UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
                                     
                                    FORM 10-Q
                                 AMENDMENT NO. 1
                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the Quarterly Period Ended March 31, 1997
                          -------------------------------

                         Commission File Number 0-26816

                             IDX SYSTEMS CORPORATION
             (Exact name of registrant as specified in its charter)

                  Vermont                                 03-0222230
         (State or other jurisdiction of              (I.R.S. Employer 
        incorporation or organization)              Identification No.)

                               1400 Shelburne Road
                           South Burlington, VT 05403
                    (Address of principal executive offices)

       Registrant's telephone number, including area code:  (802-862-1022)

         Indicate  by check mark  whether the  registrant  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).

                      Yes   X           No
                          ----             ----  
         Indicate by check mark whether the  registrant has been subject to such
filing requirements for the past 90 days.

                      Yes   X           No
                          ----             ----
 
       The number of shares outstanding of the registrant=s common stock as of
May 9, 1997 was 21,029,620.
===============================================================================
                        [Exhibit index begins on Page 16]


<PAGE>



                                  

                             IDX SYSTEMS CORPORATION
                                    FORM 10-Q
                  For the quarterly Period Ended March 31, 1997

                                TABLE OF CONTENTS

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

ITEM 1.  Interim Financial Statements:

         a) Condensed consolidated balance sheets as of
            March 31, 1997 and December 31, 1996 (unaudited)...................3

         b) Condensed consolidated statements of income for the three
            months ended March 31, 1997 and 1996 (unaudited)...................4

         c) Condensed consolidated statements of cash flows
            for the three months ended March 31, 1997 and 1996
            (unaudited)........................................................5

         d) Notes to condensed consolidated financial statements...............6

ITEM 2.  Management's discussion and analysis of financial
         condition and results of operations ..................................7

PART II. OTHER INFORMATION

ITEM 1.  Legal proceedings....................................................14

ITEM 2.  Changes in securities................................................14

ITEM 3.  Defaults upon senior securities......................................14

ITEM 4.  Submission of matters to a vote of security holders..................14

ITEM 5.  Other information....................................................14

ITEM 6.  Exhibits and reports on Form 8-K.....................................14

SIGNATURES....................................................................15

EXHIBIT INDEX.................................................................16

</TABLE>


<PAGE>



PART I...FINANCIAL INFORMATION





Item 1...Interim Financial Statements


                             IDX SYSTEMS CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)
                                   (unaudited)
                                   -----------
<TABLE>
<CAPTION>


                                     March 31           December 31
                                        1997               1996
                                        ----               ----        
<S>                                  <C>                <C>

ASSETS

Cash and securities                 $ 90,848           $ 94,554
Accounts receivable, net              42,982             39,092
Other current assets                   6,424              5,221
                                    ---------           --------
Total current assets                 140,254            138,867

Property and equipment, net           19,064             17,188

Other assets                           2,473              2,520
                                    ---------           --------

Total assets                        $161,791           $158,575
                                     =======            =======


LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable and accrued
 expenses                         $  16,838            $ 17,555
Deferred revenue                      9,120               8,951
                                   ---------           --------
Total current liabilities            25,958              26,506

Long term debt                        2,600               2,600
         
Minority interest                     2,207               2,079

Stockholders' equity                131,026             127,390
                                    -------             -------

Total liabilities and      
   stockholders' equity            $161,791            $158,575
                                    =======             =======

</TABLE>

     See Notes to the Condensed Consolidated Financial Statements


NOTE:  The balance sheet at December 31, 1996 has been derived from the audited 
financial statements at that date.





<PAGE>






Item 1.  Interim Financial Statements.


                             IDX SYSTEMS CORPORATION
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                 (Unaudited)
                                 ----------- 
<TABLE>
<CAPTION>


                                                Three Months Ended 
                                                     March 31    
                                                1997           1996
                                                ----           ----
<S>                                             <C>            <C>

REVENUES                   
Software license fees                           $17,060        $ 12,428
Maintenance and service fees                     20,713          16,780
Hardware sales                                    7,285           8,137
                                               --------        --------
Total revenues                                   45,058          37,345

OPERATING EXPENSES
Cost of license, maintenance
   and service fees                              15,933          12,779
Cost of hardware sales                            5,563           6,612
Selling, general and administrative               9,547           7,491
Research and development                          7,039           5,786
Write-off of acquired in-process
   research and development costs                 2,290
                                              ---------       --------- 
                                                 40,372          32,668

