Larry Ferguson became president of System Associates Inc. (SAI) in 1985 and led its rapid growth from $5M annual revenue to $50M. SAI created the SAINT hospital information system, initially running on obscure Point Four hardware. American Express later acquired SAI and renamed it FDC, using it to acquire other HIS vendors like McAuto and Gerber-Alley. HBOC eventually acquired FDC and several of its products, rebranding SAINT as Paragon. Though early Paragon adopters faced challenges, McKesson later saved the product which is now one of the most successful small hospital HIS platforms.

1. H.I.S.-tory by Vince Ciotti
Episode #20: A “Saint”
© 2011 H.I.S. Professionals, LLC, all rights reserved

2. But first…
• A huge thanks to the whole SAI family of Saints, who have a thriving
alumni Facebook web site, that Mr. HIStalk (who else?) found:
– http://www.facebook.com/group.php?gid=136508283116
• And one “Saint” in
particular whose HIS
career alone would be
a miniature history of
our industry:
• Larry Ferguson,
president of SAI from
1985 on, who appears
on this dusty cover of
“Healthcare Computing
and Communications,
and kindly took time off
from his busy golf
schedule to tell the tale

3. Another Man’s Story
• The story of SAI actually belongs to another man, who
sadly passed away just a few years ago: Jack Weil
(Another reason why these stories must be told now:
many of the original “HIS Heroes” are passing on –
hell, I start getting Social Security checks this month!)
• Like so many HIS industry pioneers, Jack started his HIT
career in the 60s, along with a high school buddy,
Mason Chrisman (SP?), high school classmate from
Charlotte. - Just like almost everyone else in the
business, Jack and Mason cut their IT
teeth working for IBM in the early 60s.
- Jack left Big Blue to be DP Manager at
Norcom National Bank in 1964-1965.

4. System Associates, Inc.
• In 1966, Jack & Mason left the bank and formed their
own computer company, SAI, originally do do contract
programming for banks or any other industry.
– (shades of early Meditech and McAuto’s GSD…)
• They first wrote programs for IBM mainframe and mini
systems, but soon branched out when they encountered
their first hospital client: Charlotte Memorial Hospital.
• Charlotte Memorial was a
Burroughs shop, running
their early HIS software:
“BHIS” (Burroughs Hospital
Information System)

5. Aside on Early “Pilots…”
• (If you’ve been following this HIS-tory series, you may
have noticed the pattern that so many pioneering
systems were first developed at “pilot” hospitals:
– McAuto’s “HFC” at the Order of St. Francis in Peoria, IL
– IBM’s “HIS” at Monmouth Medical Center in NJ
– Lockheed’s “MIS” at El Camino Hospital in CA
– Meditech’s “HCIS” at Cape Cod Hospital in MA
– Dynamic Control at Variety Children’s in FL
• So it always pays to be the first
wildebeest at the watering hole, right?
• Not so fast, we’ll cover a number of
sad stories where being first
customer meant you found out what
might be lurking in the water…)

6. Another Government Grant
• Another HIS-tory pattern is government grants, to whit:
– Walt Huff and his grant at OSF to build HFC, post-Medicare
• Jack Weil too found another “pilot” that had received a
government grant to build a Pharmacy system: Duke
• Jack noticed the pattern that hospitals seemed to have
the money, so SAI soon concentrated an healthcare,
gradually expanding the Charlotte Memorial and Duke
applications to encompass the full suite of HIS apps
(translated into 2011-speak in red for you newbies):
– Financial apps like ADT (Access), Billing & AR (Revenue Cycle),
Inventory (Materials), Personnel (HR), General Ledger (ERP)…
– Clinical apps were rudimentary by today’s higher standards
(BMV, eMAR, Med Rec, CPOE…), but in those days, just having
Order Entry and Results Reporting applications was huge!

