================================================================================

                                  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, 2000
                         -------------------------------

                         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 10, 2000 was 28,224,184.

================================================================================


<PAGE>



                             IDX SYSTEMS CORPORATION
                                    FORM 10-Q
                     For the Period Ended September 30, 2000


                                TABLE OF CONTENTS



PART I.   FINANCIAL INFORMATION                                            Page

         Item 1.   Interim Financial Statements (Unaudited)

         Condensed Consolidated Balance Sheets .  . . . . . . . . . . .. . 3

         Condensed Consolidated Statements of Operations . . . . . . .. .  4

         Condensed Consolidated Statements of Cash Flows . . . . . . .. .  5

         Notes to Condensed Consolidated Financial Statements . . . . . .  6

         Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations  .  .  .  . . . . . . . . . . 11


PART II. OTHER INFORMATION

         Item  1.  Legal  Proceedings  .  . . . . . . . .  .  . . . . . .  27

         Item 2.  Changes In  Securities  . . . . . . . . . . . . . . . .  27

         Item 3.  Defaults  Upon  Senior  Securities  . . .  . . . . . ..  27

         Item 4.  Submission of Matters to a Vote of Security Holders . .  27

         Item 5.  Other  Information  .  . . . . . . . . . . . . . . . .   27

         Item 6.  Exhibits And Reports On Form 8-K . . . . . . . .. . . .. 28


SIGNATURES . . . . . . . . . . . . . .  . . . . . . . . . . . . . . .. . . 29


EXHIBIT INDEX . . . . . . . . . .  . . . . . . . .  . . . . . . . .  . .  .30



                                  Page 2 of 30


<PAGE>



PART I.   FINANCIAL INFORMATION

ITEM 1.   INTERIM FINANCIAL STATEMENTS

                             IDX SYSTEMS CORPORATION
                CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                                 (IN THOUSANDS)


                                          September 30,         December 31,
                                               2000                 1999
                                          -----------------     ----------------

ASSETS
Cash, cash equivalents and marketable
   securities                             $ 69,769              $ 68,359
Accounts receivable, net                    97,118               110,759
Other current assets                         8,932                 5,153
Income taxes receivable                     12,192                   199
Deferred income taxes                       15,824                 7,691
                                          --------              --------
Total current assets                       203,835               192,161

Property and equipment, net                 68,542                58,265
Other assets                                 9,450                17,521
Deferred income taxes                        3,426                 3,200
                                          --------              --------
Total assets                              $285,253              $271,147
                                          ========              ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, accrued expenses
   and other liabilities                  $ 49,612              $ 37,970
Deferred revenue                            18,674                17,459
                                          --------              --------
Total current liabilities                   68,286                55,429

Minority interest                            9,040                 9,204
Stockholders' equity                       207,927               206,514
                                          --------              --------

Total liabilities and stockholders'
   equity                                 $285,253              $271,147
                                          ========              ========


          See Notes to the Condensed Consolidated Financial Statements



                                  Page 3 of 30

<PAGE>


PART I. FINANCIAL INFORMATION

ITEM 1.  INTERIM FINANCIAL STATEMENTS

                             IDX SYSTEMS CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
                                   (UNAUDITED)
<TABLE>
<CAPTION>


                               Three Months Ended         Nine Months Ended
                                  September 30,             September 30,
                               2000          1999         2000         1999
                               ----          ----         ----         ----
<S>                            <C>           <C>          <C>          <C>

REVENUES
Systems sales                  $ 28,940      $ 34,365     $ 71,680     $ 94,944
Maintenance and service fees     58,638        57,853      172,216      158,179
                               --------      --------    --------     --------

TOTAL REVENUES                   87,578        92,218      243,896      253,123

OPERATING EXPENSES
Cost of sales                    60,682        56,442      176,502      161,540
Selling, general and
   administrative                23,325        21,616       63,112       62,815
Research and development         12,074        12,733       37,414       39,921
Merger and related costs              -             -            -        4,045
Restructuring charges                 -             -       21,029            -
Loss of impairment of
   goodwill                           -             -        5,810            -
                              ---------       --------    ---------     --------
TOTAL OPERATING EXPENSES         96,081        90,791      303,867      268,321
                              ---------       --------    ---------     --------

OPERATING INCOME (LOSS)          (8,503)        1,427      (59,971)     (15,198)

Other income, net                  (798)         (537)      (2,928)      (1,796)
Loss on investment impairment         -             -            -        1,642
                              ----------     ---------   ----------   ----------
Income (loss) before income
  taxes                          (7,705)        1,964      (57,043)     (15,044)

Income tax provision (benefit)   (2,928)          786      (19,744)      (5,394)
                               ----------     ---------   ----------   ---------

NET INCOME (LOSS)             $  (4,777)     $  1,178    $ (37,299)   $  (9,650)
                              ==========     =========   ==========   ==========

BASIC EARNINGS (LOSS) PER
   SHARE                      $   (0.17)     $   0.04    $   (1.33)   $   (0.35)
                              ==========     =========   ==========   ==========
Basic weighted average shares
   outstanding                   28,154        27,767       28,047       27,701
                              ==========     =========   ==========   ==========
DILUTED EARNINGS (LOSS) PER
   SHARE                      $   (0.17)     $   0.04    $   (1.33)   $   (0.35)
                              ==========     =========   ==========   ==========
Diluted weighted average shares
   outstanding                   28,154        28,271       28,047       27,701

</TABLE>


          See Notes to the Condensed Consolidated Financial Statements

                                  Page 4 of 30

<PAGE>


PART I. FINANCIAL INFORMATION

ITEM 1.  INTERIM FINANCIAL STATEMENTS

                             IDX SYSTEMS CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                      Nine Months Ended
                                                        September 30,
                                                  2000                 1999
                                                  ----                 ----
<S>                                               <C>                  <C>

OPERATING ACTIVITIES
Net loss                                          $ (37,299)           $ (9,650)
Adjustments to reconcile net loss to net cash
   used in operating activities:
    Depreciation                                     11,153               8,915
    Amortization                                        474               2,307
    Deferred income tax benefit                      (8,359)                  -
    Increase in allowance for doubtful accounts       1,541                 585
    Loss on impairment of goodwill                    5,810                   -
    Minority interest                                   736                 112
    Loss on investment impairment                         -               1,642
    Restructuring charge                             21,029                   -
    Changes in operating assets and liabilities:
       Accounts receivable                            8,596              (9,780)
       Prepaid expenses and other assets             (3,590)              1,179
       Accounts payable and accrued expenses         (6,044)              5,839
       Federal and state income taxes               (11,994)            (10,149)
       Deferred revenue                               1,215                (438)
                                                   ---------          ----------
Net cash used in operating activities               (16,732)             (9,438)

INVESTING ACTIVITIES
Purchase of property and equipment, net             (21,481)           (28,177)
Purchase of securities available-for-sale           (14,962)          (178,246)
Sale of securities available-for-sale                21,203            246,753
Business acquisitions                                     -             (6,500)
Other assets                                          1,861             (3,077)
                                                   ---------         ----------
Net cash (used in) provided by investing
   activities                                       (13,379)            30,753

FINANCING ACTIVITIES
Proceeds from sale of common stock                    6,486              4,063
Procdeds from sale of preferred stock                32,089                  -
Proceeds from debt issuances                              -              3,501
Principal repayments of debt                              -            (11,373)
Distributions to affiliates, net                       (900)                 -
                                                   ---------         ----------
Net cash provided by (used in) financing
  activities                                          37,675            (3,809)
                                                   ---------         ----------
Increase in cash and cash equivalents                  7,564            17,506

Cash and cash equivalents at beginning of period      18,487            11,558
                                                   ---------         ----------
Cash and cash equivalents at end of period           26,051             29,064
Marketable securities                                43,718             44,832
                                                   ---------         ----------
Total cash, cash equivalents and marketable
  securities                                       $ 69,769          $  73,896
                                                   =========         ==========
</TABLE>


          See Notes to the Condensed Consolidated Financial Statements

                                  Page 5 of 30
<PAGE>

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Basis of Presentation

The interim  unaudited  condensed  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 accounting  principles  generally
accepted in the United States.  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
(consisting  of normal  recurring  accruals and  adjustments)  have been made to
provide a fair  presentation.  The  operating  results for the nine months ended
September  30, 2000 are not  necessarily  indicative  of the results that may be
expected for the year ending December 31, 2000. For further  information,  refer
to the consolidated financial statements and footnotes included in the Company's
latest  annual  report on Form  10-K  filed  with the  Securities  and  Exchange
Commission.


