Medical Testing Laboratories Dr. Sullivan sat at his desk, reflecting on his move to the Office of Technical Director tomorrow and how it had come about. Dr. Sullivan "A lot has happened since I first stepped into the "old" laboratory on York Road. I was in the process of finishing my Ph.D. when I took the graveyard shift at Medical Testing Laboratory (known informally as Med-Test) working on the SMAC 1260. The SMAC is a large multi-channel chemical analyzer capable of performing 28 chemistry assays on one patient sample. Now, 10 years later, Med-Test has doubled in size, and I am about to assume the role of technical director. This comes as a result of Harry Pearson's recent "resignation" from the position of laboratory director. His position is to be split into two positions: technical director and administrator (see Exhibits 1 and 2). The administrator function is already being performed by our current administrator, David Wilkes who will have the same duties as before. Since my most recent position was R&D director, I will be playing a much different role. The technical director's position requires that I assume an authoritative demeanor, much more than I am comfortable with. I have worked with some of these people for close to 11 years now, and, in some instances, this new air of authority will be difficult to take on. In addition Med-Test is in the midst of a system development project that has proven not only more expensive and time-consuming than anticipated, but also disruptive to the staff. It will be my responsibility to evaluate our current status in this project and to propose a strategy to overcome the obvious problems. This is by far my most pressing challenge." COMPANY BACKGROUND Medical Testing Laboratories was incorporated in the state of Maryland in December 1986. Thirty-two Maryland pathologists comprised the group of charter stockholders and provided the initial capitalization through purchase of stock on an equal-share basis. The corporation is designed and managed to be non-profit and self-supporting. The stock pays no dividends. All shareholders have equal stock-holdings. Any operating profits are returned to the corporation in the form of expanded services and/or reduced charges. The current corporate structure (see Exhibit 2) is managed by a CEO (Dr. Healy) who also serves on the Board of Directors which also consists of the 32 founding pathologists or their elected successors. ___________________________________________________ Names, locations, dates and financial data in this case have been disguised. Med-Test was formed to fill a real need in the local medical community for comprehensive, emergency toxicology services. The goal of the organization was to provide rapid, quality laboratory services to Baltimore-area hospitals and clinics at the lowest possible cost. The scope of services was dictated by demand for laboratory procedures that, by virtue of high cost, low volume, or te ...

1. Medical Testing Laboratories
Dr. Sullivan sat at his desk, reflecting on his move to the
Office of Technical Director tomorrow and how it had come
about.
Dr. Sullivan
"A lot has happened since I first stepped into the "old"
laboratory on York Road. I was in the process of finishing my
Ph.D. when I took the graveyard shift at Medical Testing
Laboratory (known informally as Med-Test) working on the
SMAC 1260. The SMAC is a large multi-channel chemical
analyzer capable of performing 28 chemistry assays on one
patient sample. Now, 10 years later, Med-Test has doubled in
size, and I am about to assume the role of technical director.
This comes as a result of Harry Pearson's recent "resignation"
from the position of laboratory director. His position is to be
split into two positions: technical director and administrator
(see Exhibits 1 and 2). The administrator function is already
being performed by our current administrator, David Wilkes
who will have the same duties as before. Since my most recent
position was R&D director, I will be playing a much different
role. The technical director's position requires that I assume an
authoritative demeanor, much more than I am comfortable with.
I have worked with some of these people for close to 11 years
now, and, in some instances, this new air of authority will be
difficult to take on. In addition Med-Test is in the midst of a
system development project that has proven not only more
expensive and time-consuming than anticipated, but also
disruptive to the staff. It will be my responsibility to evaluate
our current status in this project and to propose a strategy to
overcome the obvious problems. This is by far my most
pressing challenge."

2. COMPANY BACKGROUND
Medical Testing Laboratories was incorporated in the state
of Maryland in December 1986. Thirty-two Maryland
pathologists comprised the group of charter stockholders and
provided the initial capitalization through purchase of stock on
an equal-share basis.
The corporation is designed and managed to be non-profit
and self-supporting. The stock pays no dividends. All
shareholders have equal stock-holdings. Any operating profits
are returned to the corporation in the form of expanded services
and/or reduced charges. The current corporate structure (see
Exhibit 2) is managed by a CEO (Dr. Healy) who also serves on
the Board of Directors which also consists of the 32 founding
pathologists or their elected successors.
___________________________________________________
Names, locations, dates and financial data in this case have
been disguised.
Med-Test was formed to fill a real need in the local
medical community for comprehensive, emergency toxicology
services. The goal of the organization was to provide rapid,
quality laboratory services to Baltimore-area hospitals and
clinics at the lowest possible cost. The scope of services was
dictated by demand for laboratory procedures that, by virtue of
high cost, low volume, or technical difficulty, lent themselves
to performance on a regional basis. Prior to its inception, local
hospitals had two options: (1) send the specimens to the city
morgue to wait their turn for analysis, or (2) ship them to
Philadelphia General Hospital to be analyzed. Both alternatives
were costly and time-consuming. This situation produced
delays in treatment due to the wait for test results. Both factors
affected the cost and quality of health care, particularly the

