IDX Buys Into The Hospital Market• No, I didn’t screw up and place that graphic upside down – it wasas brilliant an ad as the firm IDX acquired to get into the HIS market• You may remember we left off last week with IDX going public in1995, when they were primarily a physician billing company, withonly a few hospital apps, like HPA (Hospital Patient Accounting).• So with deep pockets from their IPO, IDX went looking for ahospital clinical system to make them a total HIS vendor. Who didthey buy? Easily one of the most famous HIS vendors ever, and onewhose product was the last word in clinical systems at the time, co-founded by two “doctors,” one an MD the other a Ph.D. and MD:– Dr. Mark F. Wheeler, MD, M.P.H., a practicing physician, and– Malcolm A. Gleser, MD, and with a Ph.D. in Biomathematics.• They worked for the U.S. Public Health Service (USPHS) in Seattle,WA, which continue our trend of northern roots for so many HISpioneers – not as cold as Vermont, but far more precipitation!
Sailors’ Charts• When Wheeler &Gleser joined USPHS in the’70s, it was serving mainly American seamenand Department of Defense personnel.• This highly mobile population provided the ideal venue for creatingan electronic chart that would follow them around western ports.• Strange how in their efforts to build an electronic chart for sailors,Wheeler and Gleser found two aircraft manufacturers in those earlydays who were also pioneering systems that automatedcharts:• Lockheed-Martin’s “MIS” – running on IBM 360 mainframes• Martin-Marietta – who were using Tandem “Non-Stop” systems• Back in those DOS/MVS days when a systemcrash could take days to recover from, theappeal of having two CPUs, two disk drives,etc., working in tandem offered a far morereliable platform for an electronic chart whosereliability could adversely impact patient care
Working in Parallel• So the doctors decided to follow Martin-Marietta’s leadand build their system on Tandem Non-Stop computers,as explained below by Dr. Wheeler in an early article:“The NonStop platform was what allowed Martin to win. Thetotal system life cost was lower, because we could add processorsas needed. We really felt that the NonStop platform was optimalfor our kind of work, and we still feel that way today.”• Per the paper below, the USPHS operated 9 hospitals and 26 clinics, sothe e-chart had to enable a given patient’s chart to be shared amongmany entities, much like the RHIO/HIE/interoperable world of today.
Famous Product Name• So what to call this new system? How about “Public HealthAutomated Medical Information System” or PHAMIS for short. Itwas extremely robust, with modules that rival today’s HISes, viz:– Scheduling, ADT, Order Entry, Results Reporting, Medical Alerts,Pharmacy, Laboratory, Radiologic reports, Problem Lists, etc.• In the early 80s, Wheeler &Gleser formed their own companyunder the same PHAMIS name to offer the system to non-USPHSfacilities. Thanks to their physician-friendly design, robust appportfolio and reliable Tandem platform, it sold well to sites like:– Mayo Clinic (Minn), Thomas Jefferson (PA), Montefiore(NY)…• PHAMIS next came up with a name toseparate the company from the product,which they felt was easily the last word inelectronic medical records of the time:
Rapid Growth• PHAMIS rode the wave of thetidal shift in the HIS industryfrom financial to clinicalsystems during the 80s & 90s.• As the chart below shows,revenues grew well, and by1995, PHAMIS had over 300employees, 40+ large IDNclients, and had gone public.
Cross Country Acquisition• On a deal that benefitted airline stocks (both offices were keptopen), IDX from Burlington VT acquired PHAMIS in Seattle in astock swap valued at $147M. The gory details of the 1997 deal:– “Under the agreement, Phamis shareholders would receive 0.73 share ofIDX common stock for each of their shares. Based on IDXs closing priceyesterday of $31.75, the transaction is valued at $23.18 a share. Phamishad 6.35 million shares outstanding as of Dec. 31. Shares of Phamis, basedin Seattle, were up $3.375, to $22.25, before trading was halted.”• IDX re-named LastWord as “CareCast,” and started selling its“integrated” array of physician and other hospital systems,making them a target for the next big takeover themselves…• Next week we’llwrap up the GEsaga, addingmany more barsto this timeline!