McKessonHBOC announced on March 29 it is dropping its attempt to port its Amisys Payor Solution software to a platform other than the HP e3000. While some healthcare analysts and customers wondered if the decision signalled bad times for the industry in general, others cheered the move. One consultant who spent years in the Amisys organization said it was “the best thing to happen to the HP 3000 in years.” Frank Kelly, currently working with Lancaster Consulting, said that by killing off the Open project HBOC had done the equivalent of pulling a stone out of its shoe, so it could leap back onto the path of perfecting its HP 3000 version of the product.

“It’s sounding more and more like a recommitment,” Kelly said. “The top focuses are now the installed base, customer satisfaction, getting some releases out the door, and looking how they take the 3000 product forward.” Kelly believes a Web front-end to the product, which helps healthcare organizations track business and subscriber data, is definitely being looked at.

A key portion of the HBOC announcement pledged fresh resource for the HP 3000, something customers say has been in short supply while promises of Amisys Open hung in the air. “McKessonHBOC will also maintain a strong commitment to its Amisys 3000 customers, which are primarily managed care organizations,” the release stated. “Over the past 18 months, we’ve seen a slowdown in purchase decisions for these large, complex systems," said Glenn Rosenkoetter, group president of the Payor Solutions Group where Amisys lives.“We are revisiting our strategy for the high-end market and re-evaluating our delivery models. In the meantime, we will focus on enhancement of the Amisys 3000 product and addressing customer priorities such as HIPAA compliance, which we anticipate to be a very significant undertaking for this market.”

McKessonHBOC officials were considering options in the week after the cancellation announcement, and meeting with HP. As we went to press, Payor Solutions Group General Manager Lee Root wasn’t ready to comment on the announcement, or to confirm rumors such as the layoffs of 94 HBOC employees, or the closing of the Rockville, Md. offices where Amisys grew up. But vice president of marketing John Slaby of the Payor Solutions Group said there were “definitely some exciting things” in the future for the application, software which has been selling some new HP 3000s over the past few years. The pace of the Amisys sales effort to place new 3000s has slowed considerably in the past year, as the company kept waiting for the open systems pot of gold to appear at the end of a five-year-long development rainbow. The project taxed the resources of the company by drawing focus away from the HP 3000 installed base product, according to customers. HBOC placed a moratorium last fall on new releases for the 3000 software, a hiatus that was scheduled to end on March 31. Customers using the software frequently need custom releases of the product to adapt to the business rules in their companies, so stopping all 3000 releases didn’t bode well for new sales. And customers report that HBOC was telling new prospects it would install the HP 3000 version of its products and “upgrade them” later on to the Amisys Open solution.

Developers report that such an upgrade would have delivered an Amisys version several laps behind the speed of the HP 3000 release of the software, even after millions of dollars of investment in the project. One source said that in the testing center in Maryland, even a $10 million IBM RS/6000 running Amisys Open could only perform 30 percent as fast as an HP 3000 system costing less than a fraction of what the IBM hardware cost. As recently as last summer, HBOC was announcing “positive benchmark results” on the Open project. Root was quoted in a press release about average response times of 2.4 seconds to more than 1,000 simultaneous system users, saying “This stunning performance in a midrange, one-server environment provides just a glimpse of the unprecedented speed and precision Amisys Open can achieve when the application services and database are separated onto two or more servers.” Despite using real customer data to test and IBM’s DB2 database, Amisys Open never got into the race with serious speed. The application pushes the HP 3000 to its limits as well; HP called the latest 6.5 release of MPE/iX the “Amisys release,” expanding the performance and capacity of the operating system to accommodate the heaviest workloads on any HP 3000.

Finally, software giant McKesson which acquired the solution when it bought HBOC announced Amisys Open was one of several projects being cancelled. McKesson’s Information Technology Business (ITB) called the move “a product strategy restructuring... which will provide the organization, infrastructure and focus for major growth in ITB’s core lines of business.” The ITB group will discontinue several products “that have not achieved quality, customer satisfaction or financial performance objectives.” Besides Amisys Open , others being axed are PharmCare, a Windows-based pharmacy system, and Pathways Smart Medical Record, an electronic medical record for physician offices. It would appear Amisys Open never got to achieving quality, since customers never saw it, and HBOC never sold one.

The cuts in the ITB operations could well be a direct result of the segment’s financial shortfalls. In its most recent quarter, the ITB group’s overall revenues dropped 23 percent versus the prior year, and software revenues were down 33 percent. Profits were also down in the group containing the Amisys business, dropping 44 percent from the previous year’s quarter. In the last week of April McKessonHBOC is scheduled to announce its fiscal year results — just about a year after investors cratered the McKesson stock in a stunning, $9 billion, one-day sell-off. It’s never recovered. e3000 customers were glad to see HBOC throw the Amisys stone from its shoe. “Fantastic move!” said Susan Butts of Cox Freeman HMS. “We have invested a lot of time, money, and resources in our HP 3000 and we continue to get our money's worth out of the box. I'm glad to see it happen!” Customers may get to hear where HBOC plans to go with its faster e3000 gait at the McKessonHBOC user conference, scheduled for the first week of May in Las Vegas.