3. latter, by increasing the length of patient hospitalization. It was
thought the availability of a local laboratory would help avoid
these extra hospital costs and thus provide a significant and
measurable contribution to the containment of health-care costs.
Dr. Healy, an original founder, stockholder and current
CEO of Med-Test, was the chief pathologist at Greater
Baltimore Medical Center (GBMC) in Baltimore in the early
1980s. While offering his services at the city morgue in
forensic medicine, Dr. Healy became acutely aware of the
unsatisfied market demand for services now provided by Med-
Test. While at the morgue, he was able to measure the volume
of outside specimens going through testing and realized that, if
this volume represented only a fraction of the work out there,
Med-Test could not only survive, but also thrive. This
conclusion prompted Dr. Healy to research the market more
thoroughly and to begin acquiring the support of his local
colleagues. Dr. Healy was able to convince these other
pathologists that it was in their best professional interest to
invest their time and money in the concept of Med-Test.
In early 1987, Med-Test opened its doors to the Baltimore
metropolitan hospital community as the first medical laboratory
to offer comprehensive emergency toxicology services. At the
time of its inception, the lab employed 11 people on various
levels, ranging from drivers and secretaries to medical
technologists and the laboratory director. The goal of Med-Test
since its inception has been to achieve a high level of quality,
economy and service in medical laboratory testing. Med-Test
has remained committed to this goal to such an extent that
"Quality, Service, and Economy" form the company logo.
From 1987 to 1993, Med-Test experienced steady growth
and soon outgrew the original York Road location. In 1993 it
erected a 24,000 square foot facility in Parkville, Maryland,
near Baltimore. The new building allowed Med-Test to expand,

4. as the board had no doubt it would, despite stiffening
competition. By 1994, Med-Test had expanded its services to
include immunology, radioimmunoassay (RIA), special
chemistry, and therapeutic drug monitoring. By the end of
2000, Med-Test's total assets had grown to $45.8 million with
annual service revenues of $18.3 million which produced an
operating profit of $458,000. The staff of 65 employees
included a total of 38 medical technologists who performed all
the tests in the lab’s Chemistry, Immunology, Toxicology, RIA
and Therapeutic Drug Monitoring sections.
In it first few years of operation, Med-Test was called
upon to perform the medical tests that hospitals and clinics
could not do in-house, due to either high cost or to technical
difficulty. Therefore, Med-Test originally functioned more as a
public service organization than a business, supporting hospitals
and clinics in an essentially competition-free environment.
However, by the early 1990s, other for-profit laboratories
were beginning to compete with Med-Test for the Baltimore
regional market. These laboratories, both national and regional,
offered similar services at competitive and sometimes lower
prices. The competition can be formidable because clinical
outpatient laboratory testing in the United States is a $23 billion
industry that makes up about four percent of the country's total
healthcare spending. There are large companies that provide
laboratory testing from central facilities. Examples of these
types of companies are LabOne in Lenexa, Kansas, LabCorp
based in Burlington, North Carolina and ACM Medical
Laboratory in Rochester, New York. Although these
laboratories are low-cost and efficient, the disadvantage is the
amount of time it takes to send the specimen to the lab. Med-
Test's local competition comes from American Medical
Laboratories of Chantilly, Virginia and Quest Diagnostics which
operates several facilities in Baltimore.

5. However, Maryland Medical Laboratory, which is located
just off the Baltimore beltway in the Catonsville area, appears
to be Med-Test's most pressing potential for-profit competitor
because it is similar in size and in the type of service it would
like to offer. MML has a staff of 116 employees and produced
revenues of $41.8 million in 2000. MML is active in the
traditional independent physician service market, HMO
physician groups and in the industrial employer testing market.
It has also shown recent strong interest in comprehensive
testing for the Baltimore-area hospital market.
Although these competing laboratories were gaining
ground in some areas of the Baltimore market, they have not yet
been able to significantly loosen Med-Test's hold on its share of
the hospital market. As of early 2001, the competing
laboratories were still concerned primarily with servicing
individual physicians, HMO physician groups and the industrial
testing markets. However, it was also becoming increasingly
apparent that complete automation of currently inefficient
laboratory operations was inevitable in order to maintain market
share into the future and insure high quality standards at a
reasonable cost.
Dr. Sullivan:
"I can recall one especially stormy supervisors' meeting in
late 1995, when the supervisor of Central Accessioning - or
Specimen Login, as we call it - lost her cool about the amount
of paperwork, unnecessary phone time, and report preparation
that she felt were placing an unbearable burden on her staff."
As Sullivan thought back to the incident, his memory was
as clear as though the hassle had happened yesterday.
THE 1995 MEETING

