Ace Cc
January 14, 1969

Dean Robert Glaser

Joshua Lederberg

Dear Bob:

This memo is an early warning to you tha I may have to ask you to intervene

in deciding upon an issue that will be of very great significance for computer
facilities for the medical school and the hespital. This has to do with the
use of the ACME system for business operations in the hospital.

In Par. 11 of the attached memo from Larry Schneiderman, Mr. Barber is quoted
as preceding a mandate to develop a system for the most economic way of bill-
ing patients not to subsidize research. We of course believe that patients
should not be economically penalized for coming to Stanford Hospital, but it
is obvious that this philosophy could readily be misapplied in many other
areas of hospital operations in a way which would be disasterous to the func-
tioning of Stanford as a unversity hospital. It may be quite feasible to
develop a rate base for ACME services such that business operations would be
processed at no economic penalty some possible difference than being subsi-
dized under the heading of research. This may require a certain amount of
additional fuss and trouble than a purely service operation would contemplate,
but this is certainly not a new challenge in an academic setting.

I don't think there is any serious recalcitrance or possibly even a serious
difference of opinion, but I felt that you should be apprised of the essential
problem that may be arrising here in cage a more definite action on your part

is needed to resolve it. I am not recommending any decisive action on your

part at the present time, but I would hope thatygou would keep your mind open

for developments along these lines that might lead to an uncontrolled redun- .
dancy and divergence of effort which would be ,advantageous to everybody. We dye
do plan to make a stronger effort than in the™ past to maintain good communica-

tion with the business operations group, for example with representation on

the policy committee and this may be the main thing needed to set us on the

right course in the future.

Larry's memorandum places great stregs on the economic need for unification

in this system. To my mind the coherence of the overall system of data manage-
ment is a much more important consideration. The concern that is expressed in
Par. 12 may be a legitimate one but it is not one that should be answered uni-
lateral solely from the point of view of the hespital administrator. There

are some very important questions of philosophy that underlie this discussion
in which inevitably you must play an important part.

JL;1h
Att.