Medical Information Technology Inc.

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Medical Information Technology Inc.

MEDITECH Circle
Westwood, Massachusetts 02090-1542
U.S.A.
Telephone: (781) 821-3000
Fax: (781) 821-2199
Web site: http://www.meditech.com

Private Company
Incorporated: 1969
Employees: 2,000
Sales: $271 million (2003)
NAIC: 511210 Software Publishers; 541511 Custom Computer Programming Services

Headquartered in Westwood, Massachusetts, Medical Information Technology Inc. (MEDITECH) is a leading developer of healthcare information system (HCIS) software. Serving more than 1,800 healthcare organizations worldwide from five company-owned facilities in Massachusetts, MEDITECH's principal geographic markets include the United States, Canada, the United Kingdom, and South Africa. In addition to its primary market of acute care hospitals, MEDITECH also serves home healthcare agencies, large healthcare systems, physician offices, and clinics. MEDITECH's HCIS is available on two platforms: a client/server-based Microsoft Windows setup, or the company's proprietary MAGIC operating system. Striving to address virtually every portion of the healthcare spectrum, the company's HCIS modules help clients handle such functions as billing, payroll, decision support, materials management, and staffing and scheduling. On the clinical side, MEDITECH's system manages health information in such patient care areas as registration, radiology, ambulatory, pharmacy, laboratory, emergency, operating room, medical records, and physician practice management. The MEDITECH HCIS also includes information technology management functions related to patient and staff Internet access, as well as data archiving and integrated communications. In making its software systems available to clients, MEDITECH maintains partnerships with IBM, Dell, Patient Care Technologies Inc., and LSS Data Systems, among others. MEDITECH also offers flexible lease financing options to its customers via Captech Funding Corporation.

Making MUMPS: 1966–69

MEDITECH's origins are rooted in a programming language called MUMPS, which is short for Massachusetts General Hospital Utility Multi-Programming System. Later known as M, the language was developed in 1966 at Massachusetts General Hospital's Lab of Computer Science (LCS). The LCS was established by Guy Octo Barnett, a Harvard-trained cardiologist hired to oversee Massachusetts General's Hospital Computer Project.

The Hospital Computer Project involved an early PDP1 computer with one of the very first time-sharing systems. Instead of monitor screens, the computer initially output data onto paper via a KSR teletype. According to Dr. Robert A. Greenes, in the Journal of the American Medical Informatics Assocation, "Octo headed a very dynamic laboratory in those days of the late 1960s, with new projects underway to automate much of the hospital's activities, including ADT, the clinical laboratory, pharmacy, radiology, and other functions." Greenes further explained, "The design and programming of this system represents one of the first comprehensive hospital information systems using modular definition as the specification paradigm."

The development of MUMPS was funded through a contract with the National Institute of Health, and by a grant from the National Center for Health Services Research and Development. With Barnett serving as the principal investigator, Greenes contributed some of the programming language. However, the lion's share of the code was developed by two project engineers: A. Neil Pappalardo and Curtis Marble. When MUMPS became commercially available in 1969, Greenes established Automated Health Systems and Pappalardo founded MEDITECH in Cambridge, Massachusetts.

Pioneering Medical Informatics: 1969–89

On the company's web site Pappalardo later summarized the manner in which his new enterprise blazed a trail into the emerging world of healthcare informatics, remarking: "In the beginning, we had no great and far reaching plan. Each event, every decision, a success here, a mistake there, would take us another step forward."

Early developments at MEDITECH included the company's first customer, the Hyannis, Massachusetts-based Cape Cod Hospital, as well as the MEDITECH Interpretive Information System Language (MIIS), which was introduced in 1970. Although they were closed a few years later, in 1972 the company opened two regional offices in the western United States and one in the Midwest. The following year, MEDITECH developed an information system for the New York City Criminal Justice Department.

During the early 1970s, MEDITECH assembled what would later prove one of the industry's most stable management teams, in terms of permanence and longevity. The company's very first employee, Larry Polimeno, eventually became vice-chairman. Other early employees included eventual Senior Sales and Marketing Vice-President Ed Pisinski; Howard Messing, who rose to the position of president and chief operating officer; and one-day CFO Barbara Manzolillo. Roberta Grigg, who later served as senior vice-president of MEDITECH's international operations before retiring in 2001, was another staffer who joined the company at this time.