6. Joyce Windsor was raising her voice and getting red. "Dr.
Pearson, I am sure you are aware of the fact that we are
receiving close to 400 specimens daily, and I have only two
people to help me process them. The current system is ancient
and grossly inefficient! The requisition form is next to
impossible to read. Handwritten test requests are ridiculous, for
us and for our clients."
Quieting down, but still clearly very angry, she had
continued; "Why should our clients have to refer to two
different catalogs for our test offerings, and then have to
scribble the test they wish to order on our preprinted requisition
form? A lot of the time, we can’t decipher what they want, and
when we call the hospital to confirm the requests, they do not
know who wrote the requisition out in the first place! Although
we have requested time and time again that clients print on the
requisition, only a handful are doing so, and the rest are getting
sick of hearing me complain all the time. Meanwhile, here at
Med-Test, I've got medical technologists screaming in my ear
for their specimens so they can begin the afternoon tests and try
to get out of here by five o'clock. I cannot be expected to
satisfy the technologists and, at the same time be certain that
the correct test requisition is matched with the corresponding
specimen. You have emphasized to me that the most important
part of my job is ensuring specimen integrity, and I agree with
the absolutely critical nature of proper specimen identification
and documentation. Then, there is the documentation: It takes
one person all afternoon just to place the Med-Test six-digit
identification number on all three copies of each requisition and
match them with the proper specimen. It takes another person
an equal amount of time to phone clients to clear up any
discrepancies and to distribute the specimens to the proper
testing departments. It takes a third person the rest of the
afternoon to write in the log book the patient's name, referring
hospital, patient identification numbers and location, test
ordered, specimen submitted, time and date of submission, and

7. time and date of specimen collection.”
"Dr. Pearson, you cannot put people under this kind of
pressure. These clerks are paid a pittance over minimum wage
to deal with a very high-pressure job. It's not just the amount of
work, but the intensity of the work and the consequences of
making a mistake. There is no continuity of employees, and
frankly, I cannot keep employees longer than a year. My
turnover rate is incredible, and you know how long it takes to
train a person off the streets in the technical jargon necessary
for this position. Finally, we are viewed with contempt by the
technologists and looked down on because we are not medical
technologists. They blame us for the long lag times in specimen
processing, but it's not us, it's the system!"
Val Linden, chief medical technologist in Immunology,
joined in. "Wait a minute, Joyce; you cannot blame the
rudeness of a few bad apples on the whole bunch. The majority
of my technologists understand that it is not your fault, and
those who do not, I would like to know about right now. I will
see to it that those attitudes come to a screeching halt."
Then, addressing Dr. Pearson, he continued, "Dr. Pearson,
I agree with Joyce that something must be done. The
technologists are not going to be able to handle much more
volume with the current manual system. In this business,
profits are based on costs, and costs are closely tied to volume.
Immunology is here every night until 6:30 finishing reports as it
is. Not only do we pay highly trained technologists to do
clerical paperwork, but in doing so, we introduce the risk of
human error and inaccuracy into our work. Look at the
duplication of documentation that occurs. Each department
takes the specimens it is working on and manually logs them
into a binder the same way Specimen Login does.
Unfortunately, under the current system, this duplication is
necessary, Dr. Pearson. The technologists need one central

8. source of specimen information for all of their work so that
when a client calls looking for a prior test result, which they
often do, the technologists don't spend half an hour searching
through old worksheets to find it.”
"The real nightmare starts when the reports on current tests
must go out to the client. Not only do the technologists have to
hand-write the results, they also have to include the proper
normal test ranges and toxic levels depending on the tests, age
of the patient, type of specimen, and fasting status. For some
tests, composing reports can take 45 minutes. Then to add
further delay, we need a driver or messenger service to deliver
the reports in batches to the various local clients, or in
emergencies we phone the most important results, which takes
valuable technician time. At least we should be able to send
some results by e-mail.”
"Dr. Pearson, this system was adequate when we were
performing only toxicology: Those results were either positive
or negative. Now, we do comprehensive assay type tests that
require lengthy and often complicated interpretive information
which needs to be delivered to the client more quickly - we do
need a new system!"
In the present, Dr. Sullivan continued:
"I remember leaving that meeting thinking that the time
had came to take a hard look at acquiring a dedicated computer
system for keeping track of tests and results. Each of the
supervisors had legitimate complaints, and the office personnel
had not even had a chance to voice their concerns yet. I
wondered if Dr. Healy would be more open to discussing a new
lab computer when he heard those complaints at the senior staff
meeting? I remember guessing that he wouldn't be."

