69. quadra med compucare

H.I.S.-tory by Vince Ciotti

Episode #69, QuadraMed

Part 1:

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

reserved.

4th of Today’s Leading Vendors• This week we begin the 4th episode on

today’s HIS vendors: QuadraMed, whose story encompasses Compucare and HDS.- $3.2B = McKesson, née HBOC = Walt Huff, Bruce Barrington, & David Owens - $2.2B = Cerner, still run by Neal Patterson, co-founded with Cliff Illig- $1.7B (est) = Siemens, née SMS: Jim Macaleer, Harvey Wilson & Clyde Hyde- $1.4B = Allscripts, née Eclipsys, also founded by Harvey Wilson of SMS.- $1.2B = Epic. Gee, I have to wonder, just who was it who founded them? - $900M (est) - GE Healthcare, née IDX/PHAMIS: created by Malcolm Gleser- $545M = Meditech, still run after all these years by Antonino Papallardo- $353M = NextGen: new Opus & old Sphere financials by Florian Weiland - $174M = CPSI (Computer Products & Services Inc), founded by David Dye - $170M = QuadraMed, née Compucare, founded by Sheldon Dorenfest- $160M = Keane, parent giant by John Keane, but HIS div. built by Ray Paris - $110M = HMS (Healthcare Management Systems), Tom Givens & John Doss- $70M (est) = Healthland, formerly Dairyland, founded by Steve Klick

Triple Play!• This series of 3 episodes actually covers 3 HIS vendors

(Techie Troika?) that we’ll review in chronological order:– Compucare – home of Shelly Dorenfest, which we

first covered in an earlier episode (#17, which you can find at hispros.com), only this time we get the perspective of the man who took it (and other HIS firms!) on to bigger & better things: Ron Aprahamian

– QuadraMed – formed by the acquisition of over a dozen HIS firms over several decades of acquisitions, then bought itself a few years back, and the surviving name & vendor in hundreds of hospitals to this day.

– Health Data Sciences – Formed by Ralph Korpman, yes, that same Dr. Korpman who was a Pathologist at Technicon back in the days of MIS, and created UltiCare, the pioneering bedside system.

Another HIS-tory Hero!• Many thanks for this weeks inside story of the rise of Compucare

to David Pomerance, co-founder of Dynamic Control, who was kind enough to introduce me to Ron Aprahamian, for the inside story. Ron’s story begins way back in the 1969 mainframe era:– Ron joined Compucare after it had grown to about 20 FTEs in

the 1970s, but he recalls it was first founded by Peter Marsh and Richard Freibrun, then joined by Shelly from Abbot Lab.

– Shelly and Peter hardly need introductions, both having long HIS-tories, but Dick Freibrun has a fascinating background:

• He was one of the 47 charter members of HIMSS in 1961!• He developed a plastic overlay for clinicians entering data

onto IBM’s “clunky” old 1052 keyboards (which if you’ve been a good student of HIS-tory, you’ll remember was Mike Mulhall’s claim to fame at the IBM Monmouth Medical Center in NJ “HIS” project in the late 60s {see episode #8}).

Rocky Start…• Like so many start-ups, Compucare was challenged to

grow the business through sales (income), while at the same time programming and installing their HIS (expenses), and by 1975 the ratio of the 2 was not very good, with only about $500K in revenue and 30-40 FTEs.

• Ron was the FM (Facilities Management) Director for Compucare at Georgetown U. Hospital, which you may remember was the idea behind Compucare: develop an HIS through a series of FM clients writing various apps. At that time, most of their clients were mainframe users.

• With the impending minicomputer revolution, Ron got the idea to switch boxes and paid about $50K to buy out Compucare’s stock. That would be between a ¼ and 1/3 of a million in today’s dollars, a pretty gutsy gamble for 29-year old Ron way back then!

Boston Connection!• How Ron switched from mainframes to a minicomputer

platform is an incredible story that even blew my mind after being in this crazy business for 40+ years:– Rather than start from scratch, Ron turned to a little

start up in Boston that had developed a rudimentary LIS on DG minis: Medical Information Technology – ever heard of them? Try the acronym in green they used for their overly lengthy name…

– Yes, Virginia, Compucare’s first HIS apps were coded in MIIS, Meditech’s proprietary version of MUMPS, long before it was eventually renamed as Magic!

• Ron’s programmers built a full set of financial apps, patient and general accounting (ERP for moderns), to add to Meditech’s suite of ancillary systems, ADT and OE/RR. As you might imagine, Ron’s Georgetown Hospital became the pilot, and they started to sell!