Operating income                                  4,686          4,677
Interest and other income, net                     (980)          (910)
                                                --------       --------
Income before income taxes                        5,666          5,587
Income tax provision                              2,266          2,234
                                               ---------      ---------
Net income                                     $  3,400       $  3,353
                                               ========       ========

Net income per share                           $   0.16       $   0.16
                                                =======       ========

Average shares outstanding                       21,539         21,282
                                                 ======         ======
</TABLE>


         See Notes to the Condensed Consolidated Financial Statements


<PAGE>



Item 1.  Interim Financial Statements

                             IDX SYSTEMS CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (unaudited)
                                   -----------  
<TABLE>
<CAPTION>

                                                  Three Months Ended
                                                       March 31
                                                  1997           1996
                                                  ----           ----
<S>                                               <C>            <C>   

OPERATING ACTIVITIES
Net income                                        $ 3,400        $ 3,353
Adjustments to reconcile net income to
   net cash used in operating activities:
      Depreciation and amortization.                1,539          1,123
      Increase in allowance for doubtful
        accounts                                      165             29
      Minority interest                               128            112
      Write-off of acquired in-process
         research & development costs               2,290
      Changes in operating assets and
         liabilities, net of effects of
         acquired business
             Accounts receivable                   (3,117)        (5,602)
             Prepaid expenses                      (1,106)          (327)
             Accounts payable                      (4,978)          (508)
             Accrued expenses                       2,611         (1,681)
             Federal and state taxes payable        1,349              3
             Deferred revenue                         169            211
             Other, net                              (477)           123
                                                    -----          -----

Net cash provided by (used in) operating activities 1,973         (3,164)

INVESTING ACTIVITIES
Purchase of property and equipment, net            (3,415)        (1,182)
Purchase of securities available-for-sale, net     (9,090)       (20,989)
Sale of securities available-for-sale               7,893         10,443
Purchase of certain net assets                     (2,500)   
                                                   -------       -------
Net cash used in investing activities              (7,112)       (11,728)

FINANCING ACTIVITIES
Proceeds from sale of common stock                    220          1,032
                                                  -------      ---------

Net cash provided by financing activities             220          1,032
                                                  -------      ---------
Decrease in cash and cash equivalents              (4,919)       (13,860)
Cash and cash equivalents at beginning of period   12,327         33,262
                                                   ------       --------
Cash and cash equivalents at end of period        $ 7,408        $19,402
                                                  =======        =======

</TABLE>

        See Notes to the Condensed Consolidated Financial Statements



<PAGE>

PART I.   FINANCIAL INFORMATION

Notes to Condensed Consolidated Financial Statements


Note 1 - Interim Statement Presentation

The  unaudited  consolidated  financial  statements  have been  prepared  by the
Company  pursuant to the rules and  regulations  of the  Securities and Exchange
Commission and in accordance  with  generally  accepted  accounting  principles.
Accordingly,  certain information and footnote  disclosures normally included in
annual  financial  statements have been omitted or condensed.  In the opinion of
management,  all  necessary  adjustments  have  been  made  to  provide  a  fair
presentation.  The  operating  results for the three months ended March 31, 1997
are not necessarily  indicative of the results that may be expected for the year
ending  December 31, 1997. For further  information,  refer to the  consolidated
financial  statements  and  footnotes  included in the  Company's  latest annual
report on Form 10-K.

Note 2 - Business Acquisitions

On February 26, 1997, the Company recorded  nonrecurring charges of $2.3 million
related to the acquisition of certain data model technology  from Medaphis  
HealthcareInformation  Technology  Company for cash of $2.5 million.  
The acquisition  was accounted for under the purchase method. The charges were 
expensed as  in-process research and development in connection  with the 
Company's  development of a healthcare  data model.

On March 25, 1997,  the Company  entered  into an  Agreement  and Plan of Merger
("Agreement") with PHAMIS,  Inc.  ("PHAMIS"),  a provider of acute care clinical
and hospital-based information solutions. The merger, which has been approved by
the  Boards  of  Directors  of each  company  , is  subject  to  regulatory  and
shareholder  approval.  The Agreement provides for the stockholders of PHAMIS to
receive .73 shares of the Company's Common Stock for each share of PHAMIS Common
Stock,  subject to adjustment  within a range of .68 to .80 shares of IDX Common
Stock,  based on an average  market  price per share of IDX.  Approximately  6.1
million  shares of Common  Stock of PHAMIS are  outstanding  and  subject to the
exchange.  Management expects that the merger, if consummated, will be accounted
for under the pooling of interests method.