Note 2 - New Accounting Standards

In June 1998,  the  Financial  Accounting  Standards  Board issued SFAS No. 133,
"Accounting for Derivatives and Hedging Activities" ("SFAS No. 133"), as amended
by SFAS No. 137 and SFAS No. 138,  which  establishes  accounting  and reporting
standards for derivative instruments,  including derivative instruments embedded
in other  contracts,  (collectively  referred to as derivatives) and for hedging
activities.  SFAS No. 133 as amended,  is  effective  for the Company  beginning
after January 1, 2001. The adoption of SFAS No. 133, as amended, is not expected
to have a material  impact on the  Company's  financial  condition or results of
operations.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin  (SAB) No. 101  "Revenue  Recognition  in  Financial  Statements."  SAB
formalizes  positions the staff has  expressed in speeches and comment  letters.
SAB 101 is effective in 2000 but may be adopted in the quarter  ending  December
31, 2000 as a cumulative effect adjustment for a change in accounting principle.
In the event a  cumulative  effect  adjustment  is required,  previously  issued
interim  financial  statements  are  required  to be  restated.  The  Company is
presently  analyzing the impact, if any, that the adherence to the SAB will have
on its financial condition or results of operations.

In  March  2000,   the  Financial   Accounting   Standards   Board  issued  FASB
Interpretation  No. 44,  "Accounting  for Certain  Transactions  involving Stock
Compensation,  an  interpretation  of APB Opinion No. 25".  The Company  adopted
Interpretation  44 on July 1, 2000.  Interpretation  44  requires,  among  other
things,  that stock option  grants that have been  modified be accounted  for as
variable.  As a result  of  adopting  Interpretation  44,  the  Company  will be
required to adopt variable  accounting for stock options that have been modified
and if the market  price of the  Company's  stock  increases  it will  recognize
additional  compensation expense that it otherwise would not have incurred.  The
Company has not modified  any stock option  grants in the past year and does not
anticipate any compensation expense for stock options issued to date.

Note 3 - Restructuring Charge

On June  21,  2000 the  Company  announced  the  implementation  of a  workforce
restructuring  program.  The Company halted  development and discontinued  sales
efforts on certain product lines that have failed to achieve business targets or
have been deemed non-strategic to the business going forward. As a result of the

                                  Page 6 of 30

<PAGE>

restructuring,  the Company implemented a work-force  reduction of approximately
five  percent.  The program  resulted  in a charge to earnings of  approximately
$21.0 million in the second quarter,  in connection  with costs  associated with
product   discontinuations   of   approximately   $16.0  million  and  severance
arrangements  of  approximately   $5.0  million.   Workforce  related  accruals,
consisting  principally of severance costs,  were established  based on specific
identification   of   employees   to  be   terminated,   along  with  their  job
classification   or   functions,   and   their   location.   Substantially   all
workforce-related  actions were completed  during the third quarter of 2000 with
the exception of product  related  "sunset"  support teams,  which under certain
circumstances,  may result in the actual payment of termination  costs to extend
beyond September 30, 2000. As of September 30, 2000 the Company has a balance of
$13.7 million related to accrued  restructuring costs. Cash expenditures related
to these  accruals are  estimated  to be paid as follows:  $3.0 million over the
remainder  of 2000  and  $8.0  million  thereafter.  The  remaining  balance  of
approximately $2.7 million represents a provision for the estimated write-off of
accounts  receivable that will not affect cash. These write-offs are expected to
be finalized by March 31, 2001.

Note 4 - Business Acquisitions, Dispositions and Related Matters

On July 13, 2000, the Company announced an agreement to sell certain  operations
of  Channelhealth  Incorporated  to  Allscripts,  Inc.,  a leading  provider  of
point-of-care   e-prescribing   and   productivity   solutions  for  physicians.
ChannelHealth  provides  a  set  of  Internet-based  clinical  and  productivity
solutions for  physicians  that brings the power of the Internet to the practice
of medicine.  IDX will retain the Patient and  e-Commerce  Channels,  which were
previously  part of  Channelhealth  Incoporated,  enabling  IDX to  integrate an
Internet  solution that leverages its core  competencies  in physician  practice
management  systems.  In addition  to the sale,  the Company has agreed to enter
into a 10-year strategic  alliance whereby  Allscripts will become the exclusive
provider  of  point-of-care  clinical  applications  sold  by IDX  to  physician
practices.

Under the terms of the deal,  which is subject  to  regulatory  and  Allscripts'
shareholder  approval,  Allscripts  will acquire  Channelhealth  Incorporated in
exchange for 8.6 million  shares,  or 21.3% of  Allscripts  stock on a pro forma
fully diluted basis, of which IDX will receive approximately 90%.

On April 23,  1999,  the Company  completed a merger  with EDiX  Corporation,  a
provider  of  medical  transcription  services,  which  became  a  wholly  owned
subsidiary   of  the  Company.   The   transaction   was   accounted  for  as  a
pooling-of-interests  and  accordingly,  the  accompanying  condensed  financial
statements include the accounts of EDiX for all periods presented. In connection
with the merger,  the Company incurred  approximately $4.0 million of merger and
related  costs  consisting  principally  of  transaction  costs of $2.4 million,
write-offs  and  adjustments  of long-lived  assets,  principally  noncompatible
computer  equipment  of $1.4  million  and other  merger  related  costs of $0.2
million,  principally related to integration costs and the termination of leases
and other contractual obligations.

On April 1, 1999, the Company acquired an 80% interest in ChannelHealth, Inc., a
Massachusetts  corporation,  for $6.5 million. The acquisition was accounted for
under the  purchase  method  and  resulted  in $6.5  million of  goodwill  being
recorded on the Company's  financial  statements.  As described above certain of
Channelhealth Incorporated operations will be sold to Allscripts.

In the first quarter of 2000, the Company  determined  that an asset  impairment
existed related to goodwill acquired in the purchase of  ChannelHealth,  Inc., a
Massachusetts  corporation.  In January  2000,  the Company made the decision to
seek  a  primary  provider  of  content  and   transactions  for   Channelhealth

                                  Page 7 of 30

<PAGE>

Incorporated,  and decided to no longer utilize certain assets acquired with the
purchase of  ChannelHealth,  Inc. The Company  recognizes  impairment  losses on
long-lived   assets  when  indicators  of  impairment  are  present  and  future
undiscounted  cash flows are insufficient to support the assets'  recovery.  The
amount of the impairment  loss is recognized  based on an analysis of discounted
cash  flows  estimated  to be  derived  from  the  impaired  asset.  This  asset
impairment has been recognized during the first quarter of 2000 and is reflected
as a pre-tax loss on impairment of goodwill of approximately $5.8 million.

On June 23, 1999, the Company acquired all of the assets of  DietSite.com,  Inc.
for $1.5  million.  DietSite.com  is a website  that  includes  disease-oriented
dietary  information  with  extensive  proprietary  content on diets,  vitamins,
herbals and nutritionals.


Note 5 - Income Taxes

The 2000 tax benefit is lower than the  statutory  rate  principally  due to the
non-deductible  nature  of  the  loss  on  impairment  of  goodwill  related  to
ChannelHealth,  Inc. The 1999 tax benefit is lower than the  statutory  rate due
principally  to the inclusion in the condensed  financial  statements of the net
loss of EDiX Corporation, for which no tax benefit was recognized.


