<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                            ------------------------

                                   FORM 10-Q

<TABLE>
<C>        <S>
   /X/     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 OF THE
           SECURITIES EXCHANGE ACT OF 1934
</TABLE>

                FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1999
                                       OR

<TABLE>
<C>        <S>
   / /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 OF THE
           SECURITIES EXCHANGE ACT OF 1934
</TABLE>

        FOR THE TRANSITION PERIOD FROM ______________ TO ______________

                         COMMISSION FILE NUMBER 0-27502

                            ------------------------

                       HEALTH SYSTEMS DESIGN CORPORATION

             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                             <C>
                DELAWARE                                      94-3235734
    (State or other Jurisdiction of             (I.R.S. Employer Identification Number)
     Incorporation or Organization)

   1111 BROADWAY, OAKLAND, CALIFORNIA                            94607
(Address of principal executive offices)                      (Zip code)
</TABLE>

                                 (510) 251-1330
              (Registrant's telephone number, including area code)

                            ------------------------

    Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/  No / /

    The registrant had 6,739,158 shares of common stock outstanding as of
January 31, 2000.

    Exhibit index is located on page 11

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
                       HEALTH SYSTEMS DESIGN CORPORATION
                                     INDEX

<TABLE>
<CAPTION>
                                                                                  PAGE
                                                                                --------
<C>      <C>      <S>                                                           <C>
PART I. FINANCIAL INFORMATION

         Item 1.  Consolidated Financial Statements

                  Consolidated Balance Sheets--December 31, 1999 and                2
                  September 30, 1999..........................................

                  Consolidated Statements of Operations--Three months ended
                  December 31, 1999 and 1998..................................      3

                  Consolidated Statements of Cash Flows--Three months ended
                  December 31, 1999 and September 30, 1999....................      4

                  Notes to Consolidated Financial Statements..................      5

         Item 2.  Management's Discussion and Analysis of Financial Condition
                  and
                  Results of Operations.......................................      7

PART II. OTHER INFORMATION

         Item 6.  Exhibits and Reports on Form 8-K............................     10
</TABLE>

                                       1
<PAGE>
                         PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                       HEALTH SYSTEMS DESIGN CORPORATION
                          CONSOLIDATED BALANCE SHEETS
                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                              DECEMBER 31,   SEPTEMBER 30,
                                                                  1999           1999
                                                              ------------   -------------
                                                              (UNAUDITED)
<S>                                                           <C>            <C>
                                          ASSETS
Current Assets:
  Cash and cash equivalents.................................     $ 4,312        $ 4,176
  Short-term marketable securities..........................       3,512          5,029
  Accounts receivable, net of allowance for doubtful
    accounts of $425 at December 31, 1999, and $325 at
    September 30, 1999, respectively........................       6,839          4,440
  Unbilled revenue..........................................       2,870          6,007
  Prepaid expenses..........................................         327            272
                                                                 -------        -------
    Total current assets....................................      17,860         19,924
                                                                 -------        -------
Property and equipment:
  Computer equipment........................................       4,308          4,148
  Office furniture and other................................       2,428          2,320
                                                                 -------        -------
    Total property and equipment............................       6,736          6,468
    Less: accumulated depreciation..........................      (3,907)        (3,561)
                                                                 -------        -------
    Net property and equipment..............................       2,829          2,907
                                                                 -------        -------
Deposits and other assets...................................         446            623
                                                                 -------        -------
Software development costs, net of accumulated amortization
  of $1,581 at December 31, 1999 and $1,245 at September 30,
  1999, respectively........................................       3,279          3,330
                                                                 -------        -------
    Total assets............................................     $24,414        $26,784
                                                                 =======        =======