9. HISTORY OF TEST AUTOMATION AT MED-TEST
The issue of automation had been periodically discussed at
Med-Test for close to five years; however, Dr. Healy was
always cool to the idea, so it never took off.
Dr. Healy:
"What scared me about the complete automation of lab test
results was that a system failure could destroy, over-night, a
reputation that I have spent years to build. Our clients can't
accept delays or poor service, regardless of the excuse. In fact,
poor response due to occasional systems problems at some of
our larger competitors is what drove many of our clients to use
our services in the first place. In addition, sending patient test
results out on the Internet makes my skin crawl. That
information must remain absolutely confidential with zero
chance of it falling into the wrong hands. Can you imagine
what would happen if an important person’s test results became
public? I’ve heard of the problems a lot of companies have
been having with hackers breaking into their computers. Even
our e-mail system makes me nervous when we send or receive
outside messages. Our customers place quality, service and
confidentiality above all other considerations. Price doesn't
enter into the equation; they pay for reliability and accuracy. As
long as I am the CEO, we will never cut corners, cheapen our
product or violate a trust.
"I know that our old manual system is also time-consuming
and labor intensive, but it is secure and functions reasonably
well, and our customers like the direct personal contact with our
personnel. Besides, I am not really fully convinced that an
expenditure of that size would be cost justified, or actually
result in any improvement in our service at all. Too much
blood, sweat, and tears have been invested in this company to
throw it all away on a system that is untried and unproven in a

10. medical application exactly like ours."
Dr. Pearson:
"I remember telling Dr. Healy a number of times that as
the volume and types of testing continued to build, the
technologists were going to have an increasingly difficult time
working with the manual system. Not only that, but as testing
and the associated reports grew more complex, report quality
and accuracy would deteriorate."
By July 1997, Dr. Healy could no longer deny the need for
test report automation at Med-Test. John Contreras, the client
services manager, played a big role in presenting the problem in
such a way that Dr. Healy finally agreed. John Contreras went
on a campaign to obtain client feedback concerning satisfaction
with the requisitioning and reporting formats. His finding
revealed a major current of client dissatisfaction with these
procedures, especially considering that Quest Diagnostics and
American Medical Laboratories were already offering online
remote transmission of test reports to their clients.
John Contreras In July 1997:
"We're in a service business. Our success is a direct result
of responding to our customers' needs promptly and by using all
available resources. I've spent 10 years in the medical business.
The sum of that experience boils down to one simple statement;
the name of the game is not only quality and service, but also
timeliness. We've built this business from the ground up
through intense personal contacts and a reputation for quality
and service, but the competition is getting too strong for us to
take any of our accounts for granted, or to be slow in
responding to their needs. Out in the field, I've been getting a
lot of feedback from clients requesting clearer, more legible
reports and direct transmission of results to decrease turnaround

11. time. Although we haven't been hit hard by our competition up
until now, this gap in our service is going to cost us valuable
clients very soon. I have nightmares of not only our local
competitors, but also the big for-profit national laboratories
moving into our local market and stealing our larger established
accounts after dazzling them with all sorts of sophisticated new
technology.”
"I'm not talking penny-ante business either; these clients
average about $450,000 worth of tests annually. If we're going
to remain viable and competitive, we are going to have to keep
up with the times. Our customers need the improved service
that automation of test results can provide; if we are not willing
to take that step, you can bet they will go to our competitors
who are willing to respond to their needs."
Finally, Dr. Healy consented, begrudgingly, to support a
Med-Test automation project. After board approval in August
of 1997, Med-Test began the process of deciding whether to
design and build a software system or to buy one of the medical
software packages currently on the market and used by many
competitors.
Dr. Pearson:
"It was no surprise to me that this automation decision was
handled very informally; that's the way we do business around
here. Med-Test's loosely defined organizational structure was
designed to allow Dr. Healy to act as the sole decision maker.
Nothing involving money or technological change is ever
initiated without Dr. Healy's stamp of approval. Lord above, we
hold senior staff meetings with him every Tuesday, just so he
can keep abreast of every last piece of news concerning the lab.
About this computer purchase decision, now that I think about
it, the whole thing was a bit of a charade. The decision to write
our own system was predetermined; more than that, it was based