7. Sales Successes…
• SAI named their HIS “SAINT,” punning on the first 3
letters, but it was just that to scores of small hospitals
who loved:
– Turnkey Approach – just like Compucare, DCC, JS Data,
etc., all you had to do was buy it and turn the key!- Service Ethic – small start-up
companies like SAI had to keep
their clients happy to sell more.
- Affordability – the bundle of
apps, minicomputer hardware
and installation was cheap!
- “Total HIS” – note the quotes – it
was no MIS or PCS, but it covered
most bases: financial & clinical.

8. A Rose By Any Other Name…
• Technically, SAI had one oddity: its hardware platform.
• At a time when every other turnkey mini road the
coattails of a hardware manufacturer, such as:
– Compucare on DG, Meditech on DEC, everyone else on IBM
• SAI broke all the rules and picked an odd little box made
by Point Four corporation, with great
price/performance, but with very little name
recognition. • SAI actually covered up the Point Four
name with a tag of their own name,
telling clients “what does the
manufacturer matter, it’s a mini!”
• Pictured on the left is the last surviving
Point Four gear I ever saw at a 100-
bed hospital in upstate NY circa 2000

9. What Might Have Been…
• I actually jump into the SAI story for
a minute, er, week, as you’ll see…
• In 1980, I had joined McAuto in St.
Louis as a turncoat from SMS,
• And was given the assignment of
helping hire 20 new sales reps to
boost McAuto’s sales efforts.
• I was helping Charlie Kean in the South, and came upon
the resume of a hot young rep for SAI named Ferguson.
• I filled Larry’s ears with all my SMS marketing charm, got
him to St. Louis for interviews, and he joined us in 1980!
• Within a week, Jack Weil countered, hired him back, and
the rest, as they say, is HIS-tory, as Larry soared at SAI!

10. Rapid Growth
• Larry was an enormous success as a salesman at SAI, so
much so that in 5 years, by 1985, he become CEO.
• When Larry joined SAI in 1980, the firm’s stats were ≈
– $5M in annual revenue (told you SAINT was cheap!)
– 25 hospital clients (most small, 100 beds or less)
– 50 FTEs (7 in sales), including many HIS notables:
• Daryl Bowles, Tony Baretta, Liz Tsumas, plus
several I had the privilege to know personally:
• Harold Key – an SMS turncoat like me, who
brought all of their sales savvy with him…
• Karl & Beth Friedman - a dynamite husband
and wife team that went on to form their own
vendor consulting company (healthITmktg)

11. Acquisition Time!
• Under Larry’s leadership and the hard work of those early
employees, SAI grew enormously to $50M annual
revenue and about 250 SAINT hospital clients at peak.
• True to form among early HIS vendors,
SAI’s explosive growth caught the
attention of one of the “biggest fishes”
in the US pond: American Express
• AMEX was looking to diversify beyond
its core credit card transaction business
• AMEX also bought a Visa/Master Card transaction
processing vendor named First Data Corporation in Iowa
• SAI was re-named FDC, and starting acquiring HIS firms.

12. Minnow Swallows Whale!Minnow Swallows Whale!
• In an amazing bit of irony, tiny SAI with FDC/AMEX’s
enormous capital, started shopping for other HIS vendors
to buy, so the new IT division would shine internally.
- And who did they target?
McAuto’s HSD!
- By 1990, the parent airplane
giant was shopping HSD around,
and FDC got a steal for a
paltry$77M (annual revenue
≈$100M)• McAuto by then was in a bit of turmoil, with a wide array
of often-competing products on disparate platforms:
HFC, PCS, HDC+, MHS, I.H.S., MRII, RX-
Com, LabCom, Rad-Com, etc, etc, etc.