                           LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable..........................................     $ 1,077        $   878
  Accrued liabilities.......................................       2,996          3,481
  Current portion of capital lease obligations..............         301            294
  Unearned revenue..........................................       4,428          4,700
                                                                 -------        -------
    Total current liabilities...............................       8,802          9,353
  Deferred rent.............................................          59             21
  Capital lease obligations, net of current portion.........         183            262
                                                                 -------        -------
    Total liabilities.......................................       9,044          9,636
Stockholders' equity:
  Preferred stock, $.001 par value, 1,000,000 shares
    authorized, none outstanding............................          --             --
  Common stock, $.001 par value, 20,000,000 shares
    authorized, 6,736,158 and 6,730,858 shares issued and
    outstanding at December 31, 1999 and September 30, 1999,
    respectively............................................           7              7
  Additional paid-in capital................................      24,131         24,122
  Treasury stock, 2,054 shares..............................         (29)           (29)
  Deferred compensation.....................................          (8)           (12)
  Retained deficit..........................................      (8,731)        (6,940)
                                                                 -------        -------
  Total stockholders' equity................................      15,370         17,148
                                                                 -------        -------
    Total liabilities and stockholders' equity..............     $24,414        $26,784
                                                                 =======        =======
</TABLE>

                                       2
<PAGE>
                       HEALTH SYSTEMS DESIGN CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                              THREE MONTHS ENDED
                                                                 DECEMBER 31,
                                                              -------------------
                                                                1999       1998
                                                              --------   --------
<S>                                                           <C>        <C>
Revenues:
  System sales..............................................  $ 3,888    $ 4,454
  Services and other........................................    1,282        927
                                                              -------    -------
    Total revenues..........................................    5,170      5,381
Cost of revenues............................................    2,742      2,203
                                                              -------    -------
    Gross margin............................................    2,428      3,178
                                                              -------    -------
Operating expenses:
  General and administrative................................    1,489      1,470
  Sales and marketing.......................................      861      1,193
  Product development.......................................    1,936      2,052
                                                              -------    -------
    Total operating expenses................................    4,286      4,715
                                                              -------    -------
      Loss from operations..................................   (1,858)    (1,537)
Interest, net...............................................       81        112
                                                              -------    -------
    Loss before provision for income taxes..................   (1,777)    (1,425)
Provision for income taxes..................................       14          1
                                                              -------    -------
Net loss....................................................  $(1,791)   $(1,426)
                                                              =======    =======
Net loss per share:
  Basic.....................................................  $ (0.27)   $ (0.21)
                                                              =======    =======
  Diluted...................................................  $ (0.27)   $ (0.21)
                                                              =======    =======
Weighted average common shares outstanding:
  Basic.....................................................    6,734      6,678
                                                              =======    =======
  Diluted...................................................    6,734      6,678
                                                              =======    =======
</TABLE>

                                       3
<PAGE>
                       HEALTH SYSTEMS DESIGN CORPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                              THREE MONTHS ENDED
                                                                 DECEMBER 31,
                                                              -------------------
                                                                1999       1998
                                                              --------   --------
<S>                                                           <C>        <C>
Cash flows from operating activities:
  Net loss..................................................  $(1,791)   $(1,426)
  Adjustments to reconcile net loss to net cash used in
    operating activities:
    Allowance for doubtful accounts.........................      100        200
    Depreciation and amortization...........................      758        490
    Gain on sale of assets..................................       --          7
    Amortization of deferred liabilities....................       41          4
    Changes in current assets and liabilities:
      Accounts receivable...................................   (2,499)    (1,625)
      Unbilled revenue......................................    3,137       (798)
      Prepaid expenses......................................      (55)       (44)
      Accounts payable......................................      199       (116)
      Accrued liabilities...................................     (485)        20
      Unearned revenue......................................     (272)     2,986
                                                              -------    -------
        Net cash used in operating activities...............     (867)      (302)
                                                              -------    -------
Cash flows from investing activities:
  Purchases of property and equipment.......................     (268)      (124)
  Proceeds from sale of property and equipment..............       --         75
  Sales of short-term marketable securities, net............    1,517         --
  Capitalization of software development costs..............     (361)      (684)
  Deposits and other assets.................................      177       (100)
                                                              -------    -------
    Net cash provided by (used in) investing activities.....    1,065       (833)
                                                              -------    -------
Cash flows from financing activities:
  Repayments of capital lease obligations...................      (71)        --
  Proceeds from exercise of common stock options............        9          9
  Proceeds from exercise of common stock warrants...........       --         25
                                                              -------    -------
    Net cash provided by (used in) financing activities.....      (62)        34
                                                              -------    -------
    Net increase (decrease) in cash.........................      136     (1,101)
Cash and cash equivalents at beginning of period............    4,176      9,440
                                                              -------    -------
Cash and cash equivalents at end of period..................  $ 4,312    $ 8,339
                                                              =======    =======
Supplemental disclosure of cash flow information:
  Interest paid.............................................  $     8    $    --
  Taxes paid................................................  $     8    $     1
</TABLE>

