================================================================================
                                 
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------

                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 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
November 12, 1997 was 25,907,723.

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                        [Exhibit index begins on Page 16]
                                                      --

<PAGE>

                                                  

                             IDX SYSTEMS CORPORATION
                                    FORM 10-Q
                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997

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

ITEM 1. Interim Financial Statements:

        a) Condensed consolidated balance sheets as of
           September 30, 1997 and December 31, 1996 (unaudited).............3

        b) Condensed consolidated statements of income for the three
           and nine months ended September 30, 1997 and 1996
           (unaudited)......................................................4

        c) Condensed consolidated statements of cash flows for
           the nine months ended September 30, 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.................................9

PART II. OTHER INFORMATION

ITEM 1. Legal proceedings..................................................18

ITEM 2. Changes in securities..............................................18

ITEM 3. Defaults upon senior securities....................................18

ITEM 4. Submission of matters to a vote of security holders................18

ITEM 5. Other information..................................................19

ITEM 6. Exhibits and reports on Form 8-K...................................19

SIGNATURES.................................................................20

EXHIBIT INDEX..............................................................21

                                  Page 2 of 23
</TABLE>
<PAGE>


PART I...FINANCIAL INFORMATION

Item 1...Interim Financial Statements 


                             IDX SYSTEMS CORPORATION
                              FINANCIAL HIGHLIGHTS
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                              SEPTEMBER 30        DECEMBER 31
                                                 1997                1996
                                                 ----                ----
<S>                                           <C>                 <C>

ASSETS
Cash and securities                           $ 120,947           $ 113,391
Accounts receivable, net                         54,043              49,115
Other current assets                              6,769               7,244
                                              ---------           ---------
TOTAL CURRENT ASSETS                            181,759             169,750

Property & equipment, net                        26,643              22,233
Capitalized software costs, net                     385               5,120
Other assets                                      6,890               5,219
                                              ---------           ---------
                                                 33,918              32,572
                                              ---------           ---------


TOTAL ASSETS                                   $215,677           $ 202,322
                                              =========           =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued
  expenses                                     $ 20,945            $ 21,309
Deferred revenue                                 23,754              16,541
                                               --------            --------
TOTAL CURRENT LIABILITIES                        44,699              37,850


Deferred income taxes                             2,745               1,191
Long term debt                                    2,500               2,651
Minority interest                                 2,027               2,080
Stockholders' equity                            163,706             158,550
                                               --------             -------
                                                170,978             164,472
                                               --------             -------
TOTAL LIABILITIES AND
  STOCKHOLDERS' EQUITY                         $215,677           $ 202,322
                                              =========           =========
</TABLE>

          See Notes to the Condensed Consolidated Financial Statements


                                  Page 3 of 23
<PAGE>


Item 1.  Interim Financial Statements. 


                             IDX SYSTEMS CORPORATION
                              FINANCIAL HIGHLIGHTS

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                    (IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                               THREE MONTHS ENDED            NINE MONTHS ENDED
                                 SEPTEMBER 30                   SEPTEMBER 30
                               1997             1996         1997         1996
                               ----             ----         ----         ----
<S>                            <C>              <C>          <C>          <C>

REVENUES
Systems sales                  $34,703         $26,456     $98,029     $ 81,924
Maintenance and service fees    29,895          24,946      83,560       70,180
                               -------         -------     -------      --------
TOTAL REVENUES                  64,598          51,402     181,589      152,104

OPERATING EXPENSES
Cost of sales                   33,612          27,162      94,637       79,767
Selling, general, and 
   administrative               12,541          11,474      37,847       33,298
Research and development         9,271           7,357      26,356       22,185
Write-off of acquired research  
  and development costs                                      2,290            
Merger and related costs        20,030                      20,030          292
                                ------          ------     -------      -------
TOTAL OPERATING EXPENSES        75,454          45,993     181,160      135,542


Operating income (loss)        (10,856)          5,409         429       16,562
Other (income) expense          (1,480)         (1,288)     (4,154)      (3,477)
                               --------         -------     -------      -------