Note 3 - Earnings Per Share Information

In February 1997, the Financial  Accounting Standards Board issued Statement No.
128,  EARNINGS PER SHARE,  which is required to be adopted on December 31, 1997.
At that time,  the Company will be required to change the method  currently used
to compute  earnings per share and to restate all prior  periods.  Under the new
requirements for calculating  primary earnings per share, the dilutive effect of
stock options will be excluded.  The impact of Statement 128 on the  calculation
of  primary  and fully  diluted  earnings  per share for these  quarters  is not
expected to be material.

Note 4 - Reclassifications

Certain  prior  period  amounts have been  reclassified  to conform with current
period presentations.


<PAGE>

PART I.   FINANCIAL INFORMATION


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


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

GENERAL
-------
This Management's Discussion and Analysis of Financial Conditions and Results of
Operations  includes a number of  forward-looking  statements  which reflect the
Company's current views with respect to future events and financial performance.
These forward-looking  statements are subject to certain risks and uncertainties
including  those  discussed  below that  could  cause  actual  results to differ
materially  from  historical  results  or those  anticipated.  The  Company  has
identified by italics,  various  sentences  within this  Quarterly  Report which
contain such  forward-looking  statements,  and words such as "believes," "may,"
"plans,"  "anticipates,"  "expects,"  "intends,"  and  similar  expressions  are
intended to identify forward-looking statements, but are not the exclusive means
of identifying  such statements.  In addition,  the disclosures on page 10 under
the caption  "Factors  Affecting  Future  Results,"  which is not italicized for
improved  readability,  consists  principally of a discussion of risks which may
affect  future  results  and, are thus,  in their  entirety  forward-looking  in
nature.  Readers  are  urged  to  carefully  review  and  consider  the  various
disclosures  made by the  Company  in this  report  and in the  Company's  other
reports filed with the Securities and Exchange Commission that attempt to advise
interested  parties  of the risks and  factors  that may  affect  the  Company's
business.

RESULTS OF OPERATIONS
---------------------
THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996.

REVENUES
The  Company's  total  revenues  increased  to $45.1  million in the first three
months ended March 31, 1997 from $37.3  million in the  corresponding  period in
1996, an increase of $7.8 million or 20.6%.  Revenues from software license fees
increased to $17.1  million  during the three months ended March 31, 1997 (37.8%
of  total  revenues)  from  $12.4  million  (33.3%  of  total  revenues)  in the
corresponding period in 1996, an increase of $4.7 million or 37.2%. The increase
was  primarily due to an increase in  installations  of certain of the Company's
software  products from its  Ambulatory  Suite.  Revenues from  maintenance  and
service fees  increased to $20.7 million during the three months ended March 31,
1997 (46.0% of total  revenues) from $16.8 million (44.9% of total  revenues) in
the  corresponding  period in 1996,  an increase of $3.9  million or 23.4%.  The
increase in revenues from  maintenance  and service fees was due  principally to
additional  maintenance  revenues  resulting  from the  continued  growth in the
Company's  installed client base.  Hardware  revenues  decreased to $7.3 million
during the three months ended March 31, 1997 (16.2% of total revenues) from $8.1
million  (21.8%  of total  revenues)  in the  corresponding  period  in 1996,  a
decrease  of $.8  million  or 10.5%.  The  decrease  in  hardware  revenues  was
principally due to a decline in customer  hardware  upgrades in 1997 compared to
1996. The Company anticipates the level of hardware sales will vary considerably
from period to period and not  necessarily  in a  consistent  relationship  with
other revenue.

COST OF LICENSE, MAINTENANCE AND SERVICE FEES
The cost of license,  maintenance  and service fees  increased to $15.9  million
during  the  three  months  ended  March  31,  1997 from  $12.8  million  in the
corresponding  period in 1996,  an 

<PAGE>

PART I.   FINANCIAL INFORMATION

increase of $3.1 million or 24.7%.  The gross profit margin on license, 
maintenance and service fees increased to 57.8% during the three months ended 
March 31, 1997 from 56.2% in the corresponding  period in 1996. The increase 
in gross profit was due primarily to the increase in software
license fees as a percentage to total revenue.