                                       4
<PAGE>
                       HEALTH SYSTEMS DESIGN CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               DECEMBER 31, 1999

1. BASIS OF PRESENTATION

    The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information on substantially the same basis as the annual audited
financial statements. However, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments, consisting
of normal recurring adjustments, considered necessary for a fair presentation
have been included. Operating results for the three month period ended
December 31, 1999 are not necessarily indicative of the results that may be
expected for the year ending September 30, 2000. These consolidated financial
statements should be read in conjunction with the financial statements and
footnotes thereto for the year ended September 30, 1999 included in the
Company's Form 10-K Annual Report.

2. REVENUE RECOGNITION

    The Company licenses its internally developed software products and other
software products and other software products directly to end-users and
indirectly though remarketers, under the terms of product license contracts. The
Company also generates revenues from sales of implementation services, fees for
product enhancement, post-contract support, consulting services and training
services performed for customers who license the Company's products and
reselling hardware and third party products. Contracts with customers could be
terminated under certain circumstances and revenues recognized could be
refundable upon termination in certain cases, including breach of contract. The
termination of significant customer contracts could have a material adverse
effect on the Company's business, financial condition, or results of operations.

    If the contract does not require significant production or customization of
software, license revenue is recognized when all the following conditions are
met: a signed contract is obtained, delivery has occurred, the fee is fixed and
determinable, and collection is probable. The Company generally recognizes
DIAMOND-REGISTERED TRADEMARK- 725 license revenue upon shipment of the software
to end users, as no significant production or customization of this software is
required, and the installation period is relatively short. The Company generally
recognizes DIAMOND-REGISTERED TRADEMARK- 950C/S license revenue on a
percentage-of-completion basis based on the labor hours required to implement
the system, as this software generally requires an extended installation period
and can require significant enhancements. If the software license agreement
provides for acceptance criteria that extend beyond the published specifications
of the applicable product, then revenues are recognized upon the earlier of
customer acceptance or the expiration of the acceptance period.

    Implementation, consulting and training fees are billed either on an hourly
or a monthly basis and are recognized as services are rendered. Third party
software and hardware are typically billed and recognized as revenue when
delivered to the end user.

    The Company generally recognizes DIAMOND-REGISTERED TRADEMARK- enhancement
revenues on a percentage-of-completion basis based on the labor hours required
to complete the applicable release project.

    Post-contract support services are billed on a monthly basis. Customers who
purchase post-contract support services under maintenance agreements have the
right to receive unspecified product updates and upgrades. Revenues from
post-contract support services are recognized ratably over the term of the
support period. If post-contract support services are included free or at a
discount in a license agreement,

                                       5
<PAGE>
                       HEALTH SYSTEMS DESIGN CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               DECEMBER 31, 1999

2. REVENUE RECOGNITION (CONTINUED)

such amounts are recorded at their fair market value based on the value
established by independent sale of such post-contract support services to
customers and license fee revenue is correspondingly reduced. Customers that do
not purchase post-contract support must purchase product updates and upgrades
under separate agreements that are subject to the criteria of the Company's
revenue recognition policy.