Income (loss) before income 
  taxes                         (9,376)          6,697       4,583       20,039

Income tax provision 
  (benefit)                     (2,021)          2,597       3,566        7,908
                                -------        -------      ------      --------
NET INCOME (LOSS)             $ (7,355)     $    4,100   $   1,017     $ 12,131
                              =========     ==========   =========     =========

NET INCOME (LOSS) PER SHARE   $  (0.28)     $     0.16   $    0.04     $   0.48
                              =========     ==========   =========     =========


Weighted average shares 
  outstanding                   26,506          26,096      26,407       26,032
                             =========      ==========   =========     =========
</TABLE>
          See Notes to the Condensed Consolidated Financial Statements

                                  Page 4 of 23
<PAGE>


Item 1...Interim Financial Statements 


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

                                                           NINE MONTHS ENDED
                                                              SEPTEMBER 30
                                                           1997         1996
                                                           ----         ----
<S>                                                        <C>          <C>

OPERATING ACTIVITIES
Net income                                               $  1,017    $  12,131
Adjustments to reconcile net income to net
  cash provided by operating activities:
   Depreciation and amortization                            5,875        5,413
   Increase in allowance for doubtful accounts                422          125
   Minority interest                                          (52)         440
   Write-off of acquired in-process research and
      development costs                                     2,290         --
   Write-off of capitalized software costs and equipment
      in connection with merger                             7,406         --
   Changes in operating assets and liabilities:
             Accounts receivable                           (5,350)     (10,116)
             Prepaid expenses                                 188         (115)
             Accounts payable                              (3,498)       1,654
             Accrued expenses                              11,557        4,150
             Federal and state taxes payable              (10,994)         112
             Deferred revenue                               7,213        2,268
             Short-term debt                                2,571         --
             Other, net                                     1,318         (112)
                                                          --------    ---------
Net cash provided by operating activities                  19,963       15,950

INVESTING ACTIVITIES
Purchase of property and equipment, net                   (10,524)      (6,798)
Purchase of securities available-for-sale, net            (76,111)    (116,119)
Sale of securities available-for-sale                      76,226       82,570
Capitalized software development costs                     (2,433)      (2,573)
Other investment and advances                                (940)      (1,104)
Purchase of certain net assets                             (2,500)        --
                                                         ---------    ---------
Net cash used in investing activities                     (16,282)     (44,024)

FINANCING ACTIVITIES
Proceeds from sale of common stock                          4,073        4,905
Payments on long-term debt related to real estate            (151)        (442)
Net change in note payable to bank                           --           (209)
                                                         ---------    ---------
Net cash provided by financing activities                   3,922        4,254
                                                         ---------    ---------

Increase (decrease) in cash and cash equivalents            7,603      (23,820)     
Cash and cash equivalents at beginning of period           12,327       37,750                                 
                                                         --------     --------
Cash and cash equivalents at end of period              $  19,930    $  13,930
                                                        =========    =========

</TABLE>

          See Notes to the Condensed Consolidated Financial Statements


                                  Page 5 of 23
<PAGE>


Notes to Condensed Consolidated Financial Statements


Note 1 - Basis of Presentation

All  financial  information  for  previously  reported  periods  included in the
accompanying  interim unaudited condensed  consolidated  financial statements of
IDX Systems  Corporation  ("Company"  or "IDX") has been restated to reflect the
combined  operations  of IDX and  PHAMIS,  Inc.  ("PHAMIS")  as a result  of the
merger,  more  fully  described  in Note 2,  which has been  accounted  for as a
pooling of interests in the quarter ended  September  30, 1997.  No  adjustments
were required to conform the financial  reporting policies of IDX and PHAMIS for
the periods presented.

