116. mc k part 5 hbo

H.I.S.-tory

by Vince Ciotti

© 2013 by H.I.S. Professionals, LLC, all rights reserved.

Episode #116:

McKessonPart 5 = IBAX

Recapitulation• My many mergers of mighty MedPro might mentor migraines

(mmmm…), so here’s a recap of HBO’s evolution up to 1990:

• Next, we cover two mega-mergers in the 1990s that vaulted HBOC into the top of the HIS market, ahead of former #1 SMS.

HBOC’s Product Line in Late 80s

• These ads nicely illustrate how HBOC had merged the MDC, Amherst & Medicus systems into their diverse product line by the end of the 1980s.

Mega-Merger Maven• Walt Huff retired in 1989, and in his own words: “Holcomb Green

became Chairman, Darrell Young president of HBO (minicomputer division), Robert Murrie President of MEDILEX (IBM/FM), & Larry Gerdes, President of the Equipment Maintenance Subsidiary).”

• In 1991, Holcomb Green appointed a single president over all 3 subsidiaries, who eventually became chairman: Charlie McCall.

• McCall was no stranger to IT : from 1985 to 1991, he was CEO of CompuServe. He engineered two deals for HBOC in the mid-90s that put them in first place in the HIS industry, ahead of SMS, former #1 in annual revenue. The first acquisition in 1994:

IBAX (IBM and Baxter)• The roots of IBAX are also a

complicated web of mergers, so hold onto your track-pad as we cover them briefly here (you can view their full episodes on our web site hispros.com):– 18 = DCC (Dynamic Control)– 26 & 27 = JS Data

Plus one I did not do a episode on: Stonybrook Systems, an IBM mainframe vendor out of Long Island, who’s CEO Frank Russo became IBAX’s CEO.

• HBOC’s “official” story on the merger is interesting reading:

“I Hoid It Through The Grapevine…”

• If you put these slides on full-screen display (and you’re not trying reading this on a tiny iPhone…), Jeff Goodman’s inside tale is echoed here in a great interview by Bill Childs of IBAX’s CEO Frank Russo about acquisition rumors in 1989.

• The take-way for today if you’re embarking on a system search?– Even CEOs don’t know when

their Boards are being approached for takeovers,

– So look at the product a lot more than the company!

Sibling Rivalry?• This acquisition was somewhat challenging in that IBAX was a

major competitor to HBOC in all three hospital market segments:– Large (≈300 beds and up) – which usually considered IBM

mainframe systems like IBAX’s Omega (IBM PCS/ADS-based mainframe system, later re-named Series 5000 when Baxter became IBAX) vs. HBOC’s Medipac (from Medicus/Mediflex).

– Medium (100 to 300 beds) – which often compared HBOC’s ClinStar and Star Financials (by now running on DG minis) to IBAX’s Delta (DCC on AS/400s, later re-named Series 3000).

– Small (under 100 beds) – which generally included in their searches IBAX’s Alpha (JS Data, later re-named Series 2000) vs. HBOC’s Galaxy (still on 4φ minis, eventually sunset…).

• So what would you do if you were HBOC and you inherited these three competing systems and had to pick one to answer an RFP?

Banana Fanna Fo Farley…• Why, re-name them of course! The first step in any acquisition is

to “integrate” all the ads, brochures, PowerPoints and proposals with new names for the many products on diverse platforms, and HBOC followed this marketing rule assiduously as follows:– Series 5000 joined MediPac and CliniPac, and even the NSA’s

2013 sleuths might not figure out just which COBOL/VSAM/MVS code came from where over subsequent releases…

– Series 4000 (DCC) and 3000 (JS Data) were similarly merged into a single systems called “Series,” probably containing more of DCC’s RPG code than JS Data’s, although again who knows?

• Series still run in hundreds of hospitals today, although mostly its financial apps as its clinical system can hardly be “meaningfully used.” MediPac & CliniPac eventually became HealthQuest, which became “HERM” before the sun set on that part of the horizon…

1991 Paragon Ad?• Anyone who follows McKesson

today should get a good laugh at this ad from 1991 that illustrates how marketers are sometimes many years ahead of the programmers in development…

• It seems HBOC tried the name “Paragon” for their “MCA” EIS and Cost Accounting systems, which they had acquired from Amherst & Medicus. The name never stuck, but was “re-cycled” in the late 90s when today’s Paragon HIS system was born…

Next Week…• We’ll cover the second of Charlie’s mega-merges that put HBOC

at the top of the HIS industry, this one involving one of smallest HIS vendors that targeted mainly small hospitals under 100 beds, and two of the largest firms in corporate America who both tried and eventually failed to be as big in HIS as they were in other fields. In visual symbols & algebraic notation, the story goes like this:

• Stay tuned for the gory details, and if you were an insider within these firms during the halcyon 1990s, gimmee a call or email:- 505/466-4958 [email protected]

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