, drove
them down to K of P to load onto our mainframe. On Monday I
went back to get the TCEs(Transmission Control & Error report),
and was dismayed to have as many boxes of paper error printouts
as we had submitted keypunch cards! It seems what the SHAS
OPS Manual meant to say was that cc 11 separates OP vs IP
charges (batch type 03): new AR from cardswas batch type 05.
• So I drove the boxes of error reports back to the poor folks at the
hospital, who started trying to correct the bewildering array of
duplicate errors that each batch had generated: some from the
AR program, some from the OP billing program. A nightmare!
• Precious days went flying by as all patient accounting activity
halted until we could correct all the errors and balance the AR –
we never did, and after a few weeks, the CFO just wrote off the
difference (6 figures…) before we proceed on to ADT & Billing…

13. Near-Death Experience
• We converted Census and Billing at St. V’s much better, and the
hospital eventually benefitted enormously from automation – it is
still an SMS (Siemens) client to this day! But I must admit, I still
avoid driving over the Goethals bridge thru Staten Island, afraid
the CFO might still be gunning for me somewhere out there…
• I probably almost got fired for the screw-up – I
remember trying to explain to Steve Macaleer my
ID Manager about the error in the SHAS OPS
manual, but he told me to not screw-up again…
• The real irony is that I learned from my mistakes, became one of
SMS’ better IDs (aced my 2nd and 3rd hospitals), and was
eventually promoted to be Education Manager, in charge of
teaching all new IDs the ropes. I told this story to every trainee!
• So is it better to get a rookie who’s very bright and hard-working,
or a stogy old veteran who just repeats the same formula over &
over? I’d look for both: a veteran who is smart & willing to learn!

14. The Takeaway?
• So what can one take away from this story of SMS’ early days –
should a CIO stick with large proven giants like McKesson, Cerner,
Siemens, and other “Top 10” HIS vendors, or take a risk with new
products from start-ups like CSS HealthTech, or RazorInisghts?
• Like so many HIS issues, the answer has both pros & cons. Pros:
– Giants forget their own past when they too were start-ups
themselves, viz: Huff, Barrington & Owen in Walt’s kitchen!
– Small start-ups generally give the best service as any of their
early clients can get the CEO on the phone & they’ll listen!
• And on the other side of the coin, there are cons, like:
– Who can remember hot new start-ups Bulldog IT, IntraNexus
and American Health Net, who rocked just a few years ago?
– An adage from the 60s had it that “No One Ever Got Fired For
Buying IBM” – dare take an unknown name to your Board?
The answer is different for every hospital and every HIS-tory epoch…