Adolfo Echeveste, who headed the agency for ten years, until he was forced out earlier this year, says the health-care system "was losing its shirt" because it did not have adequate computer systems.

The winds of health-care management were already shifting to competition and prepaid care, he says. The creation of AHCCCS (Arizona Health Care Cost Containment System) and other programs that were setting standard reimbursement rates for care meant that health-care systems were going to have to get efficient to survive.

"When you're in a prepaid, competitive, managed-care environment, it is absolutely essential that you have the automation and the tools to define very quickly and in detail the costs for services--that you're able to handle and manage the system and collect data for billing purposes," Echeveste says.

By 1990, after five years of study, agency planners felt confident that they knew what type of system was needed to keep track of thousands of patient admissions and billing records, medical records, inventory data and the myriad other bookkeeping and records tasks attendant to being a health agency.

That year, contracts were signed with IBM to purchase a mainframe that would be the backbone of the system. Another contract was signed with IBAX--a partnership consisting of IBM and a second company--to provide the software for the system.

The system, according to IBM, is used by more than 100 hospitals across the country--including Samaritan Health Services and Tucson Medical Center in Arizona.

Installed as the system's heart was an IBM 3090, a string of big boxes that sits in an air-conditioned room and hums, serving as a repository for most any data health-care employees might need to tap into.

For almost its entire duration, the project moved along under Echeveste's leadership.

"Adolfo wanted this to be the system that would take the agency into the 21st century," says planner Steve Wilson.

There were problems with the project, although not unusual ones for an undertaking of such scope. Squabbles broke out over how to tailor the software for the specific needs of different branches of the agency.

Not infrequently, county records show, IBAX, IBM or others involved in the project complained that there was a lack of leadership, that no one was making hard decisions about how much time and money would be spent modifying the software for different uses.

In general, however, agency leaders and employees were confident they would soon have a whizz-bang computer helping them do their jobs.

(Months after new administrators decided to scrap the project, the county's internal auditors looked over the project's financial records and found that, while there had been some sloppy bookkeeping, the project was up to snuff in terms of its budget. The auditors "did not observe any expenditure of funds which were [sic] inconsistent with the terms of the contract.")

But then Echeveste, the project's patron, was run off as head of the agency by County Manager Roy Pederson, because the county hospital was hemorrhaging money.

Williams was appointed to fill the post temporarily, and charged with bringing the agency budget under control. From that day on, observers say, the county's investment was doomed.

@body:"Computers are really like ladies' hemlines. They go up. They go down. It depends what's fashionable," says an insider who observed the county's decision to abandon its computer investment.

Big mainframe computers that sit in their own quiet rooms have, of late, fallen out of fashion among those claiming to be on the cutting edge of the industry.

That disfavor explains why, earlier this year, IBM was forced to lay off employees for the first time in its history.

The trend, instead, is toward what are called distributive systems--smaller, more powerful computers linked by various networks. Instead of one, humming central repository for data, information is stored around and about, wherever it is the most useful, in computers that can talk to one another when necessary.

Simply put, it's a question of big boxes versus little boxes, and right now, the little boxes are winning. That is not to say that there is anything wrong with big boxes, particularly if they're already paid for.

There is little difference in what the two types of systems can do, but the newer, nonmainframe systems can be cheaper and easier to customize for each user's needs.

Had the county not already invested so heavily in a mainframe system, most planners agree, it might well want one of the newer systems. But the decision to go mainframe was made three years ago, and the money has been spent.

When Williams and other new administrators moved in to take over the Health Care Agency, several insiders say, they decided they wanted little boxes, not the big boxes that had already been purchased. They wanted to be fashionable.

The IBM/IBAX system was already being used by some parts of the agency, and within six months was expected to be fully up and running. Terminals had been parceled out to many of the agency's branches, and software designs were being finalized. The agency's Medical Records unit was already on the computer, as were some of the laboratory data and some claims processing.

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