The interim 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 nine months ended September 30, 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 July 10, 1997 (the  "Closing  Date"),  pursuant to an  Agreement  and Plan of
Merger  dated as of March 25,  1997 (the  "Merger  Agreement")  by and among IDX
Systems Corporation,  a Vermont corporation,  Penguin Acquisition Corporation, a
Washington  corporation  and  wholly-owned  subsidiary  of IDX  ("Penguin")  and
PHAMIS, Inc., a Washington corporation, IDX acquired PHAMIS by means of a merger
(the  "Merger") of Penguin with and into  PHAMIS,  with PHAMIS  remaining as the
surviving  corporation in the Merger. As a result of the Merger, PHAMIS became a
wholly-owned  subsidiary of IDX. PHAMIS offers healthcare  information solutions
that are part of a complete  software and hardware  system  strategy  design for
integrated  healthcare delivery  enterprises.  Penguin was formed solely for the
purpose of effecting the Merger.

Pursuant to the Merger Agreement,  each outstanding share of PHAMIS Common Stock
was  converted  into  .73 of a  share  of  IDX  Common  Stock.  Based  upon  the
capitalization  of PHAMIS as of the Closing Date, IDX issued  approximately  4.6
million shares of IDX Common Stock to former PHAMIS  stockholders in the Merger.
No fractional shares were issued in the Merger.  PHAMIS  stockholders  otherwise
entitled  to  receive a fraction  of a share of IDX  Common  Stock in the Merger
instead  received  an amount of cash equal to such  fraction  multiplied  by the
price per share of IDX Common Stock on the Nasdaq national  Market,  as reported
by Nasdaq,  on the business day  immediately  preceding  the Closing  Date.  The
Merger  was  accounted  for as a  pooling  of  interests  in the  quarter  ended
September 30, 1997. All previously  reported  operating results of IDX have been
restated to reflect the combined operations of IDX and PHAMIS.

                                  Page 6 of 23
<PAGE>


All options to purchase PHAMIS Common Stock outstanding immediately prior to the
Merger were  effectively  assumed by IDX pursuant to the Merger  Agreement.  IDX
registered on a Registration  Agreement on Form S-8 approximately 865,568 shares
of IDX Common Stock for issuance  upon the  exercise of stock  options  formerly
exercisable  for shares of PHAMIS Common Stock and in connection with the PHAMIS
Salary Savings and Deferral Plan.

Separate  results of the  combining  entities  for the six months ended June 30,
1997 and 1996 are as follows:

<TABLE>
<CAPTION>
                                      (In thousands)
                                       (Unaudited)
 
                                 1997              1996
                                 ----              ----
    <S>   <C>                    <C>               <C>
    Net revenues:
          IDX                    $  92,606         $  76,427
          PHAMIS                    24,486            24,275
                                 ----------        ----------
          Combined               $ 117,092         $ 100,702
                                 =========         =========


    Net income (loss):
          IDX                    $   8,417         $   7,209
          PHAMIS                       (44)              822
                                 ----------        ---------
          Combined               $   8,373         $   8,031
                                 =========         =========


    Net income (loss) 
    per share:
          IDX                    $     .39        $      .34
          PHAMIS                      (.01)              .13
                                 
          Combined                     .32               .31
                                       
</TABLE>

On February 26, 1997, the Company  recorded  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.

Note 3 - Merger and Related Costs

During the third quarter ended September 30, 1997, the Company  recorded charges
of $20.0 million  related to the merger with PHAMIS.  The charges were comprised
of transaction costs of $6.8 million, long-lived assets, principally capitalized
software  development  costs and equipment,  write-offs and  adjustments of $7.4
million, attributable to the elimination of overlapping products and operations,
employee termination and related costs of $3.6 million, and other merger related
costs of $2.2 million,  principally related to integration costs incurred during
the period and the termination of leases and other contractual obligations.


                                  Page 7 of 23
<PAGE>


At September 30, 1997,  accounts  payable and accrued  expenses  include accrued
costs of $4.3 million related to the termination of employees,  leases and other
contractual  obligations,  substantially  all of which  will be paid  within one
year.  The write-off of long-lived  assets is not expected to materially  affect
amortization  and  depreciation of future reporting  periods.  In addition,  the
provision for termination of employees, leases and other contractual obligations
is not expected to materially affect selling, general and administrative expense
of future  periods.  Management  does not  expect to incur  significant  charges
related to the merger in subsequent reporting periods.