COST OF HARDWARE SALES
The cost of hardware  sales  decreased to $5.6  million  during the three months
ended March 31, 1997 from $6.6  million in the  corresponding  period in 1996, a
decrease of $1.0  million or 15.9%.  The gross profit  margin on hardware  sales
increased to 23.6% of hardware  revenues during the three months ended March 31,
1997,  from  18.7%  in the  corresponding  period  in  1996.  The  increase  was
principally  due to the  sale  of  higher  margin  hardware  configurations  and
hardware  operating  systems during the quarter ended March 31, 1997. THIS GROSS
PROFIT MARGIN TREND IS NOT ANTICIPATED TO CONTINUE IN THE FUTURE.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling,  general and  administrative  expenses increased to $9.6 million during
the three  months  ended March 31, 1997 from $7.5  million in the  corresponding
period in 1996,  an increase of $2.1 million or 27.4%.  As a percentage of total
revenues, selling, general and administrative expenses increased to 21.2% during
the three months ended March 31, 1997 from 20.1% in the corresponding  period in
1996. The increase in selling,  general and  administrative  expenses during the
three  months  ended  March 31, 1997 was  principally  due to an increase in the
Company's sales and marketing staff.

RESEARCH AND DEVELOPMENT
Research and  development  expenses  increased to $7.0 million  during the three
months  ended March 31, 1997 from $5.8  million in the  corresponding  period in
1996, an increase of $1.2 million or 21.7%.  The increase was due to an increase
of staff and  outside  consultants  to support  the  development  of  additional
products  for the  Company.  As a  percentage  of total  revenues,  research and
development  expenses  increased slightly to 15.6% during the three months ended
March 31, 1997 compared to 15.5% in the corresponding period in 1996.

WRITE-OFF OF ACQUIRED IN-PROCESS RESEARCH AND DEVELOPMENT COSTS
On February 26, 1997, the Company recorded  nonrecurring charges of $2.3 million
related to the  acquisition  of  certain  data model  technology  from  Medaphis
Healthcare  Information  Technology  Company  for  cash  of  $2.5  million.  The
acquisition  was  accounted  for under the  purchase  method.  The charges  were
expensed as in-process research and development in connection with the Company's
development of a healthcare data model.

SIGNIFICANT AGREEMENTS
On March 25, 1997,  the Company  entered  into an  Agreement  and Plan of Merger
("Agreement") with PHAMIS,  Inc.  ("PHAMIS"),  a provider of acute care clinical
and hospital-based information solutions. The merger, which has been approved by
the  Boards  of  Directors  of each  company  , is  subject  to  regulatory  and
shareholder  approval.  The Agreement provides for the stockholders of PHAMIS to
receive .73 shares of the Company's Common Stock for each share 
of PHAMIS Common Stock, subject to adjustment within a range of .68 to .80 
shares of IDX Common Stock,  based on an average  market  price per share of 
IDX.  Approximately  6.1 million  shares of Common  Stock of PHAMIS are  
outstanding  and  subject to the exchange.  Management expects that the merger,
if consummated, will be accounted for under the pooling of interests method.

<PAGE>

PART I.   FINANCIAL INFORMATION


LIQUIDITY AND CAPITAL RESOURCES
Since its  inception  in 1969,  the Company has funded its  operations,  working
capital needs and capital  expenditures  primarily from  operations,  except for
real estate owned by certain partnerships and trusts financed through industrial
development bonds.

Cash  flows  from  operations  are  principally  comprised  of  net  income  and
depreciation  and are  primarily  affected  by the net  effect of the  change in
accounts payable and accrued  expenses.  Due to the seasonality of the Company's
business,  accounts receivable,  deferred revenue and accounts payable fluctuate
considerably  but almost  completely due to the volume of business and timing of
the  recognition  of  revenue.  Accounts  receivable  from  customers  have been
collected consistently within 90 days.

Cash flows related to investing  activities have principally been related to the
purchase of  computer  and office  equipment,  leasehold  improvements,  and the
purchase and sale of investment grade marketable securities.  MANAGEMENT EXPECTS
THESE ACTIVITIES TO CONTINUE. INVESTING ACTIVITIES MAY ALSO INCLUDE ACQUISITIONS
OF COMPLEMENTARY PRODUCTS, TECHNOLOGIES AND BUSINESSES.

Cash and cash  equivalents  at March 31, 1997 were $7.4  million,  a decrease of
$4.9 million from December 31, 1996. The majority of the decrease was due to the
purchase of investment grade marketable securities.  The Company has a revolving
line of credit with a bank  allowing  the  Company to borrow up to $2.0  million
bearing  interest at the prime rate.  There were no  borrowings  as of March 31,
1997 or 1996.