3. CAPITALIZED SOFTWARE DEVELOPMENT COSTS

    The Company accounts for capitalized software costs in accordance with SFAS
86, "Accounting for the Costs of Computer Software to be Sold, Leased, or
Otherwise Marketed." The Company begins capitalizing software development costs
upon the establishment of technological feasibility, which is established upon
the completion of a working model or, in the case of major releases, detailed
program design. Costs incurred prior to technological feasibility are charged to
expense as incurred. Capitalization ceases when the product is considered
available for general release to customers. Capitalized software development
costs are amortized to direct costs over the estimated economic lives of the
software products based on actual sales experience and product life expectancy.
Generally, estimated economic lives of the software products do not exceed
3 years. Capitalized software development cost amortization was approximately
$412,000 and $173,000 for three months ended December 31, 1999 and 1998,
respectively.

4. ADOPTION OF NEW ACCOUNTING STANDARDS

    In June 1998, the FASB issued SFAS No. 133 "Accounting for Derivative
Instruments and Hedging Activities" which is required to be adopted for fiscal
quarters beginning after June 15, 2000. Adoption of this pronouncement is not
expected to have a material impact on the Company's financial statements taken
as a whole.

    In June 1999, the FASB issued SFAS No. 137 "Accounting for Derivative
Instruments and Hedging Activities--Deferral of the Effective date of SFAS
No. 133" which extended the required adoption date for SFAS No. 133 to fiscal
years beginning after June 15, 2000.

                                       6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

OVERVIEW

    Health Systems Design Corporation (the Company) provides health benefits
information systems software to a broad range of organizations that administer
health benefits. The Company's principal product line,
DIAMOND-REGISTERED TRADEMARK- consists of DIAMOND-REGISTERED TRADEMARK- 725 AND
DIAMOND-REGISTERED TRADEMARK- 950C/S. The Company's principal software products,
DIAMOND-REGISTERED TRADEMARK-, enable organizations to manage information about
members, employer groups, providers, benefit plans, referrals and authorizations
and health care services. DIAMOND-REGISTERED TRADEMARK- supports a wide range of
administrative and financial transactions related to provider reimbursement,
premium billing, customer service, patient care management and a variety of
other functions.

    The Company's revenues are derived from licensing
DIAMOND-REGISTERED TRADEMARK- products, providing the associated implementation,
product enhancements, post-contract support, consulting services and training
services and reselling hardware and third party products. If there are no
uncertainties surrounding a contract, as described by generally accepted
accounting principles, then the Company generally recognizes
DIAMOND-REGISTERED TRADEMARK- 950C/S license revenue on a percentage of
completion basis based on the labor hours required to implement the system. The
Company's ability to make individual system sales in a particular period will
significantly impact its financial performance in future periods. As the Company
has pursued larger system sales (DIAMOND-REGISTERED TRADEMARK- 950C/S), it has
seen and expects to continue to see variability in the recognition of system
sales revenue. If there are no uncertainties surrounding a contract, as
described by generally accepted accounting principles, then the Company
generally recognizes DIAMOND-REGISTERED TRADEMARK- 725 license revenue upon
shipment of the software to end users. Implementation, post-contract support,
consulting fees and training are billed either on an hourly or monthly basis and
are recognized as services are rendered. Hardware and third party products are
typically billed and recognized as revenues when delivered to the client.
Significant portions of system revenues recognized in the three months ended
December 31, 1999 resulted from license sales executed in prior periods.

RESULTS OF OPERATIONS

    REVENUES

    Total revenues were $5,170,000 and $5,381,000 for the three months ended
December 31, 1999 and 1998, respectively, representing a decrease of 4%. Two
customers accounted for approximately 38% and 32% of total revenues for the
three months ended December 31, 1999 and 1998, respectively. Blue Shield of
California represented 20% while Kaiser Permanente represented 18% for the three
months ended December 31, 1999. Kaiser Permanente represented 21% while the Ohio
Department of Mental Health represented 11% of total revenues for the three
months ended December 31, 1998. No other customers exceed 10% of total revenues
in the periods presented.

    In the three months ended December 31, 1999, the Company experienced lower
license and implementation booking relative to the three months ended
December 31, 1998. The Company expects this slowdown in bookings to have a
negative impact on revenues in the next two quarters of fiscal 2000.

    In addition, at December 31, 1999, a total of 67% of accounts receivable,
66% of unbilled revenue and 72% of unearned revenue is related to Blue Shield of
California and Kaiser Permanente.