12. on that programmer, Michael Moody, who just started working
full-time for Med-Test at about that time. Michael Moody had
done various programming jobs for us in the past five years,
small jobs on the Abbott Analyzers or the old SMAC 1260.
Although he began his education in physics, he obtained his
masters degree in biomedical engineering from Johns Hopkins.
It seems that it is taking forever for him to finish his Ph.D. in
Computer Science, also at Hopkins. Even with this educational
background, we found out later, he had never officially worked
as a commercial programmer. In fact, his only other "real job"
had been with St. Agnes Hospital as laboratory equipment
technician."
Dr. Healy:
"I realized Michael had never actually worked as a
programmer, much less designed a system from the ground up
before, but I felt strongly that his extensive knowledge of
medical laboratory equipment, when combined with his
computer knowledge, would prove much more valuable to this
organization in the long run. Computers were - and are -
Michael's life. He even taught classes in the C++ programming
language while working on his Ph.D. at Hopkins. Believe me, I
had inquired about him from his colleagues, and he received the
highest recommendations from all of them. What I'm trying to
say is that I gave Michael a free hand with the project; it was to
be his baby. I know we could have bought a software package
from companies like Delphic Medical Systems, and even with
modification we would have saved time, but would it suit our
needs in the long run? I do not believe that a full-service
laboratory like Med-Test could work within the limitations of
an "off the shelf" system. Med-Test needs a system with
tremendous flexibility, adaptability, as well as reliability, and I
just didn't think we were going to be able to buy those things."
Early in October 1997, Michael was placed in charge of

13. conducting a feasibility study of possible computer hardware
vendors with the purpose of recommending the vendor most
suitable for developing a system for Med-Test's needs. The
selection criteria were cost, reliability, and flexibility.
TEST AUTOMATION AT MED-TEST
In January 1998, the board, on a recommendation from
Michael, approved the purchase of a Data General Corporation
Aviion server which was to be attached to the lab’s local area
network. The system came with 128MB of memory, a 30 GB
disk drive, a DG/UX Unix operating system with a license for
up to 50 users and a C++ programming language compiler. This
project, was considered high risk by Dr. Pearson, who also
approved the promotion of Michael to chief computer scientist
which was the title he desired. His responsibilities would
include systems design, programming and testing, and
documentation, and computer operations and maintenance. At
that time, no formal systems development methodology was
adopted nor was any development, implementation or
management plan submitted to the board for approval.
Dr. Pearson
"It's strange, but this computer project was approached
very casually by the board, considering the magnitude of the
investment. I must admit, though, Med-Test has never really
viewed itself as a business, rather more like a public-service
organization. Med-Test's excellent connections with the
medical community through the board of directors, senior staff,
and the technical staff had, over the years, pretty much
eliminated the need for aggressive sales on the part of the client
services representatives. Many marketing functions had been
performed through the well-developed channels of
communication that exist between the lab and its client

14. hospitals. Therefore, I believe that the automation project was,
initially, just an innovative technological toy that would allow
board members to claim Med-Test was on the leading edge of
technology. In the board's mind, it was not approved to
maintain a competitive edge or to further upgrade the quality of
our service. When it came to quality, the decision-makers at
Med-Test felt they had no competitors."
THE TEST AUTOMATION PLAN
Planning for the system implementation was accomplished
through weeks of meetings between Dr. Healy, Dr. Pearson, and
Michael Moody.
Dr. Healy
"Dr. Pearson and I knew what we wanted the system to do
for the laboratory. It was just a question of translating those
needs into a workable laboratory system. We both wanted to
see "paperless" medical technologist benches. I envisioned a
system that would enable Specimen Login to enter patient
demographics from the test requisition form, paper or
electronic, sent by the client hospital. This entry would result
in the automatic generation of test worksheets for the individual
testing departments. For example, on Tuesday morning, Debbie
in Immunology would simply "click on" Alpha Fetoprotein; a
worksheet with patient and specimen ID numbers needing this
test would print out, and she could go about her work. No more
bulky stacks of illegible patient requisitions for highly skilled
technologists to sort through. When the tests are complete, the
technologist simply enters the results into the computer, they
are certified by another technologist who double-checks for
errors, and with the push of a key, completely assembled and
composed reports are electronically transmitted to the
appropriate hospitals, all automatically."

