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                                                                   Exhibit 10.16

                                 PROMISSORY NOTE
                                 (SECURED LOAN)


Date of Note:     October __, 1998

Amount of Note:   $500,000

Borrower:         Paul J. Kerz

Interest Rate:    5.53125% per annum


      1. Borrower's Promise to Pay. In return for a loan (the "Loan") that I
have received, I promise to pay, in one lump sum payment on the maturity date
(defined below), U.S. $500,000 (this amount is hereinafter called the
"principal"), plus interest, to the order of the Lender. The "Lender" is HSA
MANAGED CARE SYSTEMS, INC. The Lender or anyone who takes this Note by transfer
and who is entitled to receive payments under this Note is called the "Note
Holder".

      2. Interest. Interest will be charged on the principal until the full
amount of the principal has been paid. I will pay interest at a yearly rate as
described above.

      The interest rate required by this Section 2 is the rate I will pay both
before and after any default described in Section 6(b) of this Note.

      3.  Payments.

      Time and Place of Payments. I will pay interest semi-annually by making
payments on the last day of April and October of each year.

      I will make my first semi-annual payment of interest on April 30, 1999. I
will continue to make these payments every six months until I have paid all of
the principal and interest and any other charges described below that I may owe
under this Note. My semi-annual payments will be applied to interest before
principal. I will pay all of the unpaid principal of the Loan along with any
accrued and unpaid interest related thereto on October 31, 2000 (the "Maturity
Date").

      4. Borrower's Right to Prepay. I have the right to make payments of
principal at any time before they are due.
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Any such payment of principal is hereinafter called a "prepayment". When I make
a prepayment, I will notify the Note Holder in writing of such prepayment.

      I may make a full prepayment or partial prepayment without paying any
prepayment charge. The Note Holder will use all of my prepayments to reduce the
amount of principal that I owe under this Note. If I make a partial prepayment,
there will be no changes in the due date of my semi-annual payments unless the
Note Holder agrees in writing to those changes. Any amounts of the Loan prepaid
may not be reborrowed.

      5. Loan Charges. If a law, which applies to this Loan and which sets
maximum loan charges, is finally interpreted so that the interest or other loan
charges collected or to be collected in connection with this Loan exceed the
permitted limits, then: (i) any such loan charge shall be reduced by the amount
necessary to reduce the charge to the permitted limit; and (ii) any sums already
collected from me which exceeded permitted limits will be refunded to me. The
Note Holder may choose to make this refund by reducing the principal I owe under
this Note or by making a direct payment to me. If a refund reduces principal,
the reduction will be treated as a partial prepayment.

      6. Borrower's Failure to Pay as Required.

      (a) Late Charge for Overdue Payments. Any amount of principal or interest
which is not paid when due, whether at stated maturity, by acceleration, or
otherwise, shall bear interest from the date when due until said principal or
interest amount is paid in full, payable on demand, at the prime commercial
lending rate announced from time to time by Chase Bank at its principal office
in New York City.

      (b) Default. If I do not pay the full amount of each semi-annual payment
on the date it is due, I will be in default.

      (c) Notice of Default. If I am in default, the Note Holder may send me a
written notice telling me that if I do not pay the overdue amount, the Note
Holder may require me to pay immediately the full amount of principal which has
not been paid and all the interest that I owe on that amount. That date must be
at least fifteen (15) days after the date on which the notice is delivered or
mailed to me.

      (d) No Waiver By Note Holder. Even if, at a time when I am in default, the
Note Holder does not require me to pay
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immediately in full as described above, the Note Holder will still have the
right to do so if I am in default at a later time.

      (e) Payment of Note Holder's Costs and Expenses. If the Note Holder has
required me to pay immediately in full as described above, the Note Holder will
have the right to be paid back by me for all of its costs and expenses in
enforcing this Note to the extent not prohibited by applicable law. Those
expenses include reasonable attorneys' fees.

      7. Giving of Notices. Unless applicable law requires a different method,
any notice that must be given to me under this Note will be given by delivering
it or by mailing it by first class mail to me at 126 East 65th Street, New York,
New York 10021, or at a different address if I give the Note Holder a notice of
my different address.

      Any notice that must be given to the Note Holder under this Note will be
given by delivering it or mailing it by first class mail to the Note Holder at:
HSA Managed Care Systems, Inc., c/o Health Care microsystems, Inc., 200 N.
Sepulveda Boulevard, El Segundo, California 90245, Attention: Thomas J. Kazamek,
or at a different address if I am given a notice of that different address.

      8. Waivers. I and any other person who has obligations under this Note
waive the rights of presentment and notice of dishonor. "Presentment" means the
right to require the Note Holder to demand payment of amounts due. "Notice of
dishonor" means the right to require the Note Holder to give notice to other
persons that amounts due have not been paid.

      9. Secured Note. In addition to the protections given to the Note Holder
under this Note, the Security Agreement which I have entered into with the
Lender dated as of today's date (the "Security Agreement") protects the Note
Holder from possible losses which might result if I do not keep the promises
which I make in this Note.

      10. Events of Default. Notwithstanding anything to the contrary provided
herein, the occurrence of any one or more of the following shall be an "Event of
Default" hereunder and upon the occurrence of an Event of Default, any and all
principal and interest due hereunder shall be immediately due and payable:
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      (a) if I shall fail to pay when due and payable any obligations owing
under this Note or another note of even date herewith (the "Unsecured Loan
Note") I executed in favor of the Lender in connection with an unsecured loan
made to me by the Lender (the "Unsecured Loan");

      (b) if I cease to be actively involved in the management of the Lender
or its parent company, Health Management Systems, Inc. ("HMS");

      (c) if the Security Agreement ceases to be in full force and effect;

      (d) if an Event of Default has occurred under the Unsecured Loan;

      (e) if I shall file a petition in bankruptcy or for an arrangement or for
reorganization pursuant to the Federal Bankruptcy Act or any similar law,
federal or state, or if, by decree of a court of competent jurisdiction, I shall
be adjudicated a bankrupt, or be declared insolvent, or shall make an assignment
for the benefit of creditors, or shall admit in writing my inability to pay my
debts generally as they become due, or shall consent to the appointment of a
receiver or receivers of all or any part of my property;

      (f) if any of my creditors shall file a petition in bankruptcy against me
or for my reorganization pursuant to the Federal Bankruptcy Act or any similar
law, federal or state, and if such petition shall not be discharged or dismissed
within sixty (60) days after the date on which such petition was filed;

      (g) if I shall fail to observe or perform any covenant, condition or
agreement in this Note, the Security Agreement or in any other document that I
shall have executed or delivered in connection with this Loan; or

      (h) if any representation or warranty made by me in this Note, the
Security Agreement or in any other document that I shall have executed or
delivered in connection with this Loan shall prove to have been incorrect in any
material respect on or as of the date made.

      IN WITNESS WHEREOF, I have executed and delivered this Note on the day and
year first above written.
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                                            PAUL J. KERZ