THE COMPANY EXPECTS THAT ITS REQUIREMENTS FOR OFFICE FACILITIES AND OTHER OFFICE
EQUIPMENT WILL GROW AS STAFFING  REQUIREMENTS  DICTATE.  The Company's operating
lease  commitments  consist  primarily  of  office  leasing  for  the  Company's
operating facilities. THE COMPANY PLANS TO CONTINUE INCREASING THE NUMBER OF ITS
PROFESSIONAL  STAFF DURING 1997 TO MEET ANTICIPATED  SALES VOLUME AND TO SUPPORT
RESEARCH AND DEVELOPMENT  EFFORTS.  TO THE EXTENT NECESSARY TO SUPPORT INCREASES
IN STAFFING, IDX INTENDS TO OBTAIN ADDITIONAL OFFICE SPACE.

THE COMPANY BELIEVES THAT CURRENT  OPERATING FUNDS WILL BE SUFFICIENT TO FINANCE
ITS OPERATING  REQUIREMENTS AT LEAST THROUGH  DECEMBER 1997. To date,  inflation
has not had a material impact on the Company's revenues or income.

INCOME TAXES
FOR THE  FORESEEABLE  FUTURE,  THE COMPANY  ANTICIPATES  AN EXPECTED TAX RATE OF
APPROXIMATELY 40% OF PRE-TAX INCOME.

NEW ACCOUNTING STANDARDS

In February 1997, the Financial  Accounting Standards Board issued Statement No.
128,  EARNINGS PER SHARE,  which is required to be adopted on December 31, 1997.
At that time,  the Company will be required to change the method  currently used
to compute  earnings per share and to restate all prior  periods.  Under the new
requirements for calculating  primary earnings per share, the dilutive effect of
stock options will be excluded.  THE IMPACT OF STATEMENT 128 ON THE  CALCULATION
OF  PRIMARY  AND FULLY  DILUTED  EARNINGS  PER SHARE FOR THESE  QUARTERS  IS NOT
EXPECTED TO BE MATERIAL.


<PAGE>

PART I.   FINANCIAL INFORMATION


During 1997, the American  Institute of Certified Public Accountants is expected
to issue a Standard Operating  Procedure ("SOP") revising certain aspects of SOP
91-1.  BASED UPON THE CURRENT  VERSION OF THE PROPOSED SOP, THE COMPANY DOES NOT
EXPECT ADOPTION WILL  MATERIALLY  AFFECT ITS REVENUE  RECOGNITION  POLICIES WITH
RESPECT TO SOFTWARE LICENSE FEES WHICH ARE PRINCIPALLY  RECOGNIZED IN CONNECTION
WITH THE  FULFILLMENT  OF CONTRACTUAL  OBLIGATIONS  BASED UPON  ACHIEVEMENTS  OF
MILESTONES. THE EXPECTED ISSUE DATE IS CURRENTLY NOT KNOWN.

FACTORS AFFECTING FUTURE RESULTS
As announced on March 25, 1997,  the Company and PHAMIS,  Inc.  ("PHAMIS")  have
agreed to merge in the third quarter of 1997 (the "Merger"). IDX and PHAMIS each
have similar  operations  involving the  creation,  sale and support of computer
systems for healthcare clients. Such operations differ primarily with respect to
the nature of each of IDX's and  PHAMIS's  clientele  and product  technologies.
Integrating  the operations  (including  product  development,  installation  of
information  and  software  systems,   client  services,   marketing  plans  and
activities, employee hiring and training, and expansion strategy) and management
of the two  companies  will be a  time-consuming  process,  and  there can be no
assurance  that this  integration  will result in the  achievement of any of the
anticipated  synergies  and other  benefits  expected  to be  realized  from the
Merger.  In addition,  any required  divestitures of assets or other commitments
required by the Federal  Trade  Commission  could limit the  synergies and other
benefits expected. Moreover, the integration of these organizations will require
the dedication of management resources, which may temporarily distract attention
from the  day-to-day  business of the Company.  The  inability of  management to
successfully integrate the operations of the two companies could have a material
adverse  effect on the business and operating  results of the  operations of IDX
and PHAMIS after the Merger (the  "Combined  Company").  The Company  expects to
incur Merger related pre-tax charges covering the costs of the Merger, the costs
of  restructuring  the  combined   operations,   and  for  other  related  costs
principally  in the  quarter  in which  the  Merger is  consummated.  Additional
unanticipated expenses may be incurred in connection with the integration of the
business of the Company and PHAMIS.

