Massachusetts General cleans house at RStar

April 7, 1993

Massachusetts General Hospital made sweeping changes last monthin the executive suite at RStar, the hospital's for-profit picturearchiving and communication systems business. The changes raisequestions about RStar's viability as well the company's

Massachusetts General Hospital made sweeping changes last monthin the executive suite at RStar, the hospital's for-profit picturearchiving and communication systems business. The changes raisequestions about RStar's viability as well the company's relationshipwith 3M, which had planned to launch a PACS line this year usingRStar technology.

3M showed an ICU/CCU mini-PACS as a work-in-progress at the1992 Radiological Society of North America meeting. The majorsupplier of medical film and film imagers said the digital PACsystem would be commercially available in the second quarter of1993.

Operational turbulence at MGH's spinoff company highlightsthe risk 3M took in hitching its PACS wagon to a not-yet-risingRStar. This turbulence contrasts with the relatively smooth PACSpartnership of 3M competitor Kodak and Vortech Data.

Vortech had an established PACS business before Kodak formeda partnership and invested in the firm two and a half years ago(SCAN 9/12/90). Kodak has since increased its equity positionin Vortech and combined personnel from the two companies. Vortechcould become a wholly owned Kodak subsidiary this year.

The changes at RStar were not just administrative. Departingpresident James Taaffe was instrumental in developing much ofthe hardware and software in the RStar PAC system. Leaving withTaaffe were vice president of sales John Evans, CFO Eugene Pettinelliand vice president of administration Maria Kaldis.

These developments surprised PACS industry observers.

"(RStar) was Jamie's project," said a radiologistfamiliar with RStar. "He was the brains behind the wholething. He put it together."

Executives hired to replace Taaffe, Kaldis and Pettinelli areMGH employees, prompting speculation that the hospital is reassertingcontrol over the operation. RStar's new president is Vincent Cucchiara,an MGH administrator.

RStar's system is intended for high-end hospital-wide PACS.It features Macintosh Quadra workstations with proprietary RStardisplay controllers. Images are viewed on 2000 x 2000-pixel monitors.The system uses a Digital Equipment Vax computer for transactionprocessing and database functions.

Representatives of 3M and RStar were tightlipped about thechanges. A 3M spokesperson declined to comment on the status ofthe 3M/RStar relationship, while an MGH official had not returnedphone calls at press time.

If the house cleaning is indicative of troubled times at RStar,it could delay introduction of 3M's PACS product, according toPACS consultant Michael Cannavo of Image Management Consultantsin Winter Park, FL.

"3M has made a commitment to the market that I'm sureit will fulfill," Cannavo said. "However, this certainlywill set back their implementation plans somewhat."