Note 6 - Segment Information

In June 1997,  the  Financial  Accounting  Standards  Board issued SFAS No. 131,
"Disclosures  about  Segments of an  Enterprise  and Related  Information."  The
Company  adopted SFAS No. 131 effective  with the fiscal year ended December 31,
1998. SFAS No. 131  establishes  standards for reporting  information  regarding
operating  segments  in  annual  financial   statements  and  requires  selected
information  for those  segments to be  presented in interim  financial  reports
issued to  stockholders.  SFAS No. 131 also  establishes  standards  for related
disclosures about major customers,  products and services, and geographic areas.
Operating  segments are  identified as  components of an enterprise  about which
separate discrete financial information is available for evaluation by the chief
operating decision maker, or decision making group, in making decisions,  how to
allocate resources and assess performance. Up to and including the first quarter
of 1999,  the Company  viewed its  operations  and  managed its  business as one
segment,  healthcare  information solutions that include software,  hardware and
related  services.  During the second quarter of 1999, the Company  acquired two
companies that have separate and distinct  financial  information  and operating
characteristics.  When applicable,  the information for the reportable  segments
has  been  restated  for  the  prior  year  in  order  to  conform  to the  2000
presentation.

The  Company's  three  operating  segments have  separate  management  teams and
infrastructures that offer different products and services.  Accordingly,  these
operating   segments  have  been   classified  as  three   reportable   segments
(information  systems and services,  Internet services and content,  and medical
transcription services).

Information   Systems  and   Services:   This   segment   contains  IDX  Systems
Corporation's  healthcare information solutions that include software,  hardware
and related services. IDX solutions enable healthcare  organizations to redesign
patient care and other  workflow  processes in order to improve  efficiency  and
quality.  The  principal  markets for this  segment  include  physician  groups,
management service  organizations,  hospitals,  and integrated delivery networks
primarily located in the United States.

                                  Page 8 of 30

<PAGE>

Internet  Services and Content:  Channelhealth  Incorporated,  a majority  owned
subsidiary,  offers three Internet  channels that integrate  IDX's core practice
management systems with extensive  Internet-based  services and clinically valid
content. Channelhealth Incorporated services are available to physicians through
group  practices,  hospitals,  integrated  delivery  networks  and managed  care
organizations.  As discussed in Note 4, on July 13, 2000, the Company  announced
an  agreement  to  sell  the  majority  of  the   operations  of   Channelhealth
Incorporated  to  Allscripts,  Inc.  Effective  on the date of the close of this
pending transaction, the Internet Services and Content segment will no longer be
presented separately.

Medical  Dictation and  Transcription  Services:  This segment  contains EDiX, a
provider of medical transcription outsourcing services. EDiX's principal markets
include  hospitals and large physician group practices  primarily located in the
United States.

The Company evaluates the performance of its operating segments based on revenue
and operating  income.  Intersegment  revenues are  immaterial.  No one customer
accounts  for  greater  than 10% of revenue for any  reportable  segment for the
three and nine month  periods ended  September  30, 2000,  with the exception of
EDiX.  EDiX's  revenues from one major  customer  amounted to 10.5% and 12.9% of
EDiX's  total  revenue  during the three  months  ended  September  30, 2000 and
September  30,  1999,  respectively.  EDiX's  revenues  from one major  customer
amounted to 10.3% and 10.4% of EDiX's total revenue during the nine months ended
September 30, 2000 and September 30, 1999, respectively.

Summarized financial information concerning the Company's reportable segments is
shown in the following table (in thousands):

<TABLE>
<CAPTION>
                                                          MEDICAL
                                                          DICTATION
                               INFORMATION  INTERNET      AND
                               SYSTEMS AND  SERVICES AND  TRANSCRIPTION
                               SERVICES     CONTENT       SERVICES     TOTAL
                               -------------------------------------------------
<S>                            <C>          <C>           <C>          <C>

FOR THE THREE MONTHS
  ENDED SEPTEMBER 30, 2000

Net operating revenues         $ 67,857      $ 1,591      $ 18,130     $ 87,578
Operating income (loss)          (3,175)      (6,138)          810       (8,503)
Identifiable operating assets   237,646       24,991        22,616      285,253

FOR THE NINE MONTHS
  ENDED SEPTEMBER 30, 2000

Net operating revenues         $187,151      $ 4,342     $ 52,403      $243,896
Operating income (loss)         (39,280)     (23,230)       2,539       (59,971)
Identifiable operating assets   237,646       24,991       22,616       285,253

FOR THE THREE MONTHS
   ENDED SEPTEMBER 30, 1999

Net operating revenues         $ 80,021      $     0     $ 12,197      $ 92,218
Operating income (loss)           3,275       (1,959)         111         1,427
Identifiable operating assets   254,774        8,042       12,798       275,614

FOR THE NINE MONTHS
  ENDED SEPTEMBER 30, 1999

Net operating revenues         $220,277      $     0     $ 32,846      $253,123
Operating loss                   (7,333)      (2,901)      (4,964)      (15,198)
Identifiable operating assets   254,774        8,042       12,798       275,614

</TABLE>


Corporate  headquarters  assets are  included  in the  Information  Systems  and
Services  segment.  Substantially  all of the  Company's  operations  are in the
United States. The financial  information disclosed herein represents all of the
material  financial  information  related to the Company's  principal  operating
segments.

                                  Page 9 of 30

<PAGE>


Note 7 - Earnings Per Share Information

The  following  sets forth the  computation  of basic and diluted  earnings  per
share:

<TABLE>
<CAPTION>

                                     THREE MONTHS ENDED    NINE MONTHS ENDED
                                        SEPTEMER 30,          SEPTEMBER 30,
                                     2000        1999      2000        1999
                                     ----        ----      ----        ----
<S>                                  <C>         <C>       <C>         <C>
Numerator:
  Net income (loss)                  $ (4,777)  $ 1,178   $(37,299)   $ (9,650)
                                     ---------  --------   ---------   ---------
Numerator for basic and diluted
  income (loss) per share            $ (4,777)  $ 1,178   $(37,299)   $ (9,650)
                                     ---------  --------   ---------   ---------

Denominator:

  Weighted-average shares              28,154    27,767      28,047      27,701
  Effect of employee stock options          -       504           -           -
                                     --------   --------   ---------   ---------

Denominator for diluted income
  (loss) per share                     28,154    28,271      28,047      27,701
                                     --------   --------   ---------   ---------
Basic and diluted income (loss)
   per share                         $  (0.17)  $  0.04    $ (1.33)    $ (0.35)
                                     =========  ========   =========   =========
</TABLE>

                                 Page 10 of 30

<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS


GENERAL
The Company reported a net loss of $4.8 million, or $0.17 per diluted share, for
the third quarter of 2000 as compared to net income of $1.2 million or $0.04 per
diluted share, for the third quarter of 1999. The Company reported a net loss of
$37.3 million, or $1.33 per share, for the first nine months of 2000 as compared
to a net loss of $9.6  million or $0.35 per  diluted  share,  for the first nine
months  of  1999.  Excluding  the  effect  of  charges  related  to a  workforce
restructuring  program  announced on June 21, 2000 and the loss on impairment of
goodwill associated with  ChannelHealth,  Inc., the net loss for the nine months
ended  September  30, 2000 was $18.6  million or $0.66 per share.  Excluding the
effect of the  charge  for the  merger and  related  costs  associated  with the
acquisition  of EDiX  Corporation  of $4.0  million  and the loss on  investment
impairment of $1.6 million, the net loss for the nine months ended September 30,
1999 was $5.6 million or $0.20 per share.

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THREE MONTHS
ENDED SEPTEMBER 30, 1999

REVENUES
The Company's total revenues  decreased to $87.6 million during the three months
ended September 30, 2000 from $92.2 million in the corresponding period in 1999,
a decrease of $4.6 million or (5.0%).  Revenues from systems sales  decreased to
$28.9 million  during the three months ended  September 30, 2000 (33.0% of total
revenues)   compared  to  $34.4  million  (37.3%  of  total   revenues)  in  the
corresponding  period in 1999,  a  decrease  of $5.4  million or  (15.8%).  This
decrease  was  primarily  due to a decrease  in new sales and  installations  of
certain IDX systems.  Revenues from  maintenance  and service fees  increased to
$58.6 million  during the three months ended  September 30, 2000 (67.0% of total
revenues)  from $57.9  million  (62.7% of total  revenues) in the  corresponding
period in 1999,  an increase of $0.8  million or 1.4%.  The increase in revenues
from  maintenance  and  service  fees  is  primarily  due to  increased  medical
transcription  service fee revenue from EDiX offset by a decrease in  consulting
services provided by IDX's core business.

