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Ups and Downs

February 25, 2009
by Vince Ciotti
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Eagle systems soared, license fees inched upward, and LIS vendors battled it out back in 1989

A look back to March, 1989 to see what was “new” in HIT with lessons for today:

Featured Ad: The Eagle 2000 - A stunning, full-page color ad announced this “new” product from American Healthware Systems in Brooklyn, N.Y. Running on IBM mainframes, Eagle comprised a full array of patient and general accounting systems. Interesting HIStory here: in the early '80s, a little software firm at the same address called Healthcare Information Systems, Inc., made a similar announcement, selling red-hot software for IBM mainframes through a superb sales force led by one of the sleaziest directors of marketing in the business: me! We sold a dozen of the nation's largest medical centers on this breakthrough system, but the programmers never quite delivered, and the firm went bankrupt. Phoenix-like, the former president, George Weinberger, bought the product under Chapter 7 bankruptcy and started again. This time, the programmers delivered, and they sold over a dozen of the largest medical centers in New York during the '90s. So dominant was Eagle in the city, that it was acquired by SMS and is still being offered today as part of Siemens' product line.

1989 HIS Prices: A market review by William F. Andrews, an infamous consultant turned salesmen who hated his six-inch thick RFPs. Bill gave typical prices for HIS systems back then:

Turnkey Mini Systems: from vendors like Dynamic Control, Gerber-Alley or HBO, which were priced at about $1 million for software, a half-million dollars for installation, with software maintenance averaging 1 percent of license fees per month.

Inhouse Mainframes: from IBM, Technicon or Mediflex, were priced at $2 to $3 million for software, $1 million-plus for installation, also with maintenance at “1 percent a month with an upward trend.” The trend Bill reported has sure grown in our era: only a handful of vendors are still at 1 percent of license fees per month; most have passed 2 percent and some are at 3 percent. However, just look at the more bug-free code, far better customer support and “no extra charge” we get now.

LIS Review: Wonder about the leading vendors in the Laboratory Information Systems market in 1989, and their final fate?

Advanced Laboratory Systems (ALS) - from Eugene, Ore., a red-hot, PC-based system bought by HBOC in the '90s (along with 20 or more other HIS firms!) and subsumed into one of their numerous LIS offerings today.

Antrim Corporation - the leader in the reference lab market, eventually bought by Cerner.

Cerner Corporation - an upstart little LIS firm from Kansas City whose revenue in 1989 was a paltry $49 million, so small one wondered if they could ever make it. They talked about adding RX, Radiology and some day even order entry …

Compucare - a turnkey mini vendor with a mumps-based LIS as a part of their DG-based HIS, bought by QuadraMed in the '90s. QuadraMed bought an Australian LIS called Détente a few years back, but have since swapped it out for the “QCPR” Lab module (formerly UltiCare).

Datacare - a pioneering IBM mainframe HIS that competed unsuccessfully along with Technicon for high-end (read “bucks”) clinical systems. Defunct along with their arch-rival Nadacom.

HBO & Company - Huff, Barrington and Owens left McAuto to chase their mini-dream, becoming the $2 billion behemoth of McKesson today. Their LIS was part of “Star Clinicals,” a DG-based minicomputer system known as just Star today, still running in hundreds of hospitals.

IDX - originally Interpretive Data Systems or IDS, they dominated MD billing, but never gave up their HIS dreams, acquiring Phamis' LastWord. It was renamed CareCast and acquired by GE, who renamed it Centricity. A rose by any other name …

Lab Force - a LIS specialty firm that concentrated in the high-end market, but didn't quite make it, although we know of one hospital still running it today.

Medical Information Technology - big name for a little Mumps-based firm from Boston, hopelessly under-capitalized and dreaming of building a total HIS. Their LIS was solid, but not very likely they would ever finish the job.

Sunquest - a side job of Dr. Sidney Goldblatt, the pathologist at Connemagh Hospital in Johnston, Pa., who had the sense to base it to much warmer Tucson, Ariz. before selling to Misys.

Vince Ciotti is founder and principal at HIS Professionals, LLC. His blog can be found at
Healthcare Informatics 2009 March;26(3):88