H.I.S.-tory by Vince Ciotti

Episode #82: NextGen Part 4

© 2012 by H.I.S. Professionals, LLC, all rights reserved.

The “next” acquisition:

Final Episode of NextGen• Probably not the end of their acquisitions, but the last part in our

saga of where their present-day HIS product offerings came from.• This story goes way back in the late 70s, when minicomputer HIS

systems started challenging the dominant shared systems like SMS, McAuto & Tymshare. In Oakland, CA, an ex-IBM sales rep named Tom Culligan started his mini firm: Computer Synergy,whose HIS ran on DEC’s line of “VAX” minicomputers, easily the 2nd most popular box after IBM’s System 34, 36 and 38.

• Like leading competitors Dynamic Control, Meditech, HBO, etc., Computer Synergy gradually developed a complete HIS, with all core financial and clinical systems, at a price that competed well in terms of TCO with then-dominant shared systems like SMS & McAuto.

If you can’t beat ‘em…

• Per this table from one of Sheldon Dorenfest’s early “Guides,” Computer Synergy was growing rapidly when it caught the eye of SMS, who had already entered the mini market with their ACTIon line that ran on both Four Phase & DEC VAX boxes.

That’s the Spirit!• Having started it’s “ACTIon”

line through a marketing agreement for HBO’s pioneering MedPro, SMS was no stranger to acquisitions and in 1985, they struck a deal with Tom to acquire his firm. SMS’ marketing department came up with the name “Spirit,” as shown in this ad from 1987. Under the covers, Spirit was actually comprised of SMS’ own DEC ACTIon clinicals “front-ending” Computer Synergy’s financials...

An Odd Couple…

• Initially, SMS’ superb sales team sold Spirit (also known as “The Spirit Choice”) very well as usual. However, the two systems were very different in appearance and architecture, as early clients learned to their chagrin… So after a few years, SMS reverted to the original all-Synergy product, with another

superb name: Allegra!

Y2K “Apocalypse”• Over the next decade, from 1988 to 1998, SMS

almost 200 hospitals on the Allegra mini system, until an event on the horizon raised fears throughout the IT world in the 90s: Y2K! Hard to remember back then how all of we IT “experts” feared the collapse of our e-world…

• It is so comforting to realize today that we have become so much smarter: there is just no way our modern, enlightened society would ever give any credence to such scare stories about the end of the world due to inexplicable occurrences…

• In the HIS world of the late ‘90s, vendors faced the daunting of re-writing millions of lines of code to expand any MM/DD/YY dates to be MM/DD/YYYY, and programs could read the 2 extra digits...

Too Many Products…• Like many vendors back then, SMS had

too many products to fit in the lifeboat:– Independence – inhouse mainframe– Exact – an ACTIon front-end to their shared financial system– Signature - a physician billing systems for reg., sched. & 1500s– MedSeries 4 – an IBM mini system they had acquired from GTE

• Indeed, this last system was the challenge in that being IBM-based, it sold better than Allegra and they were direct competitors!?

• So, SMS did what any company would do in such a situation, it made a tough but correct business decision, and notified clients of Allegra that it would no longer be supported after Y2K, and proceeded to sell them on one of their many other products…

• Aren’t we lucky none of today’s vendors have too many products to support with threats like ICD-10 looming on the Horizon…

To The Rescue!• One of SMS’ Allegra clients was Virginia Beach General

Hospital, that had a user department head named Rick Opry who had mastered Computer Synergy so well that he left and formed his own computer company in 92:

• Opry Consulting, which picked up so many Allegra clients (about 75 all told), he started writing a series of new “Sapphire” web-based apps for them programmed in modern Ruby & Java.

• In 2001, Rick formally purchased rights to the Allegra software from SMS, and re-named his company: “IntraNexus” which grew to over 100 employees based in Rick’s home town of Virginia Beach.

• Besides core Sapphire apps, IntraNexus had many partners for ancillary systems: MetaHealth’s HIM, ORMED ERP, SCC for LIS, etc.

The Next Acquisition• IntraNexus tried for about

10 years to break into the big time, but had a hard time finding the right niche in the HIS nexus. Here’s Rick & his sales team at our HIS Buyers Seminars in Vegas:

• And then, voila!“VIRGINIA BEACH, VA --- April 1, 2011 --- Quality Systems Inc. (NasdaqGS: QSII) entered into an asset purchase agreement to acquire IntraNexus, Inc. for $4.9 million on April 1, 2011. The purchase price consisted of cash consideration of $3.3 million plus additional contingent consideration to be made over a three year period, not to exceed $1.7 million.”

The “LastGen!?”• So there you have it, the full HIS-tory of where NextGen got their

complete product line, acquisition by acquisition by acquisition…• The next episode promises to be a breath of fresh air as we delve

into the origins of today’s leading vendor in terms of longevity (both of the firm & leadership) and market share: Meditech!,that never acquired a single total HIS competitor in its 40+ years!

• With over 2,000 hospital clients world-wide, this will be a fascinating story, delving into the HIS-tory of all 3 core products: Magic, Client/Server, and Release 6:

• Indeed, Meditech’s story is so deep & fascinating, I’m asking any old Boston vets out there to share their inside stories/pics at: vciotti@hispros.com

• And if you’re a really old HIS veteran who prefers a live human voice to a keyboard, feel free to call me any time at: 505/466-4958