H.I.S.-tory by Vince Ciotti

Episode #76:

CPSIPart 1

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

5th of Today’s Leading Vendors• This week we begin the 5th episode on today’s

HIS vendors: CPSI, whose 2011 annual revenue has recently passed both QuadraMed & Keane:- $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, founded by M. Kenny Muscat & Denny P. Wilkins (who??) - $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

CPSI• So how did you do on last week’s test –

just what do the letters CPSI stand for?• I must confess, I never knew for years

until someone finally revealed it:- Computer Programs and Systems, Inc.

• And their roots are as fascinating as that swimsuit picture, which by the way, is one of the few ads they ever ran, from way back in their early days in the 80s. – I couldn’t find a single CPSI ad in my

archives of Computers in Healthcare, nor in any current HIS magazines!?

– As you’ll learn, this is a very different company than most HIS vendors…

Many Thanks to…• So where did I get these JPEG gems from? An old friend, and one

of their very first employees (actually, # 5 from way back in 1980):– Scott Schneider – VP of Sales for over 10 years and now EVP

• To show you just how smart Scott is, he gave me most of the embarrassing pictures you’ll be seeing of the original founders of the firm, but of course none of himself…

• Scott and current CFO, David Dye, pictured on the right when he was CEO (amazingly young, huh?), were kind enough to relay the full HIS-tory of this fascinating vendor that actually has much in common with HIS giants Meditech and Epic!

• You don’t believe me? Well, hang on to your mouse as we tell the tail

Original Founders• CPSI was founded back in 1979 by the duo of “Denny & Kenny,”

childhood friends from the Mobile, AL area, who both left their jobs in that year to form CPSI; Denny’s backgrounds is amazing:

• Denny P. Wilkins - got his B.S. in physics from the University of Notre Dame and holds both an M.S. and a Ph.D. in high energy physics from Florida State University. He served in the U.S. Army for four years, first teaching at the Command and General Staff College at Ft. Leavenworth, and later doing research at the Army's Harry Diamond Laboratory near Washington D.C. No jokes about “rocket science,” this kid rocked!

2nd Founder, and his Uncle…• Denny’s buddy Kenny had a more traditional

HIS background (as well as business portrait:)– M. Kenny Muscat – was the D.P. Manager

at the Mobile Infirmary, a giant 700-bed facility in Mobile with the typical large inhouse DP shop in those days and a large, self-developing programming staff.

• Turns out Kenny had an uncle who needed financial system software for an NCR minicomputer he had at his firm. Kenny had deep experience with financial systems from the Infirmary, as that is usually what most inhouse shops started developing back then…

• His childhood buddy Denny was interested in leaving academia and getting into the business world, so the two formed CPSI to write financial systems for an NCR mini, hiring 3 programmers Kenny knew from the Infirmary.

NCR?• Now what did the National Cash Register company have to do

with minicomputers, you might ask? Well, NCR was the original home of Thomas Watson of later IBM fame, and a leader in the mainframe BUNCH Group that chased IBM into minis in the 70s.

• And what powerful machines they were back in those days! Scott Schneider remembers some of their CPUs had 10 whole Megs!– (eyes off the skirts, guys - this was the era of minis!)

NCR 299 Mini NCR 399 Mini NCR 8250 Mini

Looking for an NCR Sales Rep…• CPSI’s software pleased Denny’s Uncle so much that word spread

to other facilities in AL with NCR minis, including hospitals, who also were primarily automating financial systems back then.

• So if you’re forming a firm that’s writing software for NCR minis, who do you look for to head up your sales effort?

• You guessed it, Denny & Kenny recruited the NCR sales rep who had also sold an NCR mini to their first hospital client: – Thomas Hospital in Fairhope, AL, who ran CPSI’s software for

almost 40 years until they were recently acquired by, guess?– The Mobile Infirmary – the same place Kenny started out at!

• Now don’t even ask me what HIS they’re being converted to

– I’ll give you a hint: the Mobile Infirmary is very large… – And who might that NCR rep have been? Stay tuned ‘til next

week as we continue the inside story of this small-hospital giant