6th of Today’s Leading HIS Vendors• This week we begin the 6th episode on today’sHIS vendors: NextGen, whose 2011 annualrevenue places them right behind Meditech:- $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 AntoninoPapallardo- $353M = NextGen: née Quality Systems Inc. founded by Sheldon Razin- $174M = CPSI, founded by M. Kenny Muscat & Denny P. Wilkins (who??)- $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
A Complicated Family History• Actually, I wish the HIS-tory of NextGen was assimple as that graphic on the title slide implied!• In fact, it is the convoluted story of a half-dozenassorted HIS vendors over the past 4 decades.• Time doesn’t allow the full story of all the firmsacquired such as H.S.I. and P.M.P. of Hunt Valley…• So we’ll just cover the 4 biggest of the “Previous-Gen” firms that got acquired/merged over timeand that have the most impact on hospitals today.In chronological order of their founding, they are:- QSI, founded by Shelly Razin way back in 1973- Sphere, founded by FlorianWeiland in 1984- Opus, founded by Rhoads & Beck in 1987- IntraNexus, founded by Rick Opry in 1992
A Bit “Long In The Tooth...”• The story of QSI takes us way back 4 decades agoand into another niche in HIT systems: dentistry.• QSI’s founder, Sheldon Razin, cut his teeth (so tospeak) in technology at MIT where he got his BS inmath (ironic that he didn’t meet Neal Papallardoandcompany there or he might have joined Meditech!),then started working for Rockwell International.• He next formed Quality Systems in the early 70s,with $2,000 of his personal funds, developingsoftware for commercial and space applications.• Selling space systems was hard as pulling teeth,so he tried simpler systems for dentists, whosepractices then were as paper-driven as hospitals• We won’t drill-down any more into dentistry asmy annual exam is coming up and I get nervous…
Growth, IPO & First Acquisitions• There must have been a large cavityin the dental system market whichShelly filled rapidly, capping QSI’ssuccess by going public in 1980(that’s him in the middle on left).• QSI’s market cap (right) grew equallywell preparing the firm for a numberof subsequent acquisitions andmergers, starting in 1996 with:- Clinitec– which was formed by Pat Cline (pictured onthe left) and Bryan Rosenberger (both since retiredin1993 to sell software for converting MD practice’spaper charts into electronic medical records, at atime when the term EMR didn’t even exist yet!
Next Target…• QSI next set its sights on a PracticeManagement System (why doesn’t anyoneever use the simple acronym “PMS”?) tocomplement Clinitec’sEMR for physicians.• The firm they targeted was led by a talented individual who is stillwith QSI to this very day: Tim Eggena, pictured above. His brief bio:• 1990 graduate of Auburn S.C. where he started in the College ofBusiness as a finance major, but ended with a degree in MIS.• His first job was in nearby Atlanta at… (are you ready for ashock?) some local software firm named “Gerber-Alley”!• What a small HIS world, no? Anyway, Tim tiredof G-A’s green-screen, mini-based HIS andjoineda group of young G-A programmers meeting onweekends to design a system for the red-hot PCsflooding the market. The group fizzled ≈1993…
Birth of:• Tom knew the CIO at Bayfront Medical Center in St. Pete, FL, andshe inquired about a PMIS (yeah, I’m chicken too...) for PCs.• Tim and Steve Puckett (CTO today) formed MicroMed HealthcareInformation Systems to write a scheduling system in Windows(probably 3.1 – back then Gates was still stealing ideas fromApple’s for Windows ‘95……), which went live at Bayfront in 1994.• Through word of mouth, MicroMedsold several more practicesand started building their total PMIS: Reg., Sched., BL and AR. Timand Steve needed capital to continue growing and debated anIPO, being acquired, or merging with a larger firm. The answer:• QSI acquired them in 1997 astheir PMIS, to combine withCliniTec’sEMR to create a totalsolution, which they namedaround 1999 as “NextGen.”
Next Week…• So that’s how QSI started in dentistrysoftware, and ended up as a leader inthe physician practice market withtheir “Next Generation” combinationof CliniTecand MicroMed• So what’s this got to do with HospitalInformation Systems you ask?• Stay tuned for next week as we coverthe three HIS vendors QSI acquirednext that now make NextGen as majora player in the HIS market as in PMIS:- FlorianWeiland’sSphere- Tim Rhoads & Fred Beck’s Opus- Rick Opry’sIntraNexus