The Company's revenues and operating results can vary significantly from quarter
to quarter as a result of a number of factors,  including  the volume and timing
of systems sales and installations,  and length of sales cycles and installation
efforts.  The timing of revenues  from  systems  sales is  difficult to forecast
because the Company's  sales cycle can vary  depending  upon factors such as the
size of the  transaction,  the  changing  business  plans of the  customer,  the
effectiveness  of customer's  management,  and general economic  conditions.  In
addition,   because   revenue  is  recognized  at  various   points  during  the
installation  process,  the timing of revenue  recognition  varies  considerably
based on a number of factors, including availability of personnel,  availability
of the  customer's  resources  and  complexity  of the  needs of the  customer's
organization. The Company's initial contact with a potential customer depends in
significant part on the customer's decision to replace, expand, or substantially
modify its existing  information systems, or modify or add business processes or
lines of business. How and when to implement,  replace,  expand or substantially
modify an  information  system or modify or add  business  processes or lines of
business,  are major decisions for health care organizations.  Accordingly,  the
sales cycle for the  Company's  systems is typically  three to 18 months or more
from contract  execution to completion of  installation.  During the sales cycle
and the installation  cycle, the Company expends  substantial  time,  effort and
funds preparing  contract  proposals,  negotiating the contract and implementing
the system.  Because a  significant  percentage  of the  Company's  expenses are
relatively  fixed,  a variation in the timing of systems sales and  installation
can cause  significant  

<PAGE>

PART I.   FINANCIAL INFORMATION

variations in operating results from quarter to quarter. The Company's  future
operating  results may fluctuate as a result of these and other  factors,  
such as  customer  purchasing  patterns,  and the timing of new product and 
service introductions and product upgrade releases.

The Company's revenues have historically followed seasonal patterns with a lower
level  of  sales  and  installations  occurring  in the  fiscal  quarter  ending
September  30 and a greater  level of sales and  installations  occurring in the
fiscal quarter ending June 30 (formerly the fiscal year end of the Company). The
Company  believes that such seasonal  fluctuation is attributable to a number of
factors,  including  the vacation  schedules of its clients.  The Company is not
able to predict what impact,  if any, the change will have on the seasonality of
the  Company's  business.   The  Company  believes  that  quarterly  results  of
operations will continue to be subject to significant  fluctuations and that its
results of  operations  for any  particular  quarter  or fiscal  year may not be
indicative  of  results  of  operations  for  future  periods.  There  can be no
assurance that future seasonal and quarterly fluctuations will continue and will
not have a material  adverse  effect on the  Company's  results  of  operations,
financial condition or business.

The stock market has,  from time to time,  experienced  extreme price and volume
fluctuations,  particularly in the high  technology and health care  information
technology sectors, which have often been unrelated to the operating performance
of particular companies. The Company experiences fluctuations in its stock price
related to these general market swings as well as announcements of technological
innovations, new product introductions by the Company or its competitors, market
conditions in the computer software or hardware industries and healthcare reform
measures.  These  fluctuations  could  have a  significant  impact on the future
market price of the Company's Common Stock.

As a developer of information  systems, the Company must anticipate and adapt to
evolving industry standards and new technological  developments.  The market for
the Company's  products is  characterized  by continued and rapid  technological
advances  in  both  hardware  and  software   development,   requiring   ongoing
expenditures  for research and  development  and the timely  introduction of new
products and enhancements to existing  products.  The establishment of standards
is largely a function of user acceptance.  Therefore, such standards are subject
to change.  The Company's future success will depend in part upon its ability to
enhance its existing products,  to respond effectively to technology changes, to
migrate  its clients to new  technologies,  to sell  additional  products to its
existing client base and to introduce new products and  technologies to meet the
evolving needs of its clients in the health care information systems market. The
Company is currently  devoting  significant  resources toward the development of
enhancements to its existing  products and the migration of existing products to
new hardware and software platforms.  There can be no assurance that the Company
will  successfully  complete the development of these products or this migration
in a timely  fashion  or that the  Company's  current  or future  products  will
satisfy the needs of the health care information systems market.  Further, there
can be no assurance that products or  technologies  developed by others will not
adversely  affect the Company's  competitive  position or render its products or
technologies noncompetitive or obsolete.