15. Michael Moody
"I nearly had a heart attack when Dr. Healy first proposed
such a system back in March of '98. It took me some time to
get across to them that the system, after it was up and running,
would need months of manual checks by technologists to
prevent any bugs from slipping through, resulting in erroneous
reports, and possibly damaging the reputation for quality that
Med-Test values above all else. The system he wanted was
ideal, but, for practicality, it would have to be implemented in
several smaller less innovative steps."
THE SCS SYSTEM
Michael outlined the system he had designed, which he
called the Specimen Control System (SCS).
Michael:
"This was to be a practical but sophisticated system
designed to prevent any specimen mishandling and erroneous
result entry or reporting to ever reach the client in the form of
an incorrect report. I planned to create a sophisticated, state-of-
the-art system of edit-checks which would catch over 99 percent
of common data input errors. But once in place, the system
would be absolutely crucial to the daily operations of Med-Test.
Our business depends on adhering to fast turnaround times
because many of our specimen tests are done on an ASAP basis.
So, once the lab operations became automated, any system
downtime would result in our inability to enter results and
consequently, to transmit these results in report form to our
clients."
Dr. Healy decided that Michael would submit a proposal for
each module of the system, describing how it related to the total
picture, as well as the financial, personnel and computer

16. resources that would be necessary for completion. The proposal
would include a deadline, to be approved by the board, and
Michael's adherence to the deadline would be monitored by Dr.
Pearson. It would be Dr. Pearson's responsibility to manage the
system design, development, and implementation, and to
periodically check Michael's progress to ensure continued
adherence to the system goals. Dr. Pearson was to report these
findings to Dr. Healy during weekly senior staff meetings.
Dr. Pearson:
"My control over Michael did not consist of formal weekly
or monthly meetings to discuss his progress. Michael's office
was right next to mine, and I saw him every day, so any
formalized control was really not necessary. As everyone knew,
Michael, although brilliant, was difficult to manage, so
everything was handled informally."
"For example, early in the project Michael told me that he
felt that he should not be responsible for designing an accounts
receivable/billing module that would automatically generate
invoices from the tests that are performed because our pricing
scheme is so complicated that it has never been fully automated
or even documented. The system presently used at Med-Test
depends entirely on the two billing clerks who have both been
with the company for many years. They have memorized
complicated client specific pricing levels, associated with
profile or combination pricing. Apparently, no one at Med-Test
had ever thought to ask the clerks or the Accounting Manager to
fully document these procedures. Therefore, Michael insisted
that accounts receivable/billing was an area that should have
required a separate system design effort, and was outside of the
scope of SCS. Besides, he said his expertise was in science, not
accounting."
Eric Gordon (Senior Medical Technologist):

17. "The arrival of the Data General Aviion server caused a
real uproar among the staff. Everyone was dying to see the
computer do its first trick. You could definitely say that in the
beginning, Michael and his new computer had overwhelming
support."
Test automation at Med-Test officially began in April 1999
when the old gamma counter in the radioimmunoassay section
was interfaced with the Data General using a protocol
conversion program written by Michael in the C++
programming language. A gamma counter is used extensively
in RIA procedures because the test assays are based on
detecting the amount of radioactivity in a patient sample. The
manual system had involved taking hundreds of raw counts from
the gamma counter and then entering them into an Excel
spreadsheet which performed many mathematical calculations
and then constructed graphs to help technicians obtain
meaningful patient results. With the interface program, the
counts were fed directly into the Data General as they occurred,
and patient result data was calculated, summarized, graphed and
printed out automatically. A new, fully automated stand-alone
gamma counter could have been purchased, but Dr. Healy had
faith that Michael could achieve better results by interfacing the
old counter, and at a lower cost.
From May through December 1999, Michael was busy
designing the rest of the SCS system, which he planned to write
in C++ as well. Michael's estimated completion date for the
entire system was October 2000. Though he was under
considerable pressure to finish on time, Michael was against
hiring any additional programmers; however, he was training
Eric Gordon to do some of the "grunt work" for him.
Dr. Pearson:

18. "I felt from the very beginning that Michael was going to
need some help - technical help from another
programmer/systems analyst - not from a medical technologist
who had never worked with a computer programming language
before. Michael resisted this suggestion vehemently, and Dr.
Healy chose to go along with him."
Med-Test had functioned effectively for some time using
the manual system, and although there was internal pressure
from the board to fully implement SCS, great pressure was also
building from the outside to automate its test reporting
procedures.
John Contreras, having been told that Med-Test would be
fully automated by October 2000, had been promising clients
computerized reports and remote report transmissions for almost
a year. In September, one month before the proposed
completion date, he was becoming extremely concerned about
Med-Test maintaining credibility with its clients. One $600,000
account, Sacred Heart Hospital, was particularly troublesome.
Contreras had serious doubts about retaining the hospital's
business if the automation promise was not kept. Armed with
this information, Contreras went directly to Dr. Healy. At that
time, Dr. Healy had "about had it up to here with this whole
system development project."
It had been well over a year since the Data General's
installation at Med-Test, and the only concrete result Dr. Healy
had seen was the completion of the protocol conversion program
for radioimmunoassay procedures. He had heard very little in
the way of feedback from Dr. Pearson. Although he knew part
of the blame was his, he began to wonder if this whole project
was going to succeed. He wanted his clients to see and
appreciate the benefits of spending so much time and money on
information technology. Angered by John Contreras's
information concerning Sacred Heart Hospital, he decided to