During the second half of the 1970s, MEDITECH furthered the evolution of its technology. In 1976 the company released the first MIIS Standard and started development on financial and patient care modules for its HCIS. A number of pioneering installations followed, including the first MIIS LIS at Seattle's Swedish Hospital in 1977; a redundant dual-processor system at Hartford, Connecticut-based Mt. Sinai in 1978; and the installation of MIIS Standard on an IBM Series 1 Minicomputer in 1979. That same year, a new facility was erected in Cambridge, Massachusetts, and a new client was gained when the Hong Kong Telephone Company installed MEDITECH's MIIS Inquiry System.

As MEDITECH's customer base grew, so did the need for users to meet and share information. This was evident when some 70 users convened in Boston in 1981. Two years later, a handful of MEDITECH users met to talk about issues regarding the HCIS and decided that a formal, standing users group was needed. This led to the formation of the Medical Users Software Exchange (MUSE). According to the group, MUSE supported "healthcare organizations using MEDITECH developed software and technologies, by providing a user-driven networking environment conducive to learning—where ideas are exchanged and information is shared so that our members can continually improve organizational performance." Led by volunteers, MUSE began hosting an international conference every spring, as well as a number of U.S. regional fall conferences.

Following the addition of real-time billing and accounts receivable functionality in 1981, the Magic operating system was introduced in 1982. By 1984, MEDITECH was supporting the VAX family of computers produced by Digital Equipment Corporation (DEC). That year, revenues totaled approximately $20 million. Other noteworthy developments on the technology front included the introduction of color windows and graphics in 1986, as well as the development of PCI in 1988, a forerunner of its Computerized Patient Record offering.

In tandem with these developments, MEDITECH was experiencing commensurate growth and expansion during the 1980s. Internationally, this was marked by the firm's entrance into the Canadian market in 1980, the achievement of "preferred vendor" status by governments in both Labrador and Newfoundland in 1986, and expansion in Saudi Arabia in 1987. Domestically, the company acquired a facility formerly known as the Underwood Building and opened its new headquarters in Westwood, Massachusetts, in 1983. MEDITECH's employee base reached 226 in 1985, exceeded 300 the following year, and reached 400 by 1988. MEDITECH celebrated 20 years in business in 1989 and reached another milestone by opening a new facility in Norwood, Massachusetts.

Advancing Healthcare Technology: 1990 and Beyond

In August 1990, MEDITECH purchased a three-story facility to accommodate its growing enterprise. Located on 55 acres, the historic Prowse Farm in Canton, Massachusetts, was acquired for $30 million. Formerly the world headquarters of Motorola subsidiary Codex Corporation, the site was home to a 250,000-square-foot office building made of glass and brick, which included a tropical atrium and mahogany floors. In addition to flexible conference and training facilities, the building provided more office space for MEDITECH's 700-employee work force, which had grown by 200 people in only 12 months.

Other noteworthy developments during this time included MEDITECH's expansion into the United Kingdom in 1990, and the introduction of handheld computing technology at Arkansas Children's Hospital the following year. Key leadership changes took place in 1993 when Pappalardo became MEDITECH's chairman, and Polimeno assumed the role of president. Howard Messing was named executive vice-president in 1994, when MEDITECH celebrated 25 years of operations and employed 1,159 people.

Company Perspectives:

MEDITECH's mission is to provide software that enables physicians, nurses, and other clinicians to orchestrate and deliver patient care in a safe, effective, and efficient manner. Our software is integrated in a manner that fully optimizes the financial and business potential of the health care enterprise. Our mission mandates that information is available whenever and wherever clinicians need it by ensuring access to a full electronic record that includes data from across the continuum. We will continue to take advantage of new technologies that allow for caregiver mobility and integration of evidence into the practice, with the end goal of enabling effective patient management.

By late 1994, MEDITECH's revenues totaled $100 million, and its systems were in use by approximately 12 percent of all U.S. hospitals, or 640 institutions. That year, healthcare giant Columbia/HCA had installed the company's software in 60 of its 311 hospitals, with plans for 100 percent adoption over the next two years. At this time, MEDITECH software was saving doctors time by putting such patient data as lab results and vital signs at their fingertips faster and from more locations, including the office, hospital, and home.

In the mid-1990s, while many healthcare organizations still relied on mainframe computer systems to manage information, some were transitioning to client/server configurations. MEDITECH made preparations to pilot-test its system at one hospital in a purely client/server setup. In the January 5, 1995, issue of Hospitals & Health Networks, MEDITECH Chief of Technical Research Chris Anschuetz commented on the new configuration: "You are now making use of all the computing power that's sitting on everybody's desktop, and all that computing power is linked in one big happy network. That one network is capable of doing a lot more than it would if it were depending on central hosts to do all the computing."

