“H.I.S.-tory”by Vince Ciotti

© 2011 H.I.S. Professionals, LLC

Episode # 32:

HIS, Inc.

Part 3 REBORN!

So Who Shot John?(er, rather, HIS Inc…)

• Last week we got to the point where the original HIS Inc. was hurting, due to the same problems that plague many new products (think Paragon in 1996 or Soarian in 1998 – a decade before being finished!):– Late programming – no matter how many and how

bright, programmers always deliver late…– Bits & pieces – when code finally comes, it’s in a

series of releases and modules spread over years…– Frustrated clients warn prospective buyers not to

fall for the same story they bought…– Worst – they hold back payments! No matter what

the contract says, at some point, they stop writing checks and cash flow at the vendor shrivels…

Change At The Top• Like a true scumbag, I saw the handwriting on the wall and bailed

out early, just not up to the challenge of all these obstacles.– Sales was just not my thing – marketing, yes, but closing deals,

no. So I joined Sheldon I. Dorenfest & Associates (SIDA) and found my niche in HIS consulting, learning from the master!

• Who took over after I left? Another irony in the HIS world, the same guy who seemed to be dogging my feet at both SMS and McAuto, and an earlier HIS-tory Hero from Gerber/Brehm:

Bill Brehm! Bill Brehm! - One of the nicest, hardest-working and

smartest guys in the business with an amazing track record of over 30 years.

So Close!• Under Bill’s tutelage, HIS Inc. made even

greater strides, as more PL/1 code was translated, and modules completed.

• HIS Inc. even started work on a clinical suite to compliment their excellent financials…

• But even Bill’s talent and leadership couldn’t overcome the greatest challenge: Wall St.!

• Like Sentry Data in Chicago, HIS Inc was publically held, and their stock rode the bull/bear roller coaster (sound familiar today?)

• Prospects got nervous as the stock wavered, investors got nervous as sales declined…

• The sad denouement: in 1987 HIS Inc. declared bankruptcy under Chapter VII.

A Phoenix Rises!• George Weinberger just would not give up, however,

and he went to the bankruptcy auction and acquired the PL/1 software at a bargain price – who else would bid?

• Corralling together the same group of Brooklyn-ites who had started HIS Inc. in 1978, he tried again in 1988!

- Heshie, Gershon, Bert, Dale, Izzie, etc.• To disassociate themselves from the old firm, they

named their company “American Healthware” and wisely concentrated in the NYC market only, forgetting dreams of national prominence.

• To reinforce the fact that the product was finally completed this time, they named it “Eagle” and launched an ad campaign claiming:• “The Eagle Has Landed!”

Third Time’s a Charm!• Heading up sales & marketing this time around was Joe

Smith, with decades of experience in HIS at:– Continental, McAuto and Systems Associates (SAI)

• Hard work and chutzpah finally paid off as one large medical center in NYC after another bought Eagle due to its ability to handle NYC’s challenging third-party regulatory environment.– Remember, no “Uniform Billing” (that great oxymoron) back

then – it was every intermediary for themselves, and both NY City and NY State made IP & OP billing a nightmare!

– The boys from Brooklyn mastered it superbly, having one state to master, leaving the other 49 to other HIS vendors.

• Their client list read like the “who’s who” in NYC:– Montefiore Hospital, NYU Medical Center, Columbia-

Presbyterian, St. Lukes-Roosevelt, Mt. Sinai, etc, etc.

Forethought! • Joe’s team came up with this amazing ad – first time anyone ever used the phrase “2000” for an HIS product, about a decade before it became de rigueur in HIS circles circa Y2K.

• Eagle sold so well in NYC even beat SMS’ superb sales machine often in the large hospital NYC market so close to Malvern...

• So what did SMS do?

If You Can’t Beat ‘em, Buy ‘em!• Just before being bought itself by Siemens, in 1997, SMS bought

American Healthware for, are you ready? Remember:– The firm went bankrupt as HIS Inc., in 1987…– Bill Brehm & I could not quite make it work…– George bought the code at a Chapter VII auction…

• So how much money did George get from SMS for American Healthware just 10 years later? Read the press release yourself:– “Malvern-based Shared Medical Systems Corp. has acquired American

Healthware Systems Inc. of Brooklyn, N.Y., in a stock deal valued at about $68.91 million$68.91 million. American Healthware provides financial information systems and outsourcing services to 21 of the largest hospitals in New York. Shared Medical, a $767 million provider of health information systems, will buy American Healthware in exchange for 1.25 million shares of SMS stock.”

• So there you have it: a mini system morphed into a mainframe!– To this day, the “Eagle” PL/1 software still runs in dozens of NY

hospitals under the Siemens banner – an amazing HIS-tory!