During 1999 and continuing into 2000, certain of the Company's customers delayed
making  purchasing  decisions with respect to certain of the Company's  software
systems comprised of multiple products resulting in longer sales cycles for such
systems.  Management  believes  such  delays  are due to a  number  of  factors,
including customer  organizational changes,  government approvals,  pressures to
reduce expenses,  product complexity,  competition,  and customer  preoccupation
with  internal  Year 2000  issues.  In June 2000,  the  Company  announced  that
weakness in system sales experienced in the fourth quarter of 1999 and the first
half of 2000 was expected to continue  through the remainder of 2000.  While the
Company  believes  these factors are  temporary,  it expects them to continue to
cause   reductions   or  delays  in  spending  for  new  systems  and  services.
Accordingly, the Company expects that it will experience deferrals and delays in
sales of software  and related  services,  professional  services,  and hardware
during the remainder of 2000.

                                 Page 11 of 30

<PAGE>

COST OF SALES AND SERVICES
The cost of sales and  services  increased  to $60.7  million  during  the three
months ended September 30, 2000 from $56.4 million in the  corresponding  period
in 1999, an increase of $4.2 million or 7.5%.  The increase in cost of sales and
services as compared to the prior year resulted  from growth in client  services
expenses,  primarily  related to medical  transcription  costs  combined with an
increase in cost of hardware offset by a decrease in outside contract  services.
The gross profit margin on systems sales and services  decreased to 30.7% in the
third  quarter of 2000 from 38.8% for the same period in 1999.  The  decrease in
gross  profit  margin as a  percentage  of sales was due to the net  effect of a
decrease in software  license  revenues  which  provides a higher  gross  profit
margin,  and an increase in  maintenance  and service  revenue which  provides a
lower  gross  profit  margin.  IDX's  core  business,  information  systems  and
services,  gross profit margin as a percentage of sales declined to 35.8% during
the  third  quarter  of 2000 from  42.1% for the same  period in 1999 due to the
effect of the revenue  mix  described  above.  The gross  profit  margin for the
Company's medical dictation and transcription  business segment (EDiX) increased
as a percentage  of sales to 18.7% in 2000 from 16.8% in 1999 due to an increase
in utilization of a new transcription processing system, which provides a higher
margin,  as compared  to the prior year,  combined  with other  efficiencies  in
editing  and  telecommunications.   Channelhealth   Incorporated  experienced  a
negative gross margin of 50.5% during the third quarter of 2000 primarily due to
high  fixed  costs  relative  to sales  volume  due to the  early  stage of this
business' development.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling,  general and administrative  expenses increased to $23.3 million during
the three  months  ended  September  30,  2000 from  $21.6  million  during  the
corresponding  period  in 1999,  an  increase  of $1.7  million  or  7.9%.  As a
percentage  of total  revenues,  selling,  general and  administrative  expenses
increased to 26.6% during the three months ended  September  30, 2000 from 23.4%
for  the  same  period  in  1999.  IDX's  core  business  selling,  general  and
administrative  expenses decreased $1.7 million primarily due to the transfer of
certain expenses to the Channelhealth  Incorporated subsidiary.  EDiX's selling,
general and administrative expenses increased $559,000 or 33.7% during the third
quarter of 2000 as compared to the same period in the prior year  primarily  due
to  increased  costs  to  support  sales  growth.  Channelhealth  Incorporated's
selling,  general and administrative expenses were $3.8 million during the third
quarter of 2000 which includes sales and marketing  expenses and  administrative
start up expenses.

RESEARCH AND DEVELOPMENT
Research and  development  expenses  decreased to $12.1 million during the three
months ended September 30, 2000 from $12.7 million in the  corresponding  period
in 1999,  a decrease of $659,000 or 5.2%.  The  decrease is  primarily  due to a
reduction  in costs to address Year 2000 issues  combined  with the cost savings
related to a  workforce  restructuring  program  announced  in June  2000.  As a
percentage  of  total  revenues,  research  and  development  expenses  remained
consistent  at 13.8% of revenue for the third  quarters of 2000 and 1999.  IDX's
core business  research and development  expenses  decreased $1.3 million due to
the transfer of approximately  $1.0 million of research and development costs to
the internet services and content business segment (Channelhealth Incorporated),
as well as the  effect of the  workforce  restructuring  program.  Research  and
development costs in the medical  dictation and  transcription  business segment
(EDiX) increased from $276,000 in 1999 to $353,000 in 2000.

RESTRUCTURING CHARGE
On June  21,  2000 the  Company  announced  the  implementation  of a  workforce
restructuring  program.  The Company halted  development and discontinued  sales
efforts on certain product lines that have failed to achieve business targets or

                                 Page 12 of 30

<PAGE>

have been deemed non-strategic to the business going forward. As a result of the
restructuring   program,  the  Company  implemented  a  workforce  reduction  of
approximately  five percent.  Though the Company reduced  certain  expenses as a
result of the workforce restructuring program, the Company continues to evaluate
and invest  resources in the development of various products and new initiatives
that  management  believes  will provide  returns.  As a result of these ongoing
investments in products and initiatives,  some of the projected savings from the
restructuring  program  have been  reinvested  in new  initiatives  and  product
enhancements.  The  restructuring  program  resulted  in a charge to earnings of
approximately $21.0 million in the second quarter,  primarily in connection with
costs associated with product  discontinuations  of approximately  $16.0 million
and severance  arrangements of approximately $5.0 million.  Cash expenditures of
$6.5 million and non-cash  expenses of  approximately  $800,000 related to these
accruals  were  processed  during the second and third  quarters of 2000.  As of
September 30, 2000 the Company has a balance of $13.7 million related to accrued
restructuring  costs. Cash expenditures  related to these accruals are estimated
to be substantially made as follows: $3.0 million over the remainder of 2000 and
$8.0 million  thereafter.  The remaining  balance of approximately  $2.7 million
represents a provision for the estimated  write-off of accounts  receivable that
will not affect cash. These write-offs are expected to be finalized by March 31,
2001.

OTHER (INCOME) EXPENSE, NET
Interest income was approximately  $1.0 million during the third quarter of 2000
as compared to $800,000  for the same period in 1999.  The  increase in interest
income is due to a higher average  invested balance combined with an increase in
interest rates due to the taxable nature of the investment holdings in 2000.

INCOME TAXES
Income taxes for the quarter ended  September 30, 2000 were  benefited at 38.0%.
Income  taxes for the quarter  ended  September  30, 1999 were  provided  for at
40.0%.  Excluding  the  impact of the loss on  impairment  of  goodwill  that is
non-deductible for income tax purposes, the Company anticipates an effective tax
rate of  approximately  38.0% for the remainder of the year ending  December 31,
2000.  Of the net  deferred tax assets of  approximately  $19.3  million,  $12.2
million is expected  to be  realized by carrying  back losses to prior years and
the balance of $7.1  million is  expected  to be  realized  by  reducing  future
taxable income.

NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1999

REVENUES
The Company's total revenues  decreased to $243.9 million during the nine months
ended September 30, 2000 compared to $253.1 million in the corresponding  period
in 1999,  a  decrease  of $9.2  million or 3.6%.  Revenues  from  systems  sales
decreased  to $71.7  million  during the nine months  ended  September  30, 2000
(29.4% of total revenues) compared to $94.9 million (37.5% of total revenues) in
the  corresponding  period in 1999, a decrease of $23.3  million or 24.5%.  This
decrease  was  primarily  due to a decrease  in new sales and  installations  of
certain IDX systems.  Revenues from  maintenance  and service fees  increased to
$172.2 million  during the nine months ended  September 30, 2000 (70.6% of total
revenues)  from $158.2 million  (62.5% of total  revenues) in the  corresponding
period in 1999, an increase of $14.0  million or 8.9%.  The increase in revenues
from  maintenance and service fees was primarily due to increased  transcription
service fee revenue from EDiX.