Note 4 - Income Taxes

The  provision  for income taxes for the quarter  ended  September  30, 1997 was
provided for at the taxable income rate of approximately 20%, which is less than
the Company's  historical rate of 40%. This reduction is due to a portion of the
charges,  principally  transaction costs, incurred in the merger of PHAMIS being
non-deductible for income tax purposes.

Note 5 - 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. Earnings per share as calculated under Statement
128 is not materially  different from the primary and fully diluted earnings per
share amounts contained herein.

Note 6 - Reclassifications

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

                                  Page 8 of 23
<PAGE>


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
-------

All  information  included  herein for all periods has been presented to reflect
the combined  operations of IDX and PHAMIS, as a result of the merger more fully
described in Note 2 to the condensed consolidated financial statements as of and
for the period ended  September 30, 1997 and  Significant  Agreements  disclosed
below.

The  Company  reported  a net loss of $7.4  million,  or $0.28 per share for the
three months ended September 30, 1997. Excluding nonrecurring expenses for costs
associated with the merger with PHAMIS,  the Company reported net income of $6.4
million,  or $0.24 per share,  for the third  quarter of 1997 as compared to net
income of $4.1 million,  or $0.16 per share,  for the third quarter of 1996. For
the nine months ended  September  30, 1997,  exclusive of the merger and related
expenses,  the Company  reported net income of $16.1  million for the nine month
period, or $0.61 per share as compared to net income of $12.4 million,  or $0.48
per share, for the same period in 1996.

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 or all capital  letters,  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 in
the section on page 14 under the caption  "Factors  Affecting  Future  Results,"
which is not  italicized  or  capitalized  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 SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1996.

REVENUES
The Company's total revenues  increased to $64.6 million during the three months
ended September 30, 1997 from $51.4 million in the corresponding period in 1996,
an increase of $13.2 million or 25.7%.  Revenues from systems sales increased to
$34.7 million  during the three months ended  September 30, 1997 (53.7% of total
revenues) from $26.4 million (51.5% of total

                                  Page 9 of 23
<PAGE>


revenues) in the  corresponding  period in 1996,  an increase of $8.3 million or
31.2%. The increase was primarily due to an increase in installations of certain
of  the  Company's   Ambulatory  Suite  and  LASTWORD  systems.   Revenues  from
maintenance  and service fees increased to $29.9 million during the three months
ended  September 30, 1997 (46.3% of total revenues) from $25.0 million (48.5% of
total revenues) in the corresponding period in 1996, an increase of $4.9 million
or 19.8%.  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.

COST OF SALES
The cost of sales and  services  increased  to $33.6  million  during  the three
months ended September 30, 1997 from $27.1 million in the  corresponding  period
in 1996,  an  increase  of $6.5  million or 23.7%.  The gross  profit  margin on
systems  sales and  services  increased  to 48.0%  during the three months ended
September 30, 1997 from 47.2% in the corresponding  period in 1996. The increase
in gross  profit was due  primarily  to the  increase  in the  installations  of
certain  of the  Company's  products  from its  Ambulatory  Suite  and  LASTWORD
systems.  

SELLING,  GENERAL AND  ADMINISTRATIVE  EXPENSES  
Selling,  general and administrative  expenses increased to $12.5 million during
the  three  months  ended   September   30,  1997  from  $11.5  million  in  the
corresponding  period  in 1996,  an  increase  of $1.0  million  or  9.3%.  As a
percentage  of total  revenues,  selling,  general and  administrative  expenses
decreased to 19.4% during the three months ended  September  30, 1997 from 22.3%
in the  corresponding  period in 1996.  The  increase  in  selling,  general and
administrative  expenses  during the three months ended  September  30, 1997 was
principally due to an increase in the Company's sales and marketing staff.

