H.I.S.-tory episode #116 provides a recap of HBOC's evolution through the 1980s and early 1990s via mergers and acquisitions that positioned it as the top healthcare information systems vendor, surpassing former leader SMS. In 1994, HBOC acquired IBAX, formed from previous mergers including DCC and JS Data, making HBOC the dominant vendor across large, medium, and small hospitals. HBOC re-branded IBAX's competing product lines as "Series" systems to integrate them. The episode teases an upcoming discussion of HBOC's second mega-merger in the 1990s involving a small HIS vendor and two large corporations that tried but failed

1. H.I.S.-tory
by Vince Ciotti
Episode #116:
McKesson
Part 5 = IBAX
© 2013 by H.I.S. Professionals, LLC, all rights reserved.

2. 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 vaultedHBOC
into the top of the HIS market, ahead of former #1 SMS.

3. 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.

4. 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:

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

6. “I Hoid It Through The Grapevine…”
• If you put these slides on fullscreen 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’sCEO 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!

7. 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’sOmega (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’sDelta (DCC on AS/400s, later re-named Series 3000).
– Small (under 100 beds) – which generally included in their
searches IBAX’sAlpha (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?

8. Banana FannaFo 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

9. 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…

10. 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:
+
but<
>
,
!
• 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
vciotti@hispros.com