2. Dairyland’s 1987 “Vision”
• We left off last week with
Steve and Mark growing the
firm through low pricing for a
surprisingly robust system.
• Steve sent me this design
from a 1987 planning meeting
where they laid out their R &
D plans for completing an HIS.
– Compare it to the bullets
on the previous page ad:
they actually delivered!
• This has to go down in HIS-
tory as one of the earliest
“visions” (their product
name)of an EMR, E.H.R, HIE,
3. Technology Platform
• Mark Middendorf relates how they actually built
it in KADO language on a “monster” CADO mini:
– “In the early days we ran a whole hospital’s financial system
on a machine that had two eight inch, .6MB floppy drives (for
mass storage – not backup). The machine had 16K of RAM.
When the 7.5MB hard drives came out we really thought we
had something – would never run out of storage.”
• Mark has since become Director of Business Development for
McKesson’s “Paragon” – I’m sure he’d like to hear from old pals:
- 612/272-1185
- Mark.Middendrof@McKesson.com
• So to continue our tale of how mark & Steve grew Dairyland, we
now get into a series of acquisitions they made starting in the 90s,
some of which will be mini-HIS-tories of other early HIS vendors.
4. Merger Mania
• By the 1990s, DCC (Dairyland Computing & Consulting)
had grown to over 100 hospitals and $10M revenue.
• Steve Klick began feeling his Midwest oats and looked around for
other small HIS firms to acquire and grow more, and targeted two:
• LeBlanc, Schexnayder & Associates from Abbeville, Louisiana was
the first to hit Steve’s radar screen: they started as a CPA firm way
back in the 60s when Medicare Cost reports drove CFOs crazy. At
the request of many hospital clients, they started building various
financial modules just like Steve had, eventually building a
sizeable client base to where, in 1991, they stopped accounting
and concentrated solely in hospital software.
• They wrote in RPG for IBM’s SYS 36/38
minis, like other early HIS-es: JS Data & DCC.
• Steve started negotiating with them and,
concurrently, another small start-up:
5. Phone Frenzy
• Henderman Management Systems, from Louisville, KY,
who also was writing hospital software in RPG for IBM
SYS 36 minis and were very interested in Steve’s offer.
• Steve went back & forth with them negotiating the $s,
and tells the amazing story of finally getting a phone call from one
of them accepting his offer, while he heard a series of beeps from
another caller trying to get through. He finally did the deal, hung
up, the phone rang again and, sure enough, it was the other one!
• So in one afternoon, DCC had acquired two competitors that just
about doubled its size! Only glitch: different tech platforms:
• Dairyland’s “Vision” system ran under AIX on IBM RS/6000s
• LeBlanc & Henderman ran under IBM’s OS/400 on AS/400s
• The solution? Dairyland now had two “visions” for their clients:
• Vision 6000 for the “RISCy” crowd, Vision 400 for the others!
6. One More Time!
• A few years later, the phone rings again, and this time
it’s Frank Poggio of HMDS, Steve’s Midwest neighbor.
• Frank tells Steve about another small HIS vendor up for sale:
– Integrated Health Systems (IHS) - from La Jolla, California. Like
both LeBlanc and Henderman, I.H.S. ran in RPG on OS/400 OS,
but unlike them, it had a fairly large bed-size client base, from
100 to 40 beds, in keeping with the power of IBM’s AS/400. So
the Vision 400 product line suddenly was bigger than V6000!
• Shortly after acquiring I.H.S, in 1998, Steve finally kicked back and
left Dairyland, and interestingly enough, buying I.H.S. for his son
Brady, who runs it to this day under the moniker of Intelligent
Health Systems (same acronym) based in nearby San Diego.
• They also run Healthcare Anytime
specializing in SaaS patient portals:
www.healthcareanytime.com
7. Getting Confused?
• I am! And it’s getting more complicated:
• In 2001, Dairyland’s new management re-
named the firm “Dairyland Healthcare
Solutions” (DHS), ruling out agribusiness!
• DHS continued to thrive after Steve’s departure, earning several
“Best in KLAS” awards for “community” hospital systems (non-
AMC or multis), beating out competitors like Meditech, CPSI &
HMS (who can tell you some interesting things about KLAS…)
• Acquisition fever didn’t depart with Steve: DHS grabbed 2 more:
• Advanced Professional Software (APS) of Waco, Texas,
acquired in September, 2008, giving Dairyland a foothold in
the deep South. The deal added 140 customers on paper to
Healthland's 350-customer base, although competitors like
Meditech, CPSI & HMS probably garnered their fair share
of APS clients who went to market to check out their options...
8. And Finally…
• DHS’s final acquisition in 2009 was another
Midwest competitor, a hot new HIS start-up
named: American HealthNet - from (relatively
nearby) Omaha, Nebraska, known as AHN.
• AHN actually started out as Nelson Data Systems back in the 80s.
HIS-tory hero Mark Thornton provided this story – he was AHN’s
VP of Sales back then, and is now with another red-hot start-up:
• Prognosis – 800/745-4712 Mthornton@prognosishis.com
• Mark’s AHN tale: Nelson Data Systems (NDS) was formed in the
early 80s by Steve Nelson (who else?), and they developed
financial systems for about 50 client hospitals. Two entrepreneurs
named Jerry Brown and Arthur Taylor later bought NDS from
Steve around 2000, and started building a red-hot clinical
platform called Claris in Bill Gates’ .Net, SQL & Windows. AHN
grew to about 80 hospitals before being gobbled up by DHS in
8/2009.
9. Dénouement…
• After gobbling up all these smaller
competitors, it is only fitting that DHS themselves finally got
gobbled – although not by an HIS vendor, but a Venture Capital
firm known as Francisco Partners from (where else?) San Fran.
(That name may sound familiar to HIS devotees as FP also since
acquired HIS vendor QuadraMed and API, an HR software leader)
• As the last thread in this tangled HIS-tory episode (I promise!),
DHS’s name was finally changed to rid itself of any vestiges of agri-
business (which it never was) or any vestige of its Midwest roots.
• The firm is now officially known as:
although I got quite a kick a few year’s back visiting their HQ in
Louisville, KY (since moved back to Glenwood!), and noticing the
sign-in log near the receptionist’s desk still said “Dairyland!”
(wonder how many times the old name appears in user manuals?)