MEDITECH's revenues reached $167.8 million in 1996, with more than 20 percent devoted to research and development initiatives. That year, the company launched its Web site, provided Internet e-mail to its 1,600 employees, and established a corporate technology division. MEDITECH also completed HCIS installations at 244 additional hospitals.

At this time, MEDITECH's proprietary Magic-based operating system ran only on computers built by Data General and DEC. This situation stemmed from the fact that, early on, both computer companies were willing to adapt their computer systems to the specific needs of the healthcare industry. In addition, they were both located in Massachusetts, in close geographic proximity to MEDITECH's headquarters.

MEDITECH's HCIS had earned a solid reputation for reliability by the mid-1990s, and the company reported that 98 percent of its customers had never replaced the MEDITECH HCIS with one from another firm. Even so, some industry analysts identified lack of compatibility with other computer systems as a limiting factor. For this reason, MEDITECH made its move toward an open, client/server architecture a top priority.

In its May 1997 issue, Health Data Management revealed that MEDITECH's HCIS software was in place at 1,100 sites throughout the world. A company announcement in March of the following year listed the addition of seven new customers. These included five organizations in the hospital/medical center category, as well as the Pennington Biomedical Research Center in Baton Rouge, Louisiana, and the Institute for Rehabilitation and Research in Houston Texas.

Growth continued at MEDITECH in 1997. With 1,840 employees company-wide, the enterprise acquired a new building in Lowder Brook, Massachusetts, and began serving customers in Puerto Rico. Several new offerings were released the following year, including electronic medical record (EMR), long-term care and patient education products, and an electronic documentation system called MEDITECH Patient Care System (PCS).

MEDITECH was evaluating the feasibility of making its HCIS operate on a wider variety of hardware in 1999, beyond systems made by Data General and DEC. Other developments that year included an image-enabled automated patient information system and picture archiving communications system, as well as the Web-based Patient Education Suite. The latter product allowed healthcare organizations to provide patients with access to password-protected health content, including information about diagnosis and treatment for a variety of conditions. It also allowed hospitals to conduct patient satisfaction surveys, showcase staff members, and provide details about upcoming events.

MEDITECH ended the 1990s by celebrating 30 years of operations and earning revenues of $225.6 million. By this time, more than 100 of the company's customers were using its HCIS via a client/server configuration. Still, challenges to MEDITECH and its industry as a whole cropped up in the form of slowed sales, particularly as competition ensued to gain the business of hospitals that were at the same time seeking to contain ever-spiraling healthcare costs. Analysts considered the market flat and predicted increasing struggles for the healthcare information technology sector.

Nevertheless, MEDITECH began the 21st century by successfully dealing with the Y2K issue and signing its 1,500th customer. Revenues fell to $216.9 million that year, but improved to $223.8 million in 2001. At that time, MEDITECH reorganized into three divisions: New Application Development, Implementation, and Client Services. That year, Dell and IBM partnered with the company as new hardware providers, and MEDITECH introduced its Magic EDM Ambulatory Care Suite. Another important technical milestone came in 2002, when MEDITECH began supporting both Citrix and Windows XP.

Key Dates:

1966:
A. Neil Pappalardo helps develop the MUMPS programming language at Massachusetts General Hospital's computer lab.: 1969:
Pappalardo founds Medical Information Technology Inc. (MEDITECH) when the MUMPS language becomes commercially available.: 1976:
The company releases the first MIIS Standard and starts development on financial and patient care modules for its healthcare information system.: 1979:
A new facility is erected in Cambridge, Massachusetts.: 1981:
MEDITECH offers real-time billing and accounts receivable functionality.: 1983:
The company purchases its headquarters facility in Westwood, Massachusetts.: 1989:
MEDITECH opens a facility in Norwood, Massachusetts.: 1993:
Pappalardo becomes chairman, and Larry Polimeno is named president.: 1997:
MEDITECH's software is in place at 1,100 sites throughout the world.: 1999:
MEDITECH celebrates 30 years of operations.: 2002:
MEDITECH begins supporting both Citrix and Windows XP.

Several important developments took place at MEDITECH in 2003. On the leadership front, Polimeno was promoted to vice-chairman and Messing was named president and COO. That year, the company was reporting a 23 percent market share and sales of $270.8 million, up from $256.2 million in 2002. MEDITECH appeared to be positioned for growth as it continued to compete in the medical informatics industry it pioneered some 35 years before.