Jim Macaleer, the co-founder and CEO of Shared Medical Systems, passed away last week. He helped pioneer the healthcare information systems industry by co-founding SMS in 1969 with Harvey Wilson and Clyde Hyde. Under Jim's leadership, SMS grew from a small startup with 10 hospitals to a company with over 7,000 employees and $1.2 billion in annual revenue before being acquired by Siemens. Jim was a strong and caring leader who helped many employees build successful careers and generously shared the company's stock gains. He grew SMS into an enormously successful company through hard work and perseverance.

1. “H.I.S.-tory”
by Vince Ciotti
© 2015 H.I.S. Professionals, LLC, all rights reserved
R.I.P.
Jim
Macaleer,
SMS’ Co-
Founder &
CEO

2. The Greatest HIS-tory Hero
• Sad news last week: Jim Macaleer, the co-founder and CEO of
Shared Medical System (SMS) died. Jim was easily one of the
most successful business entrepreneurs in our industry, having
co-founded SMS back in 1969, and led it to becoming the number
one HIS vendor for decades before its sale to Siemens. Much
more importantly, he was a father-figure to thousands of
employees like myself, who owe their careers to this great man.
• It is difficult to write a tribute to a man who
so many know much better than I, but Mr.
HIStalk is so kind to air these slide shows that
I hope I can get some of Jim’s story across to
the many people who join me in grieving for
his loss. Our sincerest condolences to his
family who at least got to spend so much time
with “Big Jim” over his many happy years...

3. Daring HIS Pioneers
• Like so many early HIS-tory heros, Jim got his start at IBM back in
the 1960s, when their Series/360 mainframes were sweeping the
DP industry. Jim worked in IBM’s Philadelphia office along with
two other HIS-tory heroes whose names should ring many bells:
• Harvey Wilson – of later Eclipsys fame, was a
super-salesman back then with IBM, selling Series
360 mainframes to every large hospital that could
afford them in the Delaware Valley, and some that
couldn’t... ( - don’t get mad, Harv, just kidding!).
• Clyde Hyde – a brilliant scientific researcher in the
then-modern field of Electrocardiograms. Clyde
could speak geek with the best of them, both in
the data processing and medical worlds, and was
a leading expert in EKGs when few heard of them.

4. A Daring Idea
• Jim, Harvey and Clyde weren’t the only ones at IBM selling 360s to
literally every large hospital that could afford them - IBM reps
around the country were soon running out of prospects since the
thousands of small hospitals could never afford the multi-million
dollar mainframe hardware, let alone the costly DP staff to write
COBOL programs and operate the complicated JCL and VSAM files.
• Realizing they were running out
of large hospital prospects, IBM
started writing a “Shared Hospital
Accounting System” (SHAS) in
their Armonk HQ that would
enable a number of small
hospitals share a costly
Series/360 among themselves,
making both the capital and
operating costs far more

5. Shared Start-Up
• SHAS gave Jim, Harvey & Clyde a bright idea – form a company that
ran the 360 mainframe and sell this new system to hospitals!
• They approached Wall St. mavens with their bold idea and sold
them as well as they had sold so many hospitals on Series/360s,
raising $5M in capital to get their new company off the ground.
• Big Jim became the Chairman and CEO, Harvey the Sr. VP of Sales &
Marketing, and Clyde the VP of R & D. They rented office space at a
shopping center in Bridgeport, PA (near King of Prussia) and named
their new firm appropriately enough: Shared Medical Systems.
Here’s the ad they ran
at Temple University
in Philly that got me
my first job at the Ross
& & Royal Roads’ office.

6. Big Challenges!
• SMS faced a number of challenges: a small unknown start-up is a
tough sell in a world dominated by hardware giants like IBM, and
competing shared systems run by giants like GE and McAuto, let
alone almost every state’s Blue Cross systems that also got their
hands on SHAS and started selling it to their local, small hospitals.
• Harvey did incredible miracle work in
sales, recruiting the best & brightest
salesmen from IBM, and leading them in
closing sales all around the country.
• Jim had an even tougher job: managing
the company’s finances as the $5M shrunk
faster than revenue came in. He led by
example, driving a used Dodge Dart so old
that salesmen asked me to pick up
prospects at the airport in my 66 ‘vette!

7. Strong & Caring Leader
• Jim led SMS through some very tough times back in those days:
– June 30th 1970 - SMS re-wrote the SHAS code to allow for
more than a single character for the hospital code, to handle
more than 36 clients. The system went down for days, and Jim
called employees at home to come in on the weekend and
help keypunch cards to re-balance the screwed-up files…
- Jim was extremely generous with
SMS’ stock as well, giving many
employees either initial “penny-a-
share” stock, or, after the IPO in
1975, stock options that locked in
the price at current value, which
increased as the company’s
market value soared, sharing
these profits with the SMS team.