19. give Michael an ultimatum.
Dr. Pearson
"Dr. Healy came back and chewed me out for not keeping
on top of the system development project and accused me of
mismanaging Michael. Dr. Healy gave Michael exactly 30 days
to put together a program that would allow us to transmit
computer-generated reports to Sacred heart Hospital."
Under fire, Michael decided to jerry-rig a program
designed to produce reports solely for Sacred Heart. This was
in spite of Michael's misgivings (not voiced to anyone) that
such an approach would cause major system integration
problems in the future.
On October 30, 2000, Med-Test transmitted its first report
to Sacred Heart Hospital. However, the report-generating
procedure was not a workable, efficient system for the entire lab
by any means.
Eric:
"What Michael did was to create a system he called
"HEART" that allowed Sacred Heart's patient specimens to be
logged in and then it allowed the technician to compose and
transmit a test report by e-mail. The technologists would write
the test results in the old manual way for Sacred Heart, give
those results to me, and I would enter them on my PC in a pre-
formatted form Michael designed especially for Sacred Heart.
The system was very crude and simple. In fact, its only benefit
was that it allowed us to produce a computer-generated report.
It took almost as much time to compose reports using the
HEART system than it did to compose them manually. At this
time, I was the only technologist who could use the HEART
system. The other users were the two Specimen Login clerks

20. who could operate the simple login portion of HEART to enter
patient demographics. A typical report would involve the
following steps:
1. Specimen Login would create a file on the Data
General consisting of patient demographic information for each
specimen.
2. I also entered each test result into another Data
General file which I could use to call up and insert standard test
result lines similar to the following:
Dilantin.......................#### mg/dl
The file also contained the normal test ranges and any
interpretive information necessary for the report.
3. I would then have to go back to my PC and merge the
relevant portions of the patient demographic information file
with the test result file. The system would then give me the
report's shell consisting of five lines of patient demographics on
top, and Dr. Harry Pearson's name and title on the bottom line.
In between were the test results where I had to key in a
numerical result, taken from the technologist's paperwork, for
the cross-hatch marks shown in step 2.
4. This process had to be repeated for every test report
and then double checked for errors.
5. After composing each report, I had to go back and
attach the report file to an e-mail document for transmission to
a Sacred Heart PC which would then allow viewing and/or
printing of the report. The process of composing reports in this
manner was more complicated with some reports than with
others, but the whole process still took me close to ten minutes
per report, and that's just for Sacred Heart!"
"I worked with Michael from November 2000 through

21. March 2001 to maintain and expand the system for Sacred Heart
Hospital. By May 2001, five additional large hospitals had
been added to the HEART system. In addition, several
extremely cumbersome test assay reports, including lengthy
interpretations, were added by Michael to the HEART program.
"Many of our technologists had begun composing their
own reports by using the Heart program. This was despite the
fact that there had been no formal orientation program on how
to use the system nor any formal documentation. Much of my
time was spent explaining the procedure to the technologists,
which severely cut down on my own productivity."
Michael Moody was sitting in his office, which was more
of a glorified closet. Printouts were piled one on top of another
on, alongside and under the desk. Along the back wall he had
built a bookcase that was overflowing with Data General
operations and software manuals. Beside the window was a
large framed picture of Mickey Mouse in the Magic Kingdom of
Disney World.
Michael:
"I warned Dr. Healy that, once I brought an unfinished
system like HEART on-line, it would require almost all of my
attention for maintenance and user-requested enhancements
which would hinder me from bringing the full SCS system on-
line. I also predicted that the technologists would request new
applications that would seem justified in the short run, but in
the long run would also prolong completion of SCS. My
warnings were disregarded."
It wasn't until July of 2001 that Michael declared the SCS
program operational. In reality the program was still
technically incomplete because most reports still required some
manual editing and manual file merging during composition,