Rapid Growth & IPO• Like so many turnkey mini vendors back then,

Compucare’s DG-based HIS sold well, and the firm went public in 1983, for a total stock value of ≈$40M– Not bad for a $50K investment by a 29-year old!

• As the stock grew in value, it caught the attention ofanother very successful healthcare company that was looking to buy its has into the HIS market: Baxter-Travenol, who by then had already acquired a number of mini and mainframe HIS vendors:• John Sacco’s “JS Data” (featured in HIStory episodes #26 & 27)• Mitch Lasky & Dave Pomerance’s Dynamic Control Corp. (#18)• Frank Russo’s IBM mainframe system from Long Island Jewish

• As you might imagine, Ron & the other stockholders got a pretty good price from the supply giant: the total value of the transaction being somewhere around $70M!!!

But Wait, There’s More!• I’m sure some of you CIOs are ready to

leave your hospital job and start a vendor, but believe it or not, Ron’s amazing financial prowess was only just beginning!

• Travenol renamed Compucare’s HIS the “Sigma” series and tried to sell it alongside DCC’s IBM System 38-based HIS, which sold much better…

• After several years of this internecine warfare, and after Baxter joined IBM to create IBAX, they gave up!

Guess Who, and For How Much?• So guess who IBAX sold the Sigma series back to? Our man Ron!

And for how much? So little, would you believe $7M! If you’re an old friend, email Ron at [email protected] to confirm…

• When Ron got his old firm back, he started it in a new direction, that should sound familiar after you read the last few Keane episodes on Ray Paris’ Threshold and John Indrgio’s InfostatInfostat:- An “open” system platform written

in UNIX so it could run an any mini:- IBM, Hewlett-Packard, DG, etc.

- Under these “open” covers, the programming language was still MIIS, but UNIX opened many more doors for this latest HIS: Affinity

““Code Generator”Code Generator”• Rom relayed a fascinating tech detail

about a “code generator” they wrote to write the actual programming code

• He gives credit to a techie named Jim Kline, the development Director who created it (sounds like the “translator” HIS Inc. tried to develop in Brooklyn that was described in episode 30!).

• When Affinity first went live circa 1990, response times were slow, and they had to re-do a lot of the code to speed things up. “Re-writing by hand would have taken forever,” per Jim Kline, and his code generator saved the day!

Ron’s Final Sale of Compucare• By the late-90s, Compucare had sold

over 100 Affinity systems, and the company was fast approaching the $100M mark in annual revenue.

• Ron left in 1996, by which time Compucare had become quite a hot commodity, again! This time the buyer was the star of our next HIS-tory episode: QuadraMed, who acquired many firms & runs Affinity in scores of hospitals to this very day.– Tune in next week for their story…

• And what happened to Ron after he left Compucare? True to form, he started looking for “green” pastures…

Retirement? This Guy??• After he left Compucare, Ron was Chairman of the Board of

CHIME until 1999, and came a little close to retirement, serving as a consultant to Sunrise Senior Living, Inc. for a few years.

• However, you can’t keep a good HIS man down, and in 2000, Ron became Chairman of the Board of Superior Consulting Corp., during which time he organized a turnaround of this struggling firm. In 2003, Superior was acquired by Affiliated Computer Services (ACS), who were themselves later acquired by Xerox.

• After Superior, Rom took his expertise to another struggling consulting firm: First Consulting Corp., turning its shares around from $5 to $13, before they were eventually acquired by CSC.

• What’s he doing today? Besides golf 5 days a week, he is a director at a healthcare firm named Hooper Holmes, Inc., along with Larry Ferguson, another HIS pioneer from SAI (Saint).– You just can’t keep these HIS-tory heroes down!

Most Proud Accomplishment• Ron gives credit for the success of Compucare was given to al the

hard-working employees who did the day-to-day heavy lifting.• But his most proud achievement is pictured below:

– Two sons and one daughter, all married, and with 8 grand kids!

Next Week: QuadraMed• Next week we continue the saga

of Affinity with its new owner QuadraMed, who along the way acquired over a dozen other HIS firms, each its own fascinating HIS-tory in themselves. Their latest acquisition a few years ago will lead us to UltiCare…

• And in case you missed any prior episodes of our HIS-tory series (or want to check out where your HIS vendor originally got their stuff), just hop on over to our web site and enjoy any past episode at: HISPros.com