CPSI led other major EHR vendors in the percentage of hospitals that received Meaningful Use funds according to HHS statistics. The document discusses four keys to CPSI's success: 1) Hiring recent college graduates and providing training, 2) Locating employees near the corporate HQ in Mobile, AL, 3) Acquiring few other vendors or products, and 4) Emphasizing integrated systems. The strategies allow CPSI to have lower payroll costs while maintaining company culture, appeal to local clients, and provide an integrated suite of clinical and financial applications.

1. H.I.S.-tory
by Vince Ciotti
Episode #78:
CPSI
Part 3
© 2012 by H.I.S. Professionals, LLC, all rights reserved.

2. Per Modern Healthcare…
• In case you wonder why we’re
dwelling so long on such a small
vendor as CPSI, check this out:
– Just this October, Modern
Healthcare published the graph
on the right based on HHS
statistics ranking HIS vendors by
their percentage of the 1,400
hospitals that have attested thus
far for Meaningful Use funds.
– CPSI led the pack, even edging
out Epic, Meditech and Cerner!
• Kenny Muscat & Denny Wilkins must
have been very proud, but what
were the secrets to CPSI’s success?

3. Keys to Success?
• This leads us into an area I promised in the intro: what CPSI has in
common with Meditech and Epic, which will make a fun lead-up
to their two HIS-tories that will come up in a few months.
• There are several things these three leaders in the small, mid-size
and large hospital markets (in that order) share:
1. Rookies – for most of their staff, they hire college graduates
right out of school, with little or no prior HIS experience…
2. Corporate HQ – all of their employees live in or very near
their corporate HQ city: Mobile, Boston and Verona.
3. Acquisition-Free – two of these vendors roll their own HIS,
acquiring no vendors and/or products; one has done a few…
4. Integration – the hallmark marketing slogan for all three,
although in truth two have gaps: one big, the other small.
• We’ll next look at each of these four areas in turnin detail:

4. Rookies
• I can’t discuss this subject without remembering my first job in
HIS in 1969: I was an English Major at Temple U. in Phila. And was
hired by SMS to install IBM’s SHAS system. After a few months of
reading IBM manuals and attending an (excellent) class taught by
some of the best & Brightest IBM ever had (and SMS ever stole),
they sent me up the NJ turnpike to St. Vincent’s Hospital in Staten
Island. There I pulled out the SHAS OPS manual and my class
notes, and proceeded to convert their AR from posting cards.
• A few months later, the hospital had to
borrow money from Blue Cross to meet
their payroll, as we had totally botched the
conversion by simply getting one field
wrong: card column 11 of the header card.
- as SHAS devotees know, itshould contain a
“6” forOPcharges (batch type 03), not for
new AR from card input (batch type 05)!

5. So Why Rookies?
• So why in the world do the three leading vendors today still hire
college graduates who can’t spell RN or MD? Several reasons:
1. Cost – Forget all this “partner” crap,
vendors are in it for the money and
college graduates are the cheapest FTEs
one can find, hence the lowest Payroll
costs and highest profit margin. SMS
paid me $7,500 in 1969, while savvy
veterans like Karl Sydor, who SMS hired
in 1970 to bail things out at St. V’s,
probably earned twice as much…
2. Malleability – Once these kids go through your training class
and work under the few experienced managers, they learn
the “CPSI (or Epic or Meditech) Way,” reflecting the company
culture and values, making sure clients do things just the way
corporate wants them to, whether good or bad for the client.

6. The Other Side of Rookies
• There are some up-sides to recent college graduates too, namely:
1. Work Ethic – SHAS became my life back in the
early 70s as I dog-eared the OPS and PDM
manuals, and memorized every ID memo
Mike Mulhallsent out on new modules and
features. Usually on Saturdays. We travelled
on personal time to be at the client 9AM no
matter how far they were from SMS, and
stayed until 6PM most nights. Truth is, the
clubs didn’t fill up with hot chicks until 10PM
anyway, and most were closed on Sundays..
2. Promote-ability– The natural weeding out process caused any
“losers” to either leave or get canned, and led to a rash of
promotions of those who earned it. For example, David Dye
joined CPSI right out of school as an economics major, and
worked his way up the ranks to become CEO in only 9 years!

7. Corporate HQ vs Field Offices
• The Internet age has changed things a bunch since the 70s and
80s when these three companies started, but they can’t shake
their tradition of having all employees live in or near their HQ.
• And it must hurt sales as
those Boston accents from
Meditech reps and “good old
boy phrases” of CPSI reps
from Mobile grate on ears
from California or Iowa!?
• Which might also explain why Meditech dominates the New England
market and CPSI owns the deep south: those CIOs understand ‘em!
• Once again, however, the main motivation is monetary: clients pay
for all trips to clients during implementation/service, leaving the firm
to pay only for relatively fewer sales & marketing trips by reps.
• Of course, Epic faces no such problem as Judy merely sits in Verona
and waits for large AMCs and IDNs to “apply” for a proposal…

8. Little/No “Acquisition-itis”
• This fabulous graphic Mr. HIS-Talk published a while back sums it
nicely: these three leading vendors acquire little or nothing!
- As opposed to scores of bars for most vendors such as Cerner:
• In case you’re going blind trying to read the fine print, Meditech’s
two acquisitions are LSS (Lake Superior Systems), their physician
practice solution, &PtCT (Patient Care Technologies) home care.

9. Integration
• The “Holy Grail” of so many CIOs tired of being
ripped off by vendors who over-charge for
interfaces, then the inevitable finger-pointing
between them whenever things go wrong...
• Our three excel in this regard, with few caveats:
– EPIC makes most of its sales from physicians who insist on
seeing the same EMR in their practices as in the hospital. Of
course, they don’t know how to spell “ERP” up in Verona…
– Meditech was one of the first vendors to offer a “Total HIS”
way back in the mid-80s when they added a full set of
financials to their robust clinicals. Only LSS’s physician EMR
and PtCT’s Home Care are interfaced “under the covers…”
– CPSI– is the absolute king of integration, not only offering a full
set of clinicals and financials (including ERP), but even
including their own Time & Attendance and PACS systems!

10. Next Week…
• So there you have it, how CPSI started
with Kenny & Denny and rose to the
top of the small-hospital market by
following these four principles.
• After completing this 30-year HIS-tory
of CPSI, we’ll next delve into a relative
newcomer in HIS ranks, but one that is
making quite a splash: NextGen
• They’re so new, I don’t know much
about the physician practice parent,
Quality Systems Inc., mainly their
Opus &Sphere HIS components, and
acquisitions of Rick Opry’sIntraNexus.
VP of Sales Christie Guthrie has
promised to help, so stay tuned next
week to see what she delivers...