- McAuto (later McKesson) developed the first hospital software called HDC to run on minicomputers and automate order entry and results reporting, making mainframe solutions more affordable. However, some felt a Four Phase minicomputer alone could do the job without a larger DEC PDP mini. - Walt Huff and others left McAuto to form their own company called HBO and developed the MedPro software to run on a Four Phase mini. MedPro saw great success in smaller community hospitals. - MedPro's pricing model of bundling hardware, software, and implementation into one upfront price helped drive more revenue for HBO compared to shared systems, fueling HBO

1. The Mini Revolution:
Software Pioneers
“H.I.S.-tory”
by Vince Ciotti
Episode 15:
© 2011 H.I.S. Professionals, LLC, All Rights Reserved

2. Turnkey Mini Software
• So for all these DEC and DG minicomputers made in the
1960s, just where did the hospital software originate?
– McAuto! – Yes, Virginia, the shared system giant built the first
software that made minis mighty, and eventually led to HBO!
– HDC – “Hospital Data Collection” was the name Mac gave to a
project started in the early 70s to automate Order Entry &
Results Reporting, making mainframe solutions affordable.
• Why automate such a mundane series of clerical tasks?
Remember how Order Entry and Results Reporting enabled
Mike Mulhall to cure the paper blizzard at Monmouth:
 MDs scribbling orders on an “order sheet” in the chart
 RNs “red-lining” each order as they transferred them to:
 Multi-part paper requisitions or “zip sets” for each order
 Imprinted with “Addressograph” plates (plastic ID cards),
that contained (hopefully!) that patient’s account number.

3. Manual Order Entry “System”
• Order requisition were “zip
sets” with carbon copies (aka:
“NCR” paper), to create:
An original for the chart,
Copy hand carried to the dept.,
B. O. copy or “charge ticket.”
Results took an equally
labyrinthine paper/clerical
path back to the nurse
station and (hopefully!) the
correct patient’s paper
chart, where they were
“shingled” for physician
review (or lost/borrowed…)

4. McAuto’s HDC Solution
• In the early 70s, just as HFC was taking off for patient
accounting, Chuck Barlow’s software engineers started
programming a DEC PDP to communicate orders/results.
• For rapid response times, they added a Four Phase mini as
a “front-end” to handle communications among the many
terminals on nurse stations and ancillaries “STAT!”

5. Dissent in McAuto’s ranks
• A battle arose inside the HDC team:
– Walt Huff, who had came from OSF with his
HFC shared system team, including:
• Bruce Barrington and David Owens,
– Thought the Four Phase could do the job
alone, without the cost & complexity of the
DEC PDP mini. Mac’s techies disagreed…
• So, Huff left in one, and formed his own
company with Bruce and David back in
Peoria, appropriately named:
• Legend has it they set up a Four Phase in
Walt’s garage, and began programming
an Order Entry system named MedPro

6. Sales Tsunami
• MedPro met with amazing success in the community
hospital market (under 400 beds), whose “normal” size
hospitals could not afford the millions of a mainframe
and associated programming staff, but would gladly pay
thousands for a mini and its “turnkey” software,
• Especially if it offered the same order entry & results
reporting applications that their shared financial system
vendors couldn’t deliver on slow telecom of the day…
• Ironically, Walt & company’s intimate knowledge of HFC
enabled them to write a superb interface to its shared
financials, better even than Mac’s own HDC!
– After all, they had authored both systems!

7. MedPro Breakthrough$
• As sales and revenue rolled in, HBO grew exponentially,
and expanded the early MedPro apps to include ancillary
department systems, and even nursing documentation.
• But HBO’s most telling breakthrough was in pricing:
– Shared systems were priced on volumes, e.g., $.25 per AR
account per month, and $1 per patient day for IP billing,
reflecting the costs incurred at the shared data center…
• So, the TCO over time was high, but immediate capital costs low.
– MedPro sold itself as turnkey systems did in other industries:
• “X” thousand for the mini, “Y” thousand for software license fees, and:
• “Z” thousand for installation! Prior to this, we IDs and CSR reps were
free, with only out-of-pocket travel costs passed on to hospitals.
• Needless to say, every other vendor jumped on this bandwagon to
where by today, implementation fees often exceed license fees!

8. Wall-Street Breakthrough!
• By booking the entire sale (hardware,
software and implementation) at once,
HBO realized far more revenue in the
year of a sale than the shared systems,
who were then booking only each
year’s revenue as they invoiced it...
– (no need for Sarbanes-Oxley Laws then!)
• When HBO went public, it’s stock
soared as much as Med-Pro sales, and
its high-flying shares provided capital
for numerous acquisitions, leading
eventually to the McKesson mega-
vendor we know and love today.
- more of HBO’s full saga later…

9. Where the ACTIon is…
• MedPro even made inroads into SMS’ SHAS client
base, prompting Harvey Wilson to strike a deal:
– SMS’ techies had been working on a DEC-based OE/RR
system something like HDC, but with no Four Phase.
– Programming took longer than expected, and, tired of
losing sales, Harvey bought rights to MedPro for SMS
• Betsy Palonis in my Education
Department got the job to come up
with a name, and picked “ACT I”
• Act II was to be Lab, Act III = RX, etc.
• After printing countless buttons and
signs, the attorneys found that name
taken, so she creatively came up with
“ACTIon,” to save the buttons!

10. What Did ACTIon stand for?
• All Communication Transmitted Immediately
– Of course, it didn’t take the many wise-guys in King of
Prussia to dream up a meaning for the last two letters:
–Or Never!
• Actually, SMS also used Four Phase minis as a hot terminal
device to finally replace keypunch cards & 1050 terminals:
• The death of keypunch cards started with IBM’s
2770 line of “high-speed” terminals (such terms are
relative…). Notice at right, no more IBM Selectric!
• I can still remember looking at the first 2770 green
phosphor CRTs and wondering “Where’s the data?”
• Was tricky to correct a TCE: how do you find the
43rd
card in batch number 106 on a CRT??

11. ACTIon Evolution
• Cranking up its superb sales team, SMS began to
sell ACTIon aggressively, and it morphed into:
– ACTIon 200, 400 and 600, MedPro on Four Phase 4/40s
and 4/70s, offering mainly ADT, OE and RR applications.
– ACTION 1100 and 1500, the DEC-based OE/RR system
the programmers finally delivered, with ancillaries too.
• Soon, turnkey minis were selling like proverbial:
- Just as shared systems swept the
financial system market in the late
60s and early 70s, turnkey minis
systems in the late 70s introduced
clinical systems to countless small
and mid-sized US hospitals.

12. Minis go Maxi!
• Many other entrepreneurs besides Chuck, Walt &
Harvey saw the money to be made in minis:
– Not only “add-on” clinicals to shared financial systems,
whether order entry systems or standalone ancillaries,
– But entire “Hospital Information Systems”
encompassing both financial and clinical apps on a single
mini platform
• The genie was out of the proverbial bottle!- In the next HIS-tory installment,
we’ll explore some of the many 70s
& 80s firms who made minis rival
mainframes in functionality, and
beat them in price/performance…
Dynamic
Control