RESEARCH AND DEVELOPMENT
Research and  development  expenses  increased to $9.3 million  during the three
months ended September 30, 1997 from $7.4 million in the corresponding period in
1996,  an increase of $1.9 million or 26.0%.  The increase is  attributed  to an
increase  in  personnel   expenses  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 14.4% during
the three months ended September 30, 1997 compared to 14.3% in the corresponding
period in 1996.

MERGER AND RELATED COSTS
During the third quarter ended September 30, 1997, the Company  recorded charges
of $20.0 million  related to the merger with PHAMIS.  The charges were comprised
of transaction costs of $6.8 million, long-lived assets, principally capitalized
software  development  costs and equipment,  write-offs and  adjustments of $7.4
million, attributable to the elimination of overlapping products and operations,
employee termination and related costs of $3.6 million, and other merger related
costs of $2.2 million,  principally related to integration costs incurred during
the period and the termination of leases and other contractual obligations.

                                 Page 10 of 23
<PAGE>


NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1996

REVENUES
The Company's total revenues  increased to $181.6 million during the nine months
ended  September  30, 1997 from $152.1  million in the  corresponding  period in
1996,  an  increase  of $29.5  million or 19.4%.  Revenues  from  systems  sales
increased  to $98.0  million  during the nine months  ended  September  30, 1997
(54.0% of total  revenues) from $81.9 million  (53.9% of total  revenues) in the
corresponding  period in 1996,  an  increase  of $16.1  million  or  19.7%.  The
increase was  primarily  due to an increase in  installations  of certain of the
Company's  Ambulatory Suite and LASTWORD systems.  Revenues from maintenance and
service fees increased to $83.6 million  during the nine months ended  September
30, 1997 (46.0% of total  revenues) from $70.2 million (46.1% of total revenues)
in the corresponding  period in 1996, an increase of $13.4 million or 19.1%. 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.

COST OF SALES
The cost of sales and services increased to $94.7 million during the nine months
ended September 30, 1997 from $79.8 million in the corresponding period in 1996,
an increase of $14.9 million or 18.6%.  The gross profit margin on systems sales
and services  increased to 47.9% during the nine months ended September 30, 1997
from 47.6% in the corresponding period in 1996. The increase in gross profit was
due primarily to the increase in the  installations  of certain of the Company's
products from its Ambulatory Suite and LASTWORD  systems.  

SELLING,  GENERAL AND ADMINISTRATIVE  EXPENSES 
Selling,  general and administrative  expenses increased to $37.8 million during
the nine months ended September 30, 1997 from $33.3 million in the corresponding
period in 1996,  an increase of $4.5 million or 13.7%.  As a percentage of total
revenues, selling, general and administrative expenses decreased to 20.8% during
the nine months ended September 30, 1997 from 21.9% in the corresponding  period
in 1996. The increase in selling, general and administrative expenses during the
nine months ended  September 30, 1997 was  principally due to an increase in the
Company's sales and marketing staff.

RESEARCH AND DEVELOPMENT
Research and  development  expenses  increased to $26.4 million  during the nine
months ended September 30, 1997 from $22.2 million in the  corresponding  period
in 1996, an increase of $4.2 million or 18.8%.  The increase is attributed to an
increase  in  personnel   expenses  and  outside   consultants  to  support  the
development  of  additional  products for the Company.  As a percentage of total
revenues,  research and development  expenses decreased slightly to 14.5% during
the nine months ended September 30, 1997 from 14.6% in the corresponding  period
in 1996.

MERGER AND RELATED COSTS
During the third quarter ended September 30, 1997, the Company  recorded charges
of $20.0 million  related to the merger with PHAMIS.  The charges were comprised
of transaction costs of $6.8 million, long-lived assets, principally capitalized
software development costs and

                                 Page 11 of 23
<PAGE>


equipment,  write-offs  and  adjustments  of $7.4 million,  attributable to the
elimination  of overlapping  products and  operations, employee  termination and
related costs of $3.6 million,  and other merger  related costs of $2.2 million,
principally  related to  integration  costs  incurred  during the period and the
termination of leases and other contractual obligations.