                                 Page 13 of 30

<PAGE>


During 1999 and continuing into 2000, certain of the Company's customers delayed
making  purchasing  decisions with respect to certain of the Company's  software
systems comprised of multiple products resulting in longer sales cycles for such
systems.  Management  believes  such  delays  are due to a  number  of  factors,
including customer  organizational changes,  government approvals,  pressures to
reduce expenses,  product complexity,  competition,  and customer  preoccupation
with  internal  Year 2000  issues.  In June 2000,  the  Company  announced  that
weakness in system sales experienced in the fourth quarter of 1999 and the first
half of 2000 was expected to continue through the remainder of 2000. The Company
expects that the factors  described  above may continue to cause  reductions  or
delays in  spending  for new  systems  and  services.  Accordingly,  the Company
expects that it will  experience  deferrals  and delays in sales of software and
related services,  professional  services,  and hardware during the remainder of
2000.

COST OF SALES
The cost of sales and  services  increased  to $176.5  million  during  the nine
months ended September 30, 2000 from $161.5 million in the corresponding  period
in 1999,  an  increase  of $15.0  million or 9.3%.  The gross  profit  margin on
systems  sales and  services  decreased  to 27.6%  during the nine months  ended
September 30, 2000 from 36.2% in the corresponding  period in 1999. The decrease
in gross  profit  margin  was  primarily  due to high fixed  costs and  overhead
expenses in relation to decreased  revenue from  installations  of the Company's
software systems which typically  include a greater  percentage of higher margin
software than of services.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling,  general and administrative  expenses increased to $63.1 million during
the nine months ended September 30, 2000 from $62.8 million in the corresponding
period in 1999,  an  increase  of $297,000  or 0.5%.  As a  percentage  of total
revenues, selling, general and administrative expenses increased to 25.9% during
the nine months  ended  September  30, 2000 from 24.8% in 1999.  The increase in
total selling,  general and administrative expenses during the nine months ended
September 30, 2000 was primarily due to increased salary and benefit costs.

RESEARCH AND DEVELOPMENT
Research and  development  expenses  decreased to $37.4 million  during the nine
months ended September 30, 2000 from $39.9 million in the  corresponding  period
in 1999, a decrease of $2.5 million or (6.3%).  The decrease is primarily due to
costs of efforts  to  address  Year 2000  issues as  compared  to the prior year
combined  with reduced  costs as a result of a workforce  restructuring  program
pursuant to the discontinuation of three product lines. As a percentage of total
revenues,  research and development  expenses decreased to 15.3% during the nine
months ended  September 30, 2000 from 15.8% for the nine months ended  September
30,  1999.  The  decrease as a  percentage  of sales for the nine  months  ended
September 30, 2000 as compared to the prior year, is primarily due to a decrease
in outside consulting expenses.

RESTRUCTURING CHARGE
On June  21,  2000 the  Company  announced  the  implementation  of a  workforce
restructuring  program.  The Company halted  development and discontinued  sales
efforts on certain product lines that have failed to achieve business targets or
have been deemed non-strategic to the business going forward. As a result of the
restructuring   program  the  Company   implemented  a  workforce  reduction  of
approximately  five percent.  Though the Company reduced  certain  expenses as a
result of the workforce restructuring program, the Company continues to evaluate
and invest  resources in the development of various products and new initiatives
that  management  believes  will provide  returns.  As a result of these ongoing
investments in products and initiatives,  some of the projected savings from the
restructuring  program  have been  reinvested  in new  initiatives  and  product

                                 Page 14 of 30

<PAGE>


enhancements.  The  restructuring  program  resulted  in a charge to earnings of
approximately $21.0 million in the second quarter,  primarily in connection with
costs associated with product  discontinuations  of approximately  $16.0 million
and severance  arrangements of approximately $5.0 million.  Cash expenditures of
$6.5 million and non-cash  expenses of  approximately  $800,000 related to these
accruals  were  processed  during the second and third  quarters of 2000.  As of
September 30, 2000 the Company has a balance of $13.7 million related to accrued
restructuring  costs. Cash expenditures  related to these accruals are estimated
to be substantially made as follows: $3.0 million over the remainder of 2000 and
$8.0 million  thereafter.  The remaining  balance of approximately  $2.7 million
represents a provision for the estimated  write-off of accounts  receivable that
will not affect cash. These write-offs are expected to be finalized by March 31,
2001.

CHARGE FOR MERGER AND RELATED COSTS
During June 1999, the Company  recorded  charges of $4.0 million  related to the
acquisition of EDiX.  The charges were  comprised of  transaction  costs of $2.4
million,   write-offs  and  adjustments  for  long-lived   assets,   principally
noncompatible computer equipment, of $1.4 million and other merger related costs
of $0.2 million,  principally  related to integration  costs incurred during the
period and the termination of leases and other contractual obligations.

CHARGE FOR LOSS ON IMPAIRMENT OF GOODWILL
During  the  first  quarter  of  2000,  the  Company  determined  that an  asset
impairment  existed  related to  goodwill  acquired  in the 1999  purchase  of a
Massachusetts corporation ChannelHealth,  Inc. In January 2000, the Company made
the  decision  to seek a  primary  provider  of  content  and  transactions  for
Channelhealth  Incorporated,  and decided to no longer  utilize  certain  assets
acquired with the purchase of ChannelHealth,  Inc. This goodwill  impairment was
recognized  during the first  quarter of 2000 and is reflected as a pre-tax loss
on impairment of goodwill of approximately $5.8 million.

OTHER (INCOME) EXPENSE, NET
Interest income  increased to  approximately  $3.7 million during the first nine
months of 2000  compared to $3.4  million for the same period in 1999  primarily
due to the  taxable  nature of the  investment  holdings  in 2000.  No  interest
expense  was  incurred  during the first nine  months of 2000  compared  to $0.9
million  for the same period in the prior  year.  Interest  expense in the prior
year was primarily attributable to EDiX Corporation.

LOSS ON INVESTMENT IMPAIRMENT
Other expense included the write-off of an investment of $1.6 million during the
9 months  ended  September  30, 1999 due to the  investee's  inability  to raise
additional equity and a decision to dissolve the business.

INCOME TAXES
Income  taxes for the nine months  ended  September  30, 2000 were  benefited at
34.6%.  The tax  benefit  in 2000 is  lower  than  that  expected  based  on the
statutory  rate  principally  due to the  non-deductible  nature  of the loss on
goodwill  impairment  related to ChannelHealth in January of 2000.  Income taxes
for the nine months ended  September 30, 1999 were benefited at 35.9%.  The 1999
tax benefit is lower than the expected  statutory rate due to the non-deductible
nature of  certain  merger  related  costs and the  inclusion  in the  financial
statements  of the net loss of EDiX  Corporation,  for which no tax  benefit was
recognized.  Excluding  the impact of the loss on  goodwill  impairment  that is
non-deductible for income tax purposes, the Company anticipates an effective tax
rate of  approximately  38.0% for the remainder of the year ending  December 31,
2000.  Of the net  deferred tax assets of  approximately  $19.3  million,  $12.2
million is expected  to be  realized by carrying  back losses to prior years and

                                 Page 15 of 30

<PAGE>

the balance of $7.1  million is  expected  to be  realized  by  reducing  future
taxable income.

LIQUIDITY AND CAPITAL RESOURCES
Cash flows  related to  operations  are  principally  comprised  of net loss and
depreciation  and are  primarily  affected  by the net  effect of the  change in
accounts receivable, accounts payable and accrued expenses. Due to the nature of
the  Company's  business,  accounts  receivable,  deferred  revenue and accounts
payable  fluctuate  considerably  due to, among other things,  the length of the
sales cycle and  installation  efforts which are dependent  upon the size of the
transaction,  the changing business plans of the customer,  the effectiveness of
customers'  management and general economic conditions.  During the three months
ended  September 30, 2000 accounts  receivable  from customers were collected on
average  within 102 days  compared to the 1999 annual  average of 119 days.  The
1999 annual  average  represented  an increase of 13 days from the prior year in
terms of average days to collect  receivables  from  customers.  The 1999 annual
average was higher than current and historical collection periods due in part to
unbilled receivables related to contracts accounted for using long term contract
accounting  combined  with  a  lengthening  of  customer  payment  patterns.  In
connection with its workforce  restructuring  program the Company estimates cash
expenditures  to be made as follows:  $3.0 million during the remainder of 2000,
and $8.0 million thereafter.

