IDX acquired PHAMIS, one of the most famous and robust clinical systems vendors, in 1997 for $147 million. PHAMIS was co-founded by two physicians to create an electronic medical record system called PHAMIS for the U.S. Public Health Service to allow patient charts to be shared across multiple facilities. Built on the reliable Tandem platform, PHAMIS experienced rapid growth and had over 300 employees and 40 large health system clients by the time of its acquisition by IDX. The acquisition made IDX a full-service healthcare IT vendor providing both clinical and financial systems.

1. H.I.S.-tory
by Vince Ciotti
Episode #90: GE
Healthcare
Part 3
© 2013 by H.I.S. Professionals, LLC, all rights reserved.

2. IDX Buys Into The Hospital Market
• No, I didn’t screw up and place that graphic upside down – it was
as brilliant an ad as the firm IDX acquired to get into the HIS market
• You may remember we left off last week with IDX going public in
1995, when they were primarily a physician billing company, with
only a few hospital apps, like HPA (Hospital Patient Accounting).
• So with deep pockets from their IPO, IDX went looking for a
hospital clinical system to make them a total HIS vendor. Who did
they buy? Easily one of the most famous HIS vendors ever, and one
whose product was the last word in clinical systems at the time, co-
founded by two “doctors,” one an MD the other a Ph.D. and MD:
– Dr. Mark F. Wheeler, MD, M.P.H., a practicing physician, and
– Malcolm A. Gleser, MD, and with a Ph.D. in Biomathematics.
• They worked for the U.S. Public Health Service (USPHS) in Seattle,
WA, which continue our trend of northern roots for so many HIS
pioneers – not as cold as Vermont, but far more precipitation!

3. Sailors’ Charts
• When Wheeler &Gleser joined USPHS in the
’70s, it was serving mainly American seamen
and Department of Defense personnel.
• This highly mobile population provided the ideal venue for creating
an electronic chart that would follow them around western ports.
• Strange how in their efforts to build an electronic chart for sailors,
Wheeler and Gleser found two aircraft manufacturers in those early
days who were also pioneering systems that automatedcharts:
• Lockheed-Martin’s “MIS” – running on IBM 360 mainframes
• Martin-Marietta – who were using Tandem “Non-Stop” systems
• Back in those DOS/MVS days when a system
crash could take days to recover from, the
appeal of having two CPUs, two disk drives,
etc., working in tandem offered a far more
reliable platform for an electronic chart whose
reliability could adversely impact patient care

4. Working in Parallel
• So the doctors decided to follow Martin-Marietta’s lead
and build their system on Tandem Non-Stop computers,
as explained below by Dr. Wheeler in an early article:
“The NonStop platform was what allowed Martin to win. The
total system life cost was lower, because we could add processors
as needed. We really felt that the NonStop platform was optimal
for our kind of work, and we still feel that way today.”
• Per the paper below, the USPHS operated 9 hospitals and 26 clinics, so
the e-chart had to enable a given patient’s chart to be shared among
many entities, much like the RHIO/HIE/interoperable world of today.

5. Famous Product Name
• So what to call this new system? How about “Public Health
Automated Medical Information System” or PHAMIS for short. It
was extremely robust, with modules that rival today’s HISes, viz:
– Scheduling, ADT, Order Entry, Results Reporting, Medical Alerts,
Pharmacy, Laboratory, Radiologic reports, Problem Lists, etc.
• In the early 80s, Wheeler &Gleser formed their own company
under the same PHAMIS name to offer the system to non-USPHS
facilities. Thanks to their physician-friendly design, robust app
portfolio and reliable Tandem platform, it sold well to sites like:
– Mayo Clinic (Minn), Thomas Jefferson (PA), Montefiore(NY)…
• PHAMIS next came up with a name to
separate the company from the product,
which they felt was easily the last word in
electronic medical records of the time:

6. Want
ads
from
Phamis
20
years
ago;
sadly,
no $s
were
given.
What
were
you
doing
back
then?

7. Rapid Growth
• PHAMIS rode the wave of the
tidal shift in the HIS industry
from financial to clinical
systems during the 80s & 90s.
• As the chart below shows,
revenues grew well, and by
1995, PHAMIS had over 300
employees, 40+ large IDN
clients, and had gone public.

8. Cross Country Acquisition
• On a deal that benefitted airline stocks (both offices were kept
open), IDX from Burlington VT acquired PHAMIS in Seattle in a
stock swap valued at $147M. The gory details of the 1997 deal:
– “Under the agreement, Phamis shareholders would receive 0.73 share of
IDX common stock for each of their shares. Based on IDX's closing price
yesterday of $31.75, the transaction is valued at $23.18 a share. Phamis
had 6.35 million shares outstanding as of Dec. 31. Shares of Phamis, based
in Seattle, were up $3.375, to $22.25, before trading was halted.”
• IDX re-named LastWord as “CareCast,” and started selling its
“integrated” array of physician and other hospital systems,
making them a target for the next big takeover themselves…
• Next week we’ll
wrap up the GE
saga, adding
many more bars
to this timeline!