WRITE-OFF ON ACQUIRED IN PROCESS RESEARCH AND DEVELOPMENT
On February 26, 1997, the Company  recorded  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 July 10, 1997 (the  "Closing  Date"),  pursuant to an  Agreement  and Plan of
Merger  dated as of March 25,  1997 (the  "Merger  Agreement")  by and among IDX
Systems Corporation,  a Vermont corporation,  Penguin Acquisition Corporation, a
Washington  corporation  and  wholly-owned  subsidiary  of IDX  ("Penguin")  and
PHAMIS, Inc., a Washington corporation, IDX acquired PHAMIS by means of a merger
(the  "Merger") of Penguin with and into  PHAMIS,  with PHAMIS  remaining as the
surviving  corporation in the Merger. As a result of the Merger, PHAMIS became a
wholly-owned  subsidiary of IDX. PHAMIS offers healthcare  information solutions
that are part of a complete  software and hardware  system  strategy  design for
integrated  healthcare delivery  enterprises.  Penguin was formed solely for the
purpose of effecting the Merger.

Pursuant to the Merger Agreement,  each outstanding share of PHAMIS Common Stock
was  converted  into  .73 of a  share  of  IDX  Common  Stock.  Based  upon  the
capitalization  of PHAMIS as of the Closing Date, IDX issued  approximately  4.6
million shares of IDX Common Stock to former PHAMIS  stockholders in the Merger.
No fractional shares were issued in the Merger.  PHAMIS  stockholders  otherwise
entitled  to  receive a fraction  of a share of IDX  Common  Stock in the Merger
instead  received  an amount of cash equal to such  fraction  multiplied  by the
price per share of IDX Common Stock on the Nasdaq National  Market,  as reported
by Nasdaq,  on the business day  immediately  preceding  the Closing  Date.  The
merger  was  accounted  for as a  pooling  of  interests  in the  quarter  ended
September 30, 1997. All previously reported operating results have been restated
to reflect the combined operations of IDX and PHAMIS.

All options to purchase PHAMIS Common Stock outstanding immediately prior to the
Merger were  effectively  assumed by IDX pursuant to the Merger  Agreement.  IDX
registered on a Registration  Agreement on Form S-8 approximately 865,568 shares
of IDX Common Stock for issuance  upon the  exercise of stock  options  formerly
exercisable  for shares of PHAMIS Common Stock and in connection with the PHAMIS
Salary Savings and Deferral Plan.

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.


                                 Page 12 of 23
<PAGE>


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. In general,  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 PURCHASES OF
INTERESTS  IN  AND  ACQUISITIONS  OF  COMPANIES  WITH  COMPLEMENTARY   PRODUCTS,
TECHNOLOGIES AND BUSINESSES.

Cash and cash equivalents at September 30, 1997 were $19.9 million,  an increase
of $7.6 million from December 31, 1996.  The majority of the increase was due to
cash  provided by  operating  activities.  The  Company has a revolving  line of
credit with a bank  allowing  the Company to borrow up to $5.0  million  bearing
interest at the prime rate. There were no borrowings as of September 30, 1997 or
1996.

The Company's  operating lease  commitments  consist primarily of office leasing
for  the  Company's   operating   facilities.   THE  COMPANY  EXPECTS  THAT  ITS
REQUIREMENTS  FOR OFFICE  FACILITIES  AND OTHER  OFFICE  EQUIPMENT  WILL GROW AS
STAFFING  REQUIREMENTS  DICTATE.  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,  THE COMPANY 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
The  provision  for income taxes for the quarter  ended  September  30, 1997 was
provided for at the taxable income rate of approximately 20%, which is less than
the  historical  rate of 40%. This  reduction is due to a portion of the charges
incurred  in  the  merger,   principally  transaction  costs,  of  PHAMIS  being
non-deductible for income tax purposes.  FOR THE FORESEEABLE FUTURE, THE COMPANY
ANTICIPATES AN EXPECTED TAX RATE OF APPROXIMATELY 40% OF PRE-TAX INCOME.