Cash flows related to investing activities have historically been related to the
purchase of  computer  and office  equipment,  leasehold  improvements,  and the
purchase and sale of investment grade marketable securities. The Company expects
these activities to continue. Investing activities may also include purchases of
interests in, loans to and acquisitions of complementary products,  technologies
and  businesses.  There can be no  assurance  that the  Company  will be able to
successfully complete any such purchases or acquisitions in the future.

Cash flows from financing activities  historically relate to purchases of common
stock through the exercise of employee stock options and in connection  with the
employee  stock  purchase  plan.  During  1999,  all  outstanding  debt  of EDiX
Corporation  was paid.  Cash,  cash  equivalents  and short-term  investments at
September 30, 2000 were $69.8 million, an increase of $1.4 million from December
31, 1999.  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 that
will expire on January 14, 2001.  There were no  borrowings  as of September 30,
2000.

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.  In April 2000, the Company  entered into a new operating
lease for office space in Seattle, Washington commencing in 2003 for a period of
12  years.  The  Company  plans  to  continue   increasing  the  number  of  its
professional  staff  during 2001 and future  periods to meet  anticipated  sales
volume and to support research and development  efforts. To the extent necessary
to support  increases  in  staffing,  the Company may obtain  additional  office
space.

The Company is currently leasing the Company's headquarters in South Burlington,
Vermont from BDP Realty,  a related  entity  which is included in the  Company's
consolidated  financial  statements.  The  Company  started  construction  on an
expansion of its corporate  headquarters facility in South Burlington,  Vermont,
in November 1999, and is considering  various options for financing  including a
construction loan, sale lease-back  arrangement or funding from operations.  The
Company anticipates that it will spend approximately $16 million on construction
to expand its Corporate Headquarters  facility.  From time to time, based on the
Company's  requirements,  the Company may consider other purchases of additional
land or the construction of additional office space.

                                 Page 16 of 30

<PAGE>

The Company believes that current  operating funds will be sufficient to finance
its operating  requirements  at least through the next twelve  months.  To date,
inflation has not had a material impact on the Company's revenues or income.


YEAR 2000

In prior years,  the Company  discussed  the nature and progress of its plans to
become Year 2000 ready. In late 1999, the Company  completed its remediation and
testing of its internal use systems  (both  information  technology  related and
non-information  technology  related)  and its products  (including  third party
products   included  in  its  products)  and  also  completed  and   implemented
contingency  planning.  As a result of those efforts, the Company experienced no
significant disruptions in its products (including third party products included
in its products),  internal use information technology systems, and internal use
non-information  technology  systems,  and the  Company  believes  all of  those
systems successfully  responded to the Year 2000 date change. The Company is not
aware of any material problems resulting from Year 2000 issues,  either with its
products,  its internal systems,  or the products and services of third parties.
During the first nine months of 2000, the Company  expensed all of its remaining
project  costs in the  amount  of  approximately  $1.2  million,  which  related
primarily to contingency plans and remediation efforts for internal systems. The
Company will continue to monitor its products  (including  third party  products
included in its products), mission critical computer applications,  and those of
its  suppliers  and vendors  throughout  the Year 2000 to ensure that any latent
Year 2000 matters that may arise are addressed promptly.


FORWARD-LOOKING INFORMATION AND FACTORS AFFECTING FUTURE PERFORMANCE

This  Management  Discussion and Analysis of Financial  Condition and Results of
Operations  contains  "forward-looking  statements" as defined in Section 21E of
the  Securities  and Exchange  Commission  Act of 1934.  For this  purpose,  any
statements  contained  in this  Quarterly  Report  that  are not  statements  of
historical fact may be deemed to be  forward-looking  statements.  Words such as
"believes,"  "anticipates,"  "plans,"  "expects," "will" and similar expressions
are  intended  to  identify  forward-looking  statements.  There are a number of
important  factors  that could cause the results of IDX Systems  Corporation  to
differ  materially  from those  indicated  by these  forward-looking  statements
including among others,  the factors set forth below. If any risk or uncertainty
identified in the following factors actually occurs,  IDX's business,  financial
condition and operating  results would likely suffer.  In that event, the market
price of IDX's common stock could  decline and you could lose all or part of the
money you paid to buy IDX's common stock.

The following  important factors affect IDX's business and operations  generally
or affect more than one segment of our business and operations:

IDX STOCK PRICES MAY CONTINUE TO BE VOLATILE.  IDX has experienced,  and expects
to continue to  experience  fluctuations  in its stock price due to a variety of
factors including:

        o         delay in customers purchasing decisions due to a variety of
                  factors such as consolidation, management changes and
                  regulatory developments;

                                 Page 17 of 30

<PAGE>


        o         market prices of competitors;
        o         announcements of technological innovations, including Internet
                  delivery of information and use of application service
                  provider technology;
        o         new product introductions by IDX or its competitors;
        o         market conditions particularly in the computer software and
                  Internet industries; and
        o         healthcare reform measures and healthcare regulation.

These  fluctuations  have had a  significant  impact on the market  price of our
common stock,  and may have a  significant  impact on the future market price of
our common stock.

These fluctuations may affect operating results as follows:

         o        ability to transact stock acquisitions; and
         o        ability to retain and incent key employees.

ADVERSE FINANCIAL TRENDS INCLUDING DECLINING NET INCOME AND CASH FROM OPERATIONS
HAVE AND MAY CONTINUE.  Year over year net income and cash from  operations have
generally  declined  since 1998. In 1999,  and the first nine months of 2000 IDX
generated  a  net  loss  of  approximately   $7.9  million  and  $37.3  million,
respectively.  If  these  negative  trends  continue,  IDX may  have  difficulty
financing  future growth and funding  operating  initiatives,  including  future
acquisitions.

IDX EXPECTS ITS QUARTERLY  OPERATING RESULTS TO FLUCTUATE AND ITS CUSTOMER SALES
AND INSTALLATION  REQUIREMENTS TO CHANGE.  IDX expects its quarterly  results of
operations may continue to fluctuate.  Because a significant percentage of IDX's
expenses  are  relatively   fixed,  the  following  factors  could  cause  these
fluctuations:

         o        delay in customers  purchasing  decisions due to a variety of
                  factors such as consolidation and management  changes;
         o        the volume and timing of systems sales and  installations;
         o        recognizing  revenue at various points during the installation
                  process;
         o        the timing of new product and service introductions and
                  product upgrade releases; and
         o        the sales and implementation cycles of IDX's customers.

In light of the above,  IDX  believes  that its  results of  operations  for any
particular  quarter or fiscal year are not  necessarily  reliable  indicators of
future performance.

IDX'S PROPOSED TRANSACTION WITH ALLSCRIPTS, INC. MAY BE DELAYED, MAY NOT HAPPEN,
OR MAY BE UNSUCCESSFUL. IDX has agreed to sell the Physician Channel Business of
its  subsidiary,  Channelhealth  Incorporated,  to  Allscripts,  Inc., a leading
provider  of  point-of-care  solutions  for  physicians,   while  retaining  the
E-commerce   Channel  and  Patient  Channel  Business.   The  closing  of  these
transactions is conditioned on shareholder and regulatory approval, which may be
delayed or denied. There can be no assurance that the proposed transactions with
Allscripts  and  ChannelHealth  will be  approved  or  will  ever  happen.  As a
condition  to the sale,  IDX and  Allscripts  have agreed to implement a 10-year
strategic  alliance  agreement,  whereby  Allscripts  will become the  exclusive
provider of certain point-of-care clinical applications sold by IDX to physician
shareholder  approval,  which may not happen. Even if the required approvals are
given and the transaction is closed, IDX and Allscripts may not be successful in
implementing or realizing benefits from their strategic alliance.