The Company  currently  derives a  significant  percentage  of its revenues from
sales of financial and administrative  information systems and related services.
As a result, any factor adversely affecting sales of these products and services
could have a material  adverse  effect on the Company's  results of  operations,
financial condition or business. Although the Company has 

<PAGE>

PART I.   FINANCIAL INFORMATION


experienced increasing annual sales, revenues associated with existing products 
may decline as a result of several factors, including price competition.  
There can be no assurance that the Company will continue to be successful in 
marketing its current  products or any new or enhanced products or maintaining 
the current pricing for its existing products.

Certain of the Company's  products provide  applications  that relate to patient
medical histories and treatment plans. Any failure by the Company's  products to
provide  accurate,  secure  and  timely  information  could  result  in  product
liability  claims  against  the Company by its  clients or their  affiliates  or
patients.  The  Company  maintains  insurance  that it  believes  is adequate to
protect against claims associated with the use of its products, but there can be
no  assurance  that its  insurance  coverage  would  adequately  cover any claim
asserted against the Company.  A successful claim brought against the Company in
excess of its insurance  coverage  could have a material  adverse  effect on the
Company's  results  of  operations,   financial  condition  or  business.   Even
unsuccessful  claims could result in the expenditure of funds in litigation,  as
well as diversion of management  time and  resources.  There can be no assurance
that the  Company  will not be subject to product  liability  claims,  that such
claims will not result in liability in excess of its insurance  coverage or that
the Company's  insurance  will cover such claims or that  appropriate  insurance
will  continue  to be  available  to the  Company in the future at  commercially
reasonable rates.

The  success of the  Company is  dependent  to a  significant  degree on its key
management,  sales and marketing,  and technical personnel. The Company believes
that its continued  future success will also depend upon its ability to attract,
motivate  and  retain  highly  skilled,  managerial,  sales and  marketing,  and
technical  personnel,  including  software  programmers  and systems  architects
skilled in the  computer  languages  in which the  Company's  products  operate.
Competition  for  such  personnel  in  the  software  and  information  services
industries is intense.  The loss of key  personnel,  or the inability to hire or
retain  qualified  personnel,  could  have  a  material  adverse  effect  on the
Company's results of operations,  financial condition or business.  Although the
Company  has  been  successful  to  date in  attracting  and  retaining  skilled
personnel,  there can be no  assurance  that the  Company  will  continue  to be
successful in attracting and retaining the personnel it requires to successfully
develop  new  and  enhanced  products  and  to  continue  to  grow  and  operate
profitably.

The health care industry in the United States is subject to changing  political,
economic and regulatory influences that may affect the procurement practices and
operations of health care organizations.  The Company's products are designed to
function  within the structure of the health care  financing  and  reimbursement
system currently being used in the United States. During the past several years,
the health care industry has been subject to increasing  levels of  governmental
regulation  of,  among other  things,  reimbursement  rates and certain  capital
expenditures.  From time to time,  certain  proposals  to reform the health care
system have been  considered  by  Congress.  These  proposals,  if enacted,  may
increase  government  involvement in health care, lower  reimbursement rates and
otherwise  change the operating  environment for the Company's  clients.  Health
care organizations may react to these proposals and the uncertainty  surrounding
such proposals by curtailing or deferring  investments,  including those for the
Company's  products and services.  The Company cannot predict with any certainty
what impact,  if any,  such  proposals or health care reforms  might have on its
results of operations, financial condition or business.


<PAGE>

PART I.   FINANCIAL INFORMATION


The U.S. Food and Drug Administration (the "FDA") has promulgated a draft policy
for the  regulation of certain  computer  software  products as medical  devices
under the 1976 Medical Device  Amendments to the Federal Food, Drug and Cosmetic
Act (the "FDC Act") and has  recently  indicated it may modify such draft policy
or create a new policy. To the extent that computer software is a medical device
under  the  policy,  the  manufacturers  of such  products  could  be  required,
depending on the product,  to (i) register and list their products with the FDA,
(ii) notify the FDA and demonstrate substantial equivalence to other products on
the market  before  marketing  such  products,  or (iii)  obtain FDA approval by
demonstrating  safety and effectiveness before marketing a product. In addition,
such products  would be subject to FDC Acts general  controls,  including  those
relating  to good  manufacturing  practices  and adverse  experience  reporting.
Although it is not  possible to  anticipate  the final form of the FDA's  policy
with regard to computer  software,  the Company expects that, whether or not the
draft is finalized or changed,  the FDA is likely to become  increasingly active
in  regulating  computer  software  that  is  intended  for use in  health  care
settings.   The  FDA  can  impose  extensive  requirements  governing  pre-  and
post-market  conditions such as device  investigation,  approval,  labeling and
manufacturing.  In addition, the FDA can impose extensive requirements governing
development controls and quality assurance processes.  There can be no assurance
that actions taken by the FDA to regulate  computer  software  products will not
have a material adverse effect on the Company's results of operations, financial
condition or business.