NEW ACCOUNTING STANDARDS
In October, 1997 the American Institute of Certified Public Accountants issued
Statement of Position  ("SOP")  92-7,  Software  Revenue  Recognition,  revising
certain  aspects  of SOP  91-1.  The SOP  will  be  effective  for  transactions
occurring in years  beginning  after  December  15,  1997.  THE COMPANY DOES NOT
EXPECT THE SOP 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.


                                 Page 13 of 23
<PAGE>


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. Earnings per share as calculated under Statement
128 is not materially  different from the primary and fully diluted earnings per
share amounts contained herein.

FACTORS AFFECTING FUTURE RESULTS
As announced on July 10, 1997 the Company  completed its  acquisition of PHAMIS.
The  operations  of IDX and PHAMIS  involve  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  has been and is  expected to continue to 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.  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.  As  previously
discussed  in the section  "Merger and Related  Costs" the Company has  incurred
significant merger and related costs.  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 14 of 23
<PAGE>


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.  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 15 of 23
<PAGE>


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  record and make  available  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


                                 Page 16 of 23
<PAGE>


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.

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 service  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 17 of 23
<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.

The Company held its Special  Meeting of  Shareholders  on July 9, 1997.  Of the
21,041,258  shares of Common  Stock  outstanding  and  entitled  to vote at this
meeting,  20,072,170  were  represented  at the meeting,  in person or by proxy,
constituting a quorum. The following matters were voted upon.

1.   Holders of 19,371,448  shares of Common Stock of the Company voted to adopt
     and approve the Merger Agreement among the Corporation, Penguin Acquisition
     Corporation and PHAMIS, Inc. and the issuance of shares of IDX Common Stock
     in  exchange  for shares of PHAMIS  Common  Stock as described more 
     fully in the Joint Proxy  Statement/Prospectus dated June 5, 1997.  
     Holders  of 3,847  shares  voted  against  such  approval  and 1,696
     abstained from voting, with 695,179 broker non-votes.

2.   Holders of  19,745,861  shares of the Common Stock of the Company  voted to
     approve an  amendment  to the IDX  Second Amended and Restated Articles of
     Incorporation (the "IDX Articles") to increase the total number of
     shares  of  capital  stock  which  IDX  has the  authority  to  issue  from
     55,000,000  to  105,000,000  and the total  number of shares of IDX  Common
     which  IDX has the  authority  to  issue  from  50,000,000  to 
     100,000,000.  Holders of 322,936 shares voted against such approval
     and 2,895 shares abstained from voting, with 478 broker non-votes.

3.   Holders  of  16,243,307  shares of  Common  Stock of the  Company  voted to
     approve an amendment to the IDX Articles to increase the  shareholder  vote
     required  to approve  certain  business  combinations  from a  majority  to
     two-thirds in the event that the then current or preexisting IDX Board does
     not  recommend  such business  combinations  to the  shareholders.
     Holders of 2,185,676 shares voted against such approval and 951,640
     shares abstained from voting, with 691,547 broker non-votes.


                                 Page 18 of 23
<PAGE>


4.   Holders  of  17,034,326  shares of  Common  Stock of the  Company  voted to
     approve an amendment to IDX's 1995 Stock Option Plan to increase the number
     of shares of IDX Common  Stock  authorized  for  issuance  thereunder  from
     1,470,000  to  4,500,000  and to continue the 1995 Stock Option Plan as
     described more fully in the Joint Proxy Statement/Prospectus.  Holders
     of 2,340,520  shares voted  against such  approval and 2,145 shares
     abstained from voting, with 695,179 broker non-votes.

5.   Holders  of  19,370,530  shares of  Common  Stock of the  Company  voted to
     approve an amendment to the IDX's  Employee Stock Purchase Plan to increase
     the number of shares of IDX Common Stock authorized for issuance thereunder
     from 500,000 to 1,400,000 as described more fully in the Joint Proxy
     Statement/Prospectus.  Holders of 13,809  shares voted against such
     approval and 1,611 shares  abstained from voting,  with 686,220 broker
     non-votes.