13. Whale Bites Back!
• FDC also bought out Gerber-Alley, another rising young
turnkey mini star, and even made overtures to HBOC!
• So what became of this HIS vendor-eating FDC monster?
• Well, it may sound like revenge, but the parent Amex
corporation eventually shopped their FDC subsidiary
around, and sold it to to Charlie McCall’s HBOC.
• The Charlotte HQ of FDC/SAI was so big by then, HBOC
kept it open, and poured a bit of R&D into Saint to make:
• “Saint Plus,” first introduced
by SAI in the 80s, and
• Saint Express, newer, more
modern HBOC brochures,
overheads & proposals.

14. DenouementDenouement
• So what happened to all these companies & products HBOC
bought from FDC? Most were eventually sunset, including:
– McAuto’s full range of acronyms (HFC lasted the longest)
– Gerber-Alley (an upcoming HIS-tory episode in itself…)
• With the one major exception being Saint Express
• Around 1995, HBOC decided to give the old war-horse a
true re-write, and take advantage of the latest R&D:
– Client/Server systems! All the range back then…
• So what do you call this brand new system that’s going
to be the best HIS system in the small hospital field?
• Just look up “ParagonParagon” in your Funk & Wagnals!
• Yes, Paragon started out in life as a C/S Saint re-write.

15. First at the Water –Hole?
• Back to our earlier question: is it good or bad to be a
pilot or early adopter of a brand new HIS system?
• HBOC sold ≈50 hospitals on their new C/S Paragon
“vision” in the late 1990s, until the usual problems with
any brand new HIS system inevitably cropped up:
– Late delivery (we’ll have it by the 4th
Quarter of 199X)
– Missing apps (oh, you wanted PR too?)
– Bugs (realize, it is a brand new system)
– Release 3.2.A-II… (that phase is coming)
• Same stories the “pilot” sites of every
system have ever heard since ENIAC!
(think Soarian, ProFit, Release 6…)

16. Risen from the Ashes!
• By Y2K, many Paragon early adopters either sued to get
money back or just gave up & bought another HIS.
– We helped two early Paragon sites ourselves get out of their
contracts, which to HBOC’s credit, wasn’t that hard.
• McKesson execs in Atlanta were just as frustrated, as
drug sales to Paragon pilots were rather difficult…
• New CEO Graham King sent VP Jim Pesce to
Charlotte in 2001 to shut Paragon down.
• Jim took a look at the pure MS SQL data base
and Windows OS, and pleaded to save it…
• Graham relented, Jim became Paragon’s savior,
and this Phoenix has risen from the ashes to be
the hottest selling HIS in small hospitals today!

17. The “Pilot” Lesson?
• It took a while for McKesson to deliver all of the apps
promised: PR and RX finally came around 2005-6.
– And CPOE wasn’t delivered until just a year or two ago…
• But hats off to McKesson (and Jim Pesce) for saving a
bunch of pilot hospital CEO, CFO and CIOs’ careers.
– (Just as Soarian, ProFit and Release 6 will get finished too)
• So what’s the lesson for hospitals today? Easy, don’t
be the first (or 2nd
or 3rd
), but let 10+ “pilots” go first!
• Once all the apps are really there and
the bugs are worked out, then buy.
• And you’ll be as happy as the 100+
Paragon sites today, running the
“new” Saint with roots from 1965!

18. HelpHelp for Future Episodes!?
• The next episodes on turnkey minis I’d like to cover are:
– AR/Mediquest – anyone have details on this early IBM player?
– JS Data – another IBM Sys 34 mini player from Rhode Island
– MSA – the “little one” from Raleigh, formed by Skip Shippee
– Gerber-Alley – started life as an HP mini system written by
Irwin Gerber and Terry Alley, then launched solo by Mike
Brown; anyone have a GA story to tell and/or contact info?
• Thanks much already to the following “HIS-tory heroes”
who helped with info & leads for this week’s episode:
– Bonnie Hughes, now with Cerner, who remembers MSA & GA
– Steve Kilgus of SAI, who put me in touch with Larry Ferguson
– Mr. HIStalk – an obscure blogger who found SAI on Facebook
• Please send any contributions to: vciott@hispros.com