H.I.S.-tory by Vince Ciotti

Episode #19:

“Keen” on

© 2011 by H.I.S. Professionals, LLC

But first…• Perspective on where we are in the 3rd decade of our HIS-tory:

– 1960s = Mainframes, 1970s = Shared Systems, 1980s = Turnkey Minis

• Hard for we moderns to remember back when hardware dictated the HIS system, since servers are so up in the “cloud” these days…

• Turnkey minis were absolutely taking over the industry by the late 70s, from shared giants SMS & McAuto, who also offered minis.

• A turnkey mini system even made the cover of Modern Healthcare’s October 1978 issue, featuring Methodist Hospital of Indiana:

“Some hospitals are finding they don’t have to change the way they operate to accommodate a newly installed, commercial, computerized medical information system – they can make it fit their routines.”

One Man’s Story• The story of Keane actually does not begin with John

Keane, who formed the firm in the 60s to work in many industries, just like McAuto’s GSD (General Services Division) presaged its HSD (Health Services Division).

• John Keane’s Boston-based eponymous firm sold IT services to anyone, e.g., they helped manned the 800 lines for MicroSoft’s “Windows 95” GUI in 1995…

• The story of Keane’s HIS is the story of another man:- Ray Paris, one of the early HIS pioneers

whose career both before and after creating Keane’s HSD is a mini “HIS-tory” in itself!

- Many thanks to Ray for taking time off his busy retired golfer schedule to relay this tale!

McAuto Roots• Like so many HIS pioneers, Ray cut his HIS teeth at

McAuto in the early 70s, where he met notables like:– Walt Huff, who interviewed Ray, but left to form HBO– Ron Johnson, vendor guru and early McAuto sales rep– Jim Navin, another early Mac maven (before Hafty…)

• Ray was hired in 1972 and started work at McAuto’s posh offices in NYC’s Chrysler building.

• Contrast it to SMS’s first NYC area office in the former water company building in glamorous Woodbridge, NJ:

Early Sales Successes• Ray remembers getting a harassing phone call from SMS’

NY rep, Dick Davis, who promised to eat Ray’s lunch…– (as you’ll see with Ray’s success, it was just a few crumbs!)

• Ray started selling McAuto’s HFC aggressively, winning a

huge NJ account: Hackensack Medical Center• One of McAuto’s largest account at

the time, 500+ bed Hackensack has since gone on to be a (too) “early adopter” of Siemens Soarian, and recently took an Epic plunge…

• McAuto’s sales manager Ron Johnson tried to keep this sales superstar in the fold, but…

Ray Listens to “FM”• In 1976, Ray left McAuto to join Ray Kern’s Innovations

in Technology, the pioneering Facilities Management (FM) firm, John Indrigo told us about just last week.

• The FM concept sold well back in those self-development days, when inhouse mainframe projects seemed to take forever, and hospital management was eager for a “white knight” to come over the horizon…

• Paris became Ray Kern’s sales maven, building up the firm to where it caught the eye of John Keane in Boston.

• John Keane acquired Innovations and Ray Paris, became VP of their new HSD division, which he headquartered in Melville, “Lon Gisland”

(that’s how it’s pronounced in NY!)

Turnkey Turncoat• Keane kept selling FM at first, but gradually realized that

turnkey minis were sweeping the field in the late 70s.• Following the market’s preference (prejudice?), they

first considered a mini system on an IBM System 3,• Before hearing about a pioneering (1950s) computer

manufacturer in Mass., headed by founder An Wang.• Wang first made calculators, the rage in the

60s, then made minicomputers in the 70s.• Word Processing became their hot niche, in

this era of typewriters and carbon paper.• Keane realized the power of Wang’s CPU,

and used it to build their mini-based HIS.

A Rose By Any Other Name…• The name “Wang” caused quite a few snickers in buying

circles at first, compared to the fame & clout of Big Blue• Keane’s development maven, Ray Gottleib, jumped on

Wang’s powerful Model VS80 with intelligent terminals, to build their mini-based HIS system, sold first as an FM.

• The price/performance was so good, however, 30 were sold as turnkey systems, ending Keane’s FM approach.

• Eventually, the IBM name & dominance won over, and Keane offered HIS systems on IBM Sys 3 and 34 minis.

• In the 80s, Keane tried an early UNIX-based system called “Threshold,” that was hardware independent, but the R&D proved difficult to complete…

A Choir of Acquires…• Keane grew rapidly in the 80s through a series of

acquisitions, just like competitor HBO was doing.• All told, Keane acquired 13 HIS vendors, including:

– Pentamation – a Maryland-based firm, who had recently been acquired by Ferranti from Italy

• (the first of many forays by multi-nationals into US’ HIS)

– Their “Leadership Series” mini system was a hot in acute care, along with a surprising successful niche:

• Long Term Care systems, in which Ferranti/Pentamation had become a market leader. Although low in individual system price, eventually, Keane would become dominant in this specialty market with about 4,000 clients!

Other Acquisitions• Some of the 13 firms Keane gobbled up over the years, each of which could be its own mini-“HIS-tory,” include:

– Source Data Systems (ex-NCR MedNet)– Executive Data Systems, Cedar Rapids– Community Health Computing– Infostat (UNIX on AT&T hardware)– LabFusion – stellar LIS niche player– Etc., etc., etc…– We’ll delve into two of Keane’s most long-lived acquisitions:

• First Coast – an IBM mini-based turnkey system formed by Charles Gibbs in Jacksonville, with about a hundred clients…– Renamed (surprised?) as “InSight,” with a full suite of financial & clinical apps running today in ≈50 hospitals

AMI/PHS(Sorry for the acronyms, but this is the HIS industry, right?)• AMI = American Medical International, a chain of

proprietary hospitals HQ-ed in LA, that competed with other multis of those days like AAM (PA) and HAI (TN)– AMI tried to gain a competitive advantage by building its own

DG-based HIS, using its owned facilities for R&D input/pilots.– Their HIS subsidiary was “Professional Hospital Services,” that

built an HIS called “Pat-Com,” with superb Patient Accounting…• Still runs today in Johns Hopkins!

- Many ex-SMS alumni populated PHS:- Rich Haynes, PHS’ founder & CEO- Art Harris – who started at AHS’ ISD- Rich LaBelle – from my Ed. Dept.- Arnie Caplan, ex-SMS ID Mgr, and

one of the nicest guys in HIS-tory…

Merger-Mania: Mangia!• Keane bought so many competing systems, it is only fair

that eventually they got bought themselves, twice!• First time was by Caritor, in 2007 for $845M, an IT firm

that made it’s fame outsourcing development to India…• Who sold Keane next to NTT NTT (Nippon Telephone &

Telegraph) in 2010 for $1.2B (nice profit in 3 years!)• Today, Keane still dominates the LTC market with their

– “NetSolutions,” descendant of Ferranti/Pentamation• In the HIS space, they offer:

- “Optimum” – a combo of Pat-Com’s superb RCM, and

- “iMed” – Keane’s home-grown E.H.R. (not acquired!)