8. Great Sense of Humor
• For a “Theory X” manager, Jim had a great sense of humor. Here’s
two of hundreds of stories about his wit and love of laughter:
– In the early 70s, the annual Xmas parties were a big deal, where
our wives got to meet the weird people we worked with. Jim
actually let us hold a “Roast” like Don Rickles did on TV, where
we all mocked him in public, and he got us back with glee!
• That’s Jim’s younger
brother Terry on the
extreme right, who laid
into Jim (3rd from the
right) with gusto, only
to get an even better
mocking from his big
brother about their
youthful escapades.

9. Employee Memos
• Hard to remember
the days when we
communicated on
paper, rather than
email, but on the
right is a typical
“wise guy” memo
Jim loved to write.
• He issued this one
in 1985 when
then-president
Ronald Reagan
was scheduled to
visit – check out
the last paragraph!

10. CSC Memo
• Jim also had fun with
memos to clients too
– “Customer Service
Center” (CSC)
memos sent to
hospitals explaining
improvements to the
system. One went
out in 1977 on
Inventory that was
rather obtuse, so Jim
sent this follow-up
apology a few weeks
later – it wasn’t
signed, but we all
knew who wrote it!

11. Scary Slip
• One winter day in the 1970s, the company really took a dive
when a snow storm blanketed our parking lot at 650 Park Avenue
in King of Prussia (image in lower right). Jim was working one of
his usual 12+ hour days, leaving the office around 8PM to walk
across the slippery parking lot to his car (he had replaced the
ancient Dodge with a new Chevy – not a Caddy or Rolls, but, a
cheap Chevy!). Jim slipped on the ice, and fell so hard he hurt his
back and had to stay home in bed-rest for several weeks…
• I remember very well how all we K. of
P. employees were rather nervous
about his absence, and eager for his
recovery. We breathed a sigh of relief
when he finally returned after a
month, wearing sneakers to and from
his car, then changing into the IBM-
uniform “wingtip” shoes in his office!

12. How Successful Was SMS?
• Jim’s success leading SMS is best summed up by #s:
– When I started in 1969, we had ≈10 hospitals, 30-odd (sic)
employees, and annual revenue under a million dollars.
– When I left 10 years later in 1979, SMS had several hundred
clients, over 400 employees, and annual revenue of ≈$100M.
– By 1990, SMS had grown to almost 1,000 clients on both shared
and minicomputer system products (ACTIon, Allegra…), several
thousand employees, and annual revenues of over $400M.
– In 2000, when bought by Siemens for about $2B, SMS had over
7,000 employees, and annual revenue of $1.2B
- Add up the 40 years of annual revenue and it’s
over $20 Billion Dollars!!!! Not bad for a
start-up next to a deli at Ross & Royal Roads…
– No wonder Jim & Harvey are smiling in
this picture from our 2009 reunion:

13. Continued Success
• After selling SMS to Siemens, Jim retired and started enjoying
life even more, taking up bird-watching with his wife Jean and
working with numerous not-for-profits in Philly and even
founding a charity near his home in West Chester county.
• On October 21st he was awarded this citation from Terence
Farrell, the Chairman of the Chester County Commissioners:
– “Today I was pleased to present a citation on behalf of the Board to R.
James ‘Jim’ Macaleer, recognizing many of the good and generous things
he has done in his lifetime for the citizens of CC. Dr. Macaleer was co-
founder of Shared Medical Systems (SMS) and a philanthropic institution
in Chester County. Because he is ailing, I read and presented the citation
at his bedside, letting him and his family know that the Board applauds
him ‘for his tremendous dedication to his community’ and that we are
proclaiming January 29th (his birthday) as R. James Macaleer Day in
Chester County. Thanks, Jim, for all you have done, for so many.”

14. Requiescat In Pace
• Early this year, Jim came down with a serious illness which he
fought just as hard as fought his many business opponents.
• Despite being ill, he showed up at an event for hundreds of
former SMS employees Cerner was offering early retirement to
– they were amazed he cared enough to show up and wishing
them all well, congratulated them on their successful careers.
• After his illness worsened, I reached him on the phone in a
nursing home recently, and was amazed he remembered me
after all these years. We shared a few pleasantries about early
the early SMS days, I offered my condolences over his illness,
and he bravely commented: “Nobody lives forever.”
• He died last week surrounded physically by his family, and
emotionally by the thousands of former SMS employees who
were lucky enough to work for him - R.I.P.