The  Company  intends  to  continue  to  grow in part  through  acquisitions  of
complementary   products,   technologies   and   businesses  or  alliances  with
complementary  businesses.  The Company's ability to expand successfully through
acquisitions  or alliances  depends on many factors,  including  the  successful
identification  and  acquisition  of products,  technologies  or businesses  and
management's  ability to  effectively  integrate  and  operate  the  acquired or
aligned products,  technologies or businesses.  There is significant competition
for  acquisition  and  alliance  opportunities  in the health  care  information
systems  industry,  which may  intensify due to  consolidation  in the industry,
thereby increasing the costs of capitalizing on such opportunities.  The Company
competes for  acquisition and alliance  opportunities  with other companies that
have significantly greater financial and management  resources.  There can be no
assurance  that the Company will be successful in acquiring or aligning with any
complementary products,  technologies or businesses;  or, if acquired or aligned
with, that the Company will be able to successfully integrate any such products,
technologies or businesses into its current business and operations. The failure
to successfully  integrate any significant products,  technologies or businesses
could have a material  adverse  effect on the Company's  results of  operations,
financial condition or business.

Because of these and other  factors,  past financial  performance  should not be
considered  an  indicator  of  future  performance.  Investors  should  not  use
historical trends to anticipate future results.



<PAGE>



PART II. OTHER INFORMATION




Item 1.  LEGAL PROCEEDINGS

                  None.


Item 2.  CHANGES IN SECURITIES

                  None.


Item 3.  DEFAULTS UPON SENIOR SECURITIES

                  Not applicable.


Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                  None.


Item 5.  OTHER INFORMATION

                  None.


Item 6.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, & REPORTS ON FORM 8-K

                  (a) The exhibits filed as part of this Form 10-Q are listed on
the Exhibit Index  immediately  preceding such exhibits,  which Exhibit Index is
incorporated herein by reference.

                  (b) No Current  Reports on Form 8-K were filed by the Company
during the last quarter of the period covered by this report; however, the 
Company filed a Reporton Form 8-K on April 3, 1997 in connection with an 
Agreement and Plan of Merger with PHAMIS, Inc. No financial statements were 
filed with such report.


<PAGE>



SIGNATURES






SIGNATURES

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

                                            IDX SYSTEMS CORPORATION


Date:    May 13, 1997                        By:/s/ JOHN A. KANE
                                                _______________________________
                                                John A. Kane,
                                                Vice President, Finance and
                                                Administration, Chief Financial
                                                Officer and Treasurer
                                                (Principal Financial and
                                                Accounting Officer)




<PAGE>



EXHIBIT INDEX






                                  Exhibit Index
                                  -------------
         The following  exhibits are filed as part of this  Quarterly  Report on
Form 10-Q:

<TABLE>
<CAPTION>

Exhibit No.       Description                                              Page
-----------       -----------                                              ----
<S>               <C>                                                      <C>

11                Statement regarding computation of per share earnings.   17



</TABLE>





<PAGE>





                                   EXHIBIT 11

                             IDX SYSTEMS CORPORATION
                        SCHEDULES OF NET INCOME PER SHARE
                    (IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
<TABLE>
<CAPTION>


                                    Primary                    Fully Diluted
                            ------------------------     -----------------------
                                  THREE MONTHS                 THREE MONTHS 
                                 ENDED MARCH 31,              ENDED MARCH 31,
                              1997              1996     1997               1996
                            ------------------------     -----------------------
<S>                          <C>              <C>         <C>             <C>
     
Weighted average shares
   outstanding               21,002           20,409      21,002          20,409

Netdilutive effect of stock
  options-based  on the 
  treasury stock method 
  using the average price 
  for primary and ending
  price, if higher,for 
  fully diluted                537               873        537              873

                           --------------------------     ----------------------
Total shares                21,539            21,282     21,539           21,282
                            ========================     =======================

Net income                  $3,400            $3,353     $3,400           $3,353
                             =====             =====      =====            =====
Net income per share       $  0.16           $  0.16    $  0.16          $  0.16
                             =====             =====      =====            =====

</TABLE>