6.   Holders  of  18,849,858  shares of  Common  Stock of the  Company  voted to
     approved an amendment to IDX's  Director  Stock Option Plan to increase the
     number of shares of IDX Common Stock  authorized  for  issuance  thereunder
     from 30,000 to 80,000 as  described  more fully in the Joint Proxy
     Statement/Prospectus.  Holders of 534,665 shares voted against such
     approval and 5,059 shares  abstained from voting,  with 682,588 broker
     non-votes.


Item 5.  OTHER INFORMATION

                  None.


ITEM 6.  EXHIBITS AND 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)  Reports on Form 8-K filed during the quarter  ended  September 30, 1997, or
     subsequent to that date but prior to the filing date of this Form10-Q:

     On July 25, 1997 the Company filed a report on Form 8-K, reporting  that on
     July 10,  1997,  pursuant to an  Agreement  and Plan of Merger  dated as of
     March 25, 1997 (the "Merger  Agreement") by and among the Company,  Penguin
     Acquisition  Corporation,  a wholly-owned subsidiary of IDX ("Penguin") and
     PHAMIS,  Inc.,  IDX acquired  PHAMIS by means of a merger (the "Merger") of
     Penguin with and into PHAMIS,  Inc., with PHAMIS remaining as the surviving
     corporation  in the  Merger.  As a result of the  Merger,  PHAMIS  became a
     wholly-owned  subsidiary of IDX.  Penguin was formed solely for the purpose
     of effecting the Merger.

                                 Page 19 of 23
<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: November 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 20 of 23
<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.       22

12            Statement regarding computation of per share earnings.       23



</TABLE>





















                                 Page 21 of 23
<PAGE>



                                   EXHIBIT 11

                             IDX SYSTEMS CORPORATION
                        SCHEDULES OF NET INCOME (LOSS) PER SHARE
                    (IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

<TABLE>
<CAPTION>

                                   PRIMARY                     FULLY DILUTED
                              ==================            ================== 
                              THREE MONTHS ENDED            THREE MONTHS ENDED
                                SEPTEMBER 30,                  SEPTEMBER 30,
                              1997        1996              1997        1996
                              ==================            ==================
<S>                           <C>         <C>               <C>         <C>

Weighted average 
shares outstanding            25,735      25,323            25,735      25,323

Net dilutive effect of 
stock options-based  
on the treasury
stock method using
the average price for
primary and ending
price, if higher, for 
fully diluted                    771         773               771         773
                              -------------------           ------------------
Total shares                  26,506      26,096            26,506      26,096
                              ===================           ==================
Income (loss)                ($7,355)   $  4,100          ($ 7,355)   $  4,100
                             ========   ========          =========   ========
Net income (loss) per share  ($ 0.28)   $   0.16          ($  0.28)   $   0.16
                             ========   ========          =========   ========

</TABLE>


                                 Page 22 of 23
<PAGE>


                                   EXHIBIT 12

                             IDX SYSTEMS CORPORATION
                        SCHEDULES OF NET INCOME PER SHARE
                    (IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
<TABLE>
<CAPTION>
 
                                     PRIMARY                   FULLY DILUTED
                               -------------------         ---------------------
                               NINE MONTHS ENDED           NINE MONTHS ENDED
                                  SEPTEMBER 30,                SEPTEMBER 30,
                               1997          1996          1997           1996
                               -------------------         ---------------------
<S>                            <C>           <C>           <C>            <C>
Weighted average 
shares outstanding             25,607        25,091        25,607         25,091

Net dilutive effect of 
stock options-based
on the treasury stock 
method using the average
price for primary and 
ending price, if higher, 
for fully diluted                 800           941           800            941

                             ----------------------      -----------------------
Total shares                   26,407        26,032        26,407         26,032
                             ======================      =======================

Net income                     $1,017       $12,131        $1,017        $12,131
                               ======       =======        ======        =======
Net income per share           $ 0.04       $  0.48        $ 0.04        $  0.48
                               ======       =======        ======        =======


</TABLE>



                                 Page 23 of 23