                                 Page 18 of 30

<PAGE>


IDX MAY NOT BE SUCCESSFUL IN IMPLEMENTING ITS RESTRUCTURING PROGRAM. IDX intends
to achieve  efficiencies  through the  discontinuance  of development  and sales
activities of certain product lines and a workforce reduction. IDX may not fully
realize  these  efficiencies.  Factors that may affect IDX's  ability to realize
efficiencies include:

        o         the successful  negotiation of  satisfactory  compensation
                  arrangements  with customers of the discontinued product
                  lines;
        o         the ability to manage work with fewer  employees;  and
        o         the ability to fill vacated  positions  with  qualified
                  employees in a highly competitive labor market.

IDX'S SUCCESS  DEPENDS ON NEW PRODUCT  DEVELOPMENT AND ITS ABILITY TO RESPOND TO
RAPIDLY  CHANGING  TECHNOLOGY.  To be successful,  IDX must enhance its existing
products,  respond  effectively to technology changes and help its clients adopt
new technologies.  In addition, IDX must introduce new products and technologies
to meet the evolving needs of its clients in the healthcare  information systems
market. IDX may have difficulty in accomplishing this because of:

          o       the continuing  evolution of industry standards,
                  for  example,  transaction  standard  pursuant  to the  Health
                  Insurance  Portability and Accountability Act of 1996 (HIPAA);
                  and
          o       the creation of new technological developments, for example,
                  Internet and application service provider technology.

IDX is  currently  devoting  significant  resources  toward the  development  of
enhancements   to  its   existing   products,   particularly   in  the  area  of
Internet-based  functionality  and the  migration  of  existing  products to new
hardware and  software  platforms,  including  relational  database  technology,
object-oriented   programming  and  application  service  provider   technology.
However,  IDX may not  successfully  complete these product  developments or the
adaptation in a timely  fashion,  and IDX's  current or future  products may not
satisfy the needs of the healthcare  information  systems  market.  Any of these
developments  may  adversely  affect  IDX's  competitive  position or render its
products or technologies noncompetitive or obsolete.

IDX'S BUSINESS WILL BE HARMED,  AND THE VALUE OF ALLSCRIPTS STOCK TO BE RECEIVED
FOR  THE  SALE OF  CHANNELHEALTH  TO  ALLSCRIPTS  MAY BE  DIMINISHED, IF IDX AND
CHANNELHEALTH   CANNOT  MAINTAIN  THEIR  STRATEGIC   ALLIANCE   AGREEMENTS  WITH
HEALTHEON/WEBMD.  On June 8, 2000, ChannelHealth and IDX entered into agreements
with Healtheon/WebMD Corp. pursuant to which  Healtheon/WebMD  agreed to provide
electronic  transaction  services and content to ChannelHealth and IDX. Pursuant
to  the  agreement,   Healtheon/WebMD's   content  is  to  be  integrated   into
ChannelHealth's   Physician  Channel  and  Patient  Channel  Internet  services.
Healtheon/WebMD  further committed to a multi-million  dollar campaign promoting
IDX and  ChannelHealth  products and services that  incorporate  Healtheon/WebMD
content and  transactions.  Healtheon/WebMD  has  recently  informed IDX that it
believes  ChannelHealth  and IDX will be unable to perform their  obligations to
Healtheon/WebMD if the proposed strategic alliance between Allscripts and IDX is
consummated.  Healtheon/WebMD  also stated that it would seek to  terminate  its
agreement with ChannelHealth and propose a "restructured" relationship with IDX.
Such proposal has not been  received by IDX. IDX believes  that  ChannelHealth's
and IDX's  performance  will not be  impaired  by the  strategic  alliance  with
Allscripts  and  that  Healtheon/WebMD  does  not  have a basis  for  unilateral
termination of the  ChannelHealth  agreement or restructuring the IDX agreement.
In the event the  Healtheon/WebMD  agreement with  ChannelHealth  is terminated,
ChannelHealth's  expected  revenues  for 2001 may be  significantly  lower  than

                                 Page 19 of 30

<PAGE>


currently anticipated, their business may be harmed, and Allscripts' stock price
may fall.

POLITICAL,  ECONOMIC AND REGULATORY  CHANGES AND CONSOLIDATION IN THE HEALTHCARE
INDUSTRY  MAY  CAUSE  IDX  TO  SUFFER   FINANCIALLY.   IDX   currently   derives
substantially  all of its revenues from sales of financial,  administrative  and
clinical  healthcare   information  systems  and  related  services  within  the
healthcare industry. As a result, the success of IDX is dependent in part on the
political and economic conditions in the healthcare industry.

Virtually  all of IDX's  customers  and the other  entities with which IDX has a
business  relationship  operate in the healthcare industry and, as a result, are
subject to governmental regulation,  including Medicare and Medicaid regulation.
Accordingly,  IDX's  customers  and the  other  entities  with  which  IDX has a
business   relationship   are  affected  by  changes  in  such  regulations  and
limitations in governmental spending for Medicare and Medicaid programs.  Recent
actions by Congress  have  limited  governmental  spending  for the Medicare and
Medicaid programs,  limited payments to hospitals and other providers under such
programs,  and  increased  emphasis  on  competition  and  other  programs  that
potentially  could  have an  adverse  effect  on IDX's  customers  and the other
entities with which IDX has a business  relationship.  In addition,  Federal and
state  legislatures  have  considered  proposals  to reform the U.S.  healthcare
system at both the federal and state level.  If enacted,  these  proposals could
increase  government  involvement in healthcare,  lower  reimbursement rates and
otherwise  change the  business  environment  of IDX's  customers  and the other
entities  with which IDX has a business  relationship.  IDX's  customers and the
other entities with which IDX has a business  relationship  could react to these
proposals  and the  uncertainty  surrounding  these  proposals by  curtailing or
deferring investments, including those for IDX's products and services.

In addition,  many healthcare  providers have  consolidated to create integrated
healthcare  delivery systems with greater market power.  These providers may try
to use their market power to negotiate  price  reductions for IDX's products and
services.  If IDX were forced to reduce its prices,  its operating margins would
decrease.  As the healthcare  industry  consolidates,  competition for customers
will become more intense and the  importance  of acquiring  each  customer  will
become greater.

THERE IS INTENSE  COMPETITION IN THE MARKET FOR HEALTHCARE  INFORMATION  SYSTEMS
AND IF IDX FAILS TO  COMPETE  SUCCESSFULLY,  IDX WILL  SUFFER  FINANCIALLY.  The
market for  healthcare  information  systems is intensely  competitive,  rapidly
evolving  and  subject to rapid  technological  change.  IDX  believes  that the
principal  competitive factors in this market include the breadth and quality of
system and product offerings,  the features and capabilities of the systems, the
price of system and product offerings,  the ongoing support for the systems, and
the potential for enhancements and future compatible products.

Some  of  IDX's   competitors  have  greater   financial,   technical,   product
development, marketing and other resources than IDX, and some of its competitors
offer  products  that  it does  not  offer.  The  Company's  principal  existing
competitors include Cerner  Corporation,  Eclipsys  Corporation,  McKesson HBOC,
Inc., Shared Medical Systems Corporation,  MedQuist, Medic and Epic Systems each
of which offers a suite of products  that  compete with many of IDX's  products.
There  are other  competitors  that  offer a more  limited  number of  competing
products.  Many of IDX's competitors have also announced or introduced  Internet
strategies that will compete with IDX's Internet applications and services.  IDX
may be unable to compete successfully against these organizations.  In addition,
IDX expects that major software information systems companies, large information
technology consulting service providers and system integrators, Internet-based

                                 Page 20 of 30

<PAGE>

start-up companies and others  specializing in the healthcare industry may offer
competitive products or services.

IDX MAY BE FACED WITH PRODUCT LIABILITY CLAIMS EXCEEDING ITS INSURANCE COVERAGE.
Any failure by IDX's  products  that  provide  applications  relating to patient
medical  histories  and  treatment  plans could expose IDX to product  liability
claims.  These  potential  claims may exceed IDX's current  insurance  coverage.
Unsuccessful  claims  could be costly to defend and divert  management  time and
resources.  In  addition,  IDX cannot  assure you that it will  continue to have
appropriate  insurance available to it in the future at commercially  reasonable
rates.