    SYSTEM SALES.  System sales revenues consist of license fees for the
Company's products, implementation and enhancement fees, and revenues associated
with reselling third-party software and hardware. System sales revenues were
$3,888,000 and $4,454,000 for the three months ended December 31, 1999 and 1998,
respectively, representing a decrease of 13%. The decrease in system sales
revenue is due primarily to lower bookings in previous quarters.

                                       7
<PAGE>
    SERVICES AND OTHER.  Services and other revenues are comprised of system
support, consulting and training revenues. Services and other revenues were
$1,282,000 and $927,000 for the three months ended December 31, 1999 and 1998,
respectively, representing an increase of 38%. The increase in services and
other revenues was due primarily to an increase in support fees resulting from
the Company's larger installed DIAMOND-REGISTERED TRADEMARK- 950C/S customer
base.

    COST OF REVENUES.  Cost of revenues was $2,742,000 and $2,203,000 for the
three months ended December 31, 1999 and 1998, respectively, representing an
increase of 24%. Cost of revenues increased from 41% of total revenues in the
three months ended December 31, 1998 to 53% of total revenues in the three
months ended December 31, 1999. No long-term trend should be implied from either
of these period to period comparisons. Costs of revenues increased primarily due
to increases in amortization expense, personnel costs and rent.

    OPERATING EXPENSES.

    GENERAL AND ADMINISTRATIVE.  General and administrative expenditures were
$1,489,000 and $1,470,000 for the three months ended December 31, 1999 and 1998,
respectively, representing an increase of 1%. General and administrative
expenditures as a percentage of total revenues for the three months ended
December 31, 1999 and 1998 were 29% and 27%, respectively. General and
administrative expenses include the salaries and benefits associated with
general management, finance and administration and allocated facilities costs.

    SALES AND MARKETING.  Sales and marketing expenditures were $861,000 and
$1,193,000 for the three months ended December 31, 1999 and 1998, respectively,
representing a decrease of 28%. Sales and marketing expenditures as a percentage
of revenues for the three months ended December 31, 1999 and 1998 were 17% and
22%, respectively. The decreases in sales and marketing expenditures during the
period were primarily due to a decrease in personnel costs, commissions and
marketing activities.

    PRODUCT DEVELOPMENT.  Product development expenditures, net of software
capitalization, were $1,936,000 and $2,052,000 for the three months ended
December 31, 1999 and 1998, respectively, representing a decrease of 6%. Product
development expenditures as a percentage of revenues for the three months ended
December 31, 1999 and 1998 was 37% and 38%, respectively. The Company believes
that product development expenditures are essential to maintaining its
competitive position and expects these costs to continue to constitute a
significant percentage of total revenues in the near future.

    The Company capitalized $361,000 and $684,000 of product development costs
in the three months ended December 30, 1999 and 1998, respectively. Capitalized
product development expenditures as a percentage of total product expenditures
were 16% and 25% for the three months ended December 31, 1999 and 1998,
respectively. The decrease in product development costs capitalized, for the
three months ended December 31, 1999, is due primarily to stage of development
of major releases. The Company begins capitalizing software development costs
upon the establishment of technological feasibility, which is established upon
the completion of a working model or, in the case of major releases, detailed
program design. Costs incurred prior to technological feasibility are charged to
expense as incurred. Capitalization ceases when the product is considered
available for general release to customers.

    INTEREST INCOME AND EXPENSE.  Interest income, net of interest expense, was
$81,000 and $112,000 for the three months ended December 31, 1999 and 1998,
respectively. The decrease in interest income, net of expense, was primarily due
to the amount of cash invested and interest paid on capital lease obligations.
Interest income represents interest earned on the Company's excess cash
balances, which are generally placed in short term investments, money market
funds, and government securities.

    PROVISION FOR INCOME TAXES.  The provision for income taxes was $14,000 and
$1,000 for the three months ended December 31, 1999 and 1998 respectively. The
increase in the provision for income taxes was due to recording higher state
taxes then in the prior comparable period.