22. and transmissions were still being done one at a time by Eric.
From July through August, 2001 Michael has worked
primarily on minor operations, maintenance and "fine-tuning the
system." In the words of Eric, "he did nothing at all." SCS still
had not been completed, users still did not have on-line access
to centralized patient and test result files and computerized
invoicing had not even been started. Dr. Healy had reached his
limit, and he asked for Dr. Pearson's resignation.
Dr. Healy:
"I was very dissatisfied with the delays involved in
implementing the SCS system and getting it on-line. For the
amount of money we invested and the manpower spent, I felt
that Dr. Pearson, in his role as administrator, should have made
an attempt to control the situation. Never again do I want this
laboratory placed in the position of losing a valuable account
due to project mismanagement.
"I don't blame Michael for the situation. He is a very
talented individual and also dedicated. I place the
responsibility squarely on Dr. Pearson's shoulders. He failed to
establish effective lines of communication with Michael on the
progress of the project. By not doing so he was unable to
establish any effective means of control. He never realized the
tremendous potential or difficulty of what we were undertaking.
"Jerry Sullivan will be a much more effective manager
than Dr. Pearson. He's been with us from the beginning and has
a very good rapport with the staff. Most of all, he is someone I
can count on to get things done. He doesn't have to resort to
pressure tactics or histrionics to make his point. That is a very
important attribute when you are dealing with highly educated
people with very fragile egos. I like to think of our lab as an
extended family with wide open channels of communication

23. from the top down. Dr. Pearson got away from that philosophy.
The situation had to be on the brink of catastrophe before he
would take any corrective action or even consult with the
personnel involved."
Dr. Pearson:
"With the advantage of 20/20 hindsight, perhaps we went
about it all wrong. We were breaking new ground, and neither
Dr. Healy nor I had any real experience with systems
implementation. Our background is in medicine, not
programming or systems analysis and design. Dr. Healy felt
that Michael knew what he was doing and trusted his judgment.
Dr. Healy, Michael, and I reached an informal understanding on
what we needed and wanted. Because of our extensive
background in toxicology and laboratory testing, we didn't feel
there was a need to consult the technologists or our customers
to tell us what we already knew. We trusted Michael to do the
implementation. We made the mistake of letting Michael set his
own timetable and manpower estimates. You must understand
that Michael is a unique individual. You have to tread lightly
around him, or you'll get nothing productive out of him for a
week. The man's a near-genius and very good at what he does,
but I sometimes wonder if he has any comprehension of what
goes on in the real world. He doesn't realize that deadlines
have to be met and that benefits have to be weighed against
costs. He would always insist on perfection, even when we
could have gotten along with "good enough" and saved time and
money in the bargain.
"I don't feel that the lengthy implementation process has
done the laboratory any real harm. We are still expanding
within our own market niche, and our long-term relationship
with our established accounts has not suffered in the least. Of
course, the ultimatum from Sacred Heart shook things up a
little, and we had to light a fire under Michael in order to save

24. that account. It was his fault though, because he set the
timetable and then wouldn't live up to it after John Contreras
had stuck his neck out to the client. Michael worked hard to get
the HEART system on-line. I was afraid the man was going to
have a breakdown for a while there. Afterwards, his production
did fall off dramatically, but I had more pressing matters to
look after. If Michael wanted to continue reinventing the wheel
until he reached perfection, more power to him; I had a lab to
run. Besides, because of his close relationship to Dr. Healy, I
tried to maintain a hands-off policy towards him and his work
as best I could. If I pressed him too hard, all he had to do was
pick up the phone and give Dr. Healy a call to get my orders
overridden. I preferred to save my credibility and influence for
battles that had to be won; ones that had strategic importance,
not the shenanigans of Michael Moody."
Jerry Sullivan:
"As the new director, my first priority has to be the SCS
project. There's got to he some way to get a handle on it. My
easy rapport with Michael will certainly be beneficial in
establishing effective control. The question is, how do I build
controls into an administrative policy that will accomplish my
objective without stepping on Michael's toes?"
EXHIBITS
EXHIBIT 1. Med-Test, Organizational Chart Before Dr.
Pearson's Resignation.
(

25. CEO
Dr. Healy
)
(
Board of
Directors
)
(
Laboratory Director
Dr. Pearson
)
(
Administrator
D. Wilkes
) (
Client
Services
J. Contreras
) (
Computer
Scientist
M. Moody
) (
Director of
R&D
Dr. Sullivan
)

26. (
Toxicology
)
(
Transportation
Director
) (
Accounting
Manager
)
(
Chemistry
) (
Personnel
Director
)
(
RIA
)
(
Immunology
)
(
Therapeutic
Drug Monitoring
)

27. (
Central
Accessioning
)
EXHIBIT 2. Med-Test, Organizational Chart After Dr.
Pearson's Resignation.
(
Board of
Directors
)
(
CEO
Dr. Healy
)
(
Administrator
D. Wilkes
) (
Director of
R&D
Dr. Sullivan
)

28. (
Accounting
Manager
) (
Client
Services
J. Contreras
) (
Computer
Scientist
M. Moody
)
(
Personnel
Director
) (
Toxicology
)
(
Chemistry
)
(
Transportation
Director
)

29. (
RIA
)
(
Immunology
)
(
Therapeutic
Drug Monitoring
)
(
Central
Accessioning
)
1