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B-170688 1 (1971-01-08)

handle is hein.gao/gaobabktr0001 and id is 1 raw text is: WASHINGTON. D.C. 054IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII RELEASED B-170688 N Dear Mr. McClory: Your letter of August 19, 1970, referred for our consideration a letter dated August 10, 1970, from your constituent, Mr. Sheldon I. Dorenfest, President of Compucare, Inc. Mr. Dorenfest expressed con- cern about the use of Government funds to develop a shared computer system for hospitals, which was subsequently sold to a private com- pany--a competitor of Compucare--and requested comments on the legality of the action and suggestions concerning what recourse his company might have. We previously advised you that the Department of Health, Educa- tion, and Welfare (HEW) had received from Senator Charles H. Percy a copy of a similar letter from Mr. Dorenfest and was investigating the matter for a reply to Senator Percy. HEW's investigation concluded that a large part of the computer system in question had been developed through the use of private funds and that there was no reason to doubt that the portion developed with Government funds would be made avail- able to all interested parties in the immediate future. We were in- formed that HEW had no plans for future action on this matter. Effective January 1, 1967, the Public Health Service (PHS) of HEW awarded a grant to the Sisters of the Third Order of St. Francis--a re- ligious group which operates 11 hospitals in Illinois, Iowa, and Michi- gan--for a research project entitled Demonstration of a Shared Hos- pital Information System. The grant was approved for a period of 3 years, from January 1, 1967, through December 31, 1969; the project period subsequently was extended, without additional funding, through January 31, 1971. The costs reimbursed by HEW during the 3-year pe- riod totaled about $1.4 million, subject to final settlement of indirect costs. HEW records showed that the Third Order had made a cost- sharing contribution of about 25 percent of the total project costs, The purpose of the project was to demonstrate the shared use, by a group of participating hospitals, of a central computer system to pro- vide communication between various hospital departments and between physicians and hospitals and to automate patient records and hospital procedures for such operations as admittance, laboratory, and radiology. M E = L l III fl Il uW iiifli t Uil Hl 0 UHiii1U

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