                                       8
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

    Net cash used in operating activities was $867,000 and $302,000 during the
three months ended December 31, 1999 and 1998, respectively. The increase in
cash used by operating activities, as compared to the three months ended
December 31, 1998, resulted primarily from an increased loss,an increase in
accounts receivable and a decrease in accrued liabilities partially offset by a
decrease in unbilled revenue.

    Net cash provided by (used in) investing activities was $1,065,000 and
($833,000) during the three months ended December 31, 1999 and 1998,
respectively. The increase in cash provided by investing activities, as compared
to the three months ended December 31, 1998, consisted primarily of sales of
short-term marketable securities during the current period.

    Net cash provided by (used in) financing activities was ($62,000) and
$34,000 during the three months ended December 31, 1999 and 1998, respectively.
The increase in cash used by financing activities, as compared to the three
months ended December 31, 1998, was primarily due to repayments on a capital
lease obligation.

    As of December 31, 1999 and 1998, the Company had cash and cash equivalents
in the amounts of $4,312,000 and $8,339,000 respectively.

    The company believes that available funds and cash flows from operations and
short-term marketable securities will be adequate to fund its presently
anticipated working capital requirements for at least the next 12 months.

YEAR 2000 ISSUES

    In early fiscal 1997, the Company conducted an overall assessment of the
DIAMOND-REGISTERED TRADEMARK- products, as well as its internal computer
systems, to determine if there were any issues related to the change to the Year
2000. The Company inventoried and made inquiries of vendors, as well as tested
the DIAMOND-REGISTERED TRADEMARK- products for potential issues. Since
January 1, 2000, the company has not encountered any material issues relating to
the Year 2000. The costs associated with correcting reported issues have not
been and are not expected to be material.

    As described above, some Year 2000 issues may not be discovered until well
after January 1, 2000. The Company intends to continue to prioritize reports of
such issues and correct significant related problems.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
  1995:

    Statements in this report concerning the future results of operations,
financial condition and business of the Company are "forward-looking" statements
as defined in the Securities Act of 1933 and the Securities and Exchange Act of
1934. Investors are cautioned that information contained in these forward-
looking statements is inherently uncertain, and that actual performance and
results may differ materially due to numerous risk factors. Such risks and
uncertainties include Healthcare and Government Regulation; dependence of the
Company's results of operations on certain large customers; variability of
operating results due to the long sales cycle and implementation period of the
Company's products; the Company's dependence on a single product line; the
dynamic nature of the market in which the Company's product line competes;
development of new products and enhancements to the current product; risk of
acquisition; the Company's ability to attract and retain qualified personnel and
other risks described in the Company's other filings with the Securities and
Exchange Commission.

                                       9
<PAGE>
                           PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

<TABLE>
<S>                     <C>
                        Management Contract, dated January 13, 2000 between the
 10.32                  Registrant and 2C Solutions, LLC
 11.1                   Statement re: computation of earnings per share
 27                     Financial Data Schedule
</TABLE>

(b) Reports on Form 8-K

    No reports on Form 8-K have been filed during the quarter for which this
report is filed.

                                   SIGNATURES

    Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

<TABLE>
<S>                                                    <C>  <C>
                                                       HEALTH SYSTEMS DESIGN CORPORATION
Date: February 11, 2000
                                                       By:            /s/ ARTHUR M. SOUTHAM
                                                            -----------------------------------------
                                                                        Arthur M. Southam,
                                                              PRESIDENT AND CHIEF EXECUTIVE OFFICER

                                                       By:             /s/ STEVEN L. MOORE
                                                            -----------------------------------------
                                                                         Steven L. Moore,
                                                                   EXECUTIVE VICE PRESIDENT AND
                                                                     CHIEF FINANCIAL OFFICER
</TABLE>

                                       10
<PAGE>
                       HEALTH SYSTEMS DESIGN CORPORATION
                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
       EXHIBIT          DESCRIPTION
---------------------   -----------
<C>                     <S>
        10.32           Management Contract, dated January 13, 2000 between the
                        Registrant and 2C Solutions, LLC

        11.1            Computation of net loss per share

        27              Financial Data Schedule
</TABLE>

                                       11