IDX'S SUCCESS IS SIGNIFICANTLY DEPENDENT ON KEY PERSONNEL. The success of IDX is
dependent to a significant degree on its key management,  sales, marketing,  and
technical  personnel.  To be successful  IDX must  attract,  motivate and retain
highly skilled managerial, sales, marketing, consulting and technical personnel,
including programmers,  consultants, systems architects skilled in the technical
environments in which IDX's products operate.  Competition for such personnel in
the  software  and  information  services  industries  is intense.  IDX does not
maintain "key man" life insurance policies on any of its executives. Not all IDX
personnel have executed noncompetition agreements.

GOVERNMENT REGULATION MAY IMPOSE BURDENS AND COSTS ON IDX'S OPERATIONS.
Virtually  all of IDX's  customers  and the other  entities with which IDX has a
business  relationship  operate in the healthcare industry and, as a result, are
subject to  governmental  regulation.  Because  IDX's  products and services are
designed  to function  within the  structure  of the  healthcare  financing  and
reimbursement  systems currently in place in the United States,  and because IDX
is pursuing a strategy of developing  and  marketing  products and services that
support its customers' regulatory and compliance efforts, IDX may become subject
to the reach of, and liability under, these regulations.

The Federal  Anti-Kickback  Law,  among other  things,  prohibits  the direct or
indirect  payment or receipt of any  remuneration  for  Medicare,  Medicaid  and
certain  other  Federal  or  state  healthcare  program  patient  referrals,  or
arranging for or  recommending  referrals or other business paid for in whole or
in  part  by the  federal  health  care  programs.  Violations  of  the  Federal
Anti-Kickback  Law may  result in civil and  criminal  sanction  and  liability,
including the temporary or permanent  exclusion of the violator from  government
health  programs,  treble damages and imprisonment for up to five years for each
violation. If the activities of a customer of IDX or other entity with which IDX
has a business  relationship were found to constitute a violation of the Federal
Anti-Kickback  Law and IDX, as a result of the provision of products or services
to such customer or entity,  was found to have  knowingly  participated  in such
activities,  IDX could be  subject to  sanction  or  liability  under such laws,
including the exclusion of IDX from government  health programs.  As a result of
exclusion from government health programs,  IDX customers would not be permitted
to make any payments to IDX.

The  Federal  Civil  False  Claims  Act and the  Medicare/Medicaid  Civil  Money
Penalties  regulations  prohibit,  among other things,  the filing of claims for
services  that were not provided as claimed,  which were for services  that were
not medically necessary, or which were otherwise false or fraudulent. Violations
of these laws may result in civil damages, including treble and civil penalties.
In  addition  the  Medicare/Medicaid  and other  Federal  statutes  provide  for
criminal penalties for such false claims, including fines and imprisonment.  If,
as a result of the  provision by IDX of products or services to its customers or
other  entities  with  which  IDX  has a  business  relationship,  IDX  provides

                                 Page 21 of 30


<PAGE>

assistance with the provision of inaccurate  financial reports to the government
under these regulations,  or IDX is found to have knowingly recorded or reported
data relating to inappropriate payments made to a healthcare provider, IDX could
be subject to liability under these laws.

HIPAA contains provisions  regarding  standardization,  privacy,  security,  and
administrative  simplification  in healthcare.  As a result of  regulations  now
proposed under HIPAA, IDX will make  investments to support customer  operations
in areas, such as:

         o        electronic data transactions;
         o        computer system security; and
         o        patient privacy.

Although it is not possible to anticipate  the final form of  regulations  under
HIPAA,  IDX has made and  expects to  continue  to make  investments  in product
enhancements  to  support  customer  operations  that are  regulated  by  HIPAA.
Responding to HIPAA's impact may require IDX to make investments in new products
or charge  higher  prices.  It may be expensive  to implement  security or other
measures designed to comply with any new legislation or regulation.
The United States Food and Drug  Administration  has  promulgated a draft policy
for the regulation of computer  software  products as medical  devices under the
1976 Medical  Device  Amendments to the Federal Food,  Drug and Cosmetic Act. To
the extent that computer software is a medical device under the policy,  IDX, as
a manufacturer  of such products,  could be required,  depending on the product,
to:

         o        register and list its products with the FDA;
         o        notify the FDA and demonstrate substantial equivalence to
                  other products on the market before marketing such
                  products; or
         o        obtain FDA approval by demonstrating safety and effectiveness
                  before marketing a product.

Depending on the intended use of a device,  the FDA could  require IDX to obtain
extensive data from clinical studies to demonstrate safety or effectiveness,  or
substantial equivalence. If the FDA requires this data, IDX would be required to
obtain  approval  of an  investigational  device  exemption  before  undertaking
clinical trials.  Clinical trials can take extended periods of time to complete.
IDX cannot provide  assurances that the FDA will approve or clear a device after
the completion of such trials.  In addition,  these products would be subject to
the Federal Food,  Drug and Cosmetic  Act's 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,  IDX expects that the FDA is likely to become
increasingly  active  in  regulating  computer  software  intended  for  use  in
healthcare settings regardless of whether the draft is finalized or changed. The
FDA can impose extensive  requirements governing pre- and post-market conditions
like service  investigation,  approval,labeling and manufacturing.  In addition,
the FDA can impose extensive  requirements  governing  development  controls and
quality assurance processes.

SYSTEM ERRORS IN IDX'S  HEALTHCARE  INFORMATION  SYSTEMS COULD CAUSE  UNFORESEEN
LIABILITIES.  IDX's  healthcare  information  systems are very complex.  As with
complex  systems offered by others,  IDX's  healthcare  information  systems may
contain errors,  especially when first introduced.  IDX's healthcare information
systems are intended to provide  information to healthcare  providers for use in

                                 Page 22 of 30

<PAGE>


the diagnosis and treatment of patients.  Therefore, users of IDX's products may
have a greater  sensitivity  to  system  errors  than the  market  for  software
products generally. Failure of an IDX customer's system to perform in accordance
with its documentation  could constitute a breach of warranty and require IDX to
incur  additional   expense  in  order  to  make  the  system  comply  with  the
documentation.  If such failure is not timely  remedied,  it could  constitute a
material breach under a contract  allowing the client to cancel the contract and
subject IDX to liability.

CLAIMS BY OTHER COMPANIES THAT IDX'S PRODUCTS INFRINGE THEIR PROPRIETARY  RIGHTS
COULD  HINDER  OR BLOCK  IDX'S  ABILITY  TO SELL ITS  PRODUCTS,  SUBJECT  IDX TO
SIGNIFICANT  MONETARY  LIABILITY  AND  DIVERT  THE  TIME  AND  ATTENTION  OF ITS
MANAGEMENT. If any of IDX's products violate third party proprietary rights, IDX
may be required to reengineer its products or seek to obtain licenses from third
parties to continue offering its products without substantial reengineering. Any
efforts to reengineer  IDX's products or obtain  licenses from third parties may
not be  successful,  in  which  case  IDX  may be  forced  to stop  selling  the
infringing  product or remove the infringing  functionality or feature.  IDX may
also become subject to damage awards as a result of infringing  the  proprietary
rights of others,  which could cause IDX to incur additional  losses and have an
adverse  impact on its financial  position.  IDX does not conduct  comprehensive
patent  searches to  determine  whether the  technologies  used in its  products
infringe patents held by others. In addition,  product development is inherently
uncertain in a rapidly evolving technological  environment in which there may be
numerous patent applications pending, many of which are confidential when filed,
with regard to similar technologies.

IDX'S  COMPETITIVE  POSITION  WOULD BE  ADVERSELY  AFFECTED IF IT WERE UNABLE TO
PROTECT  ITS  PROPRIETARY  TECHNOLOGY.  IDX's  success and  competitiveness  are
dependent  to  a  significant  degree  on  the  protection  of  its  proprietary
technology.  IDX relies  primarily on a combination of copyrights,  trade secret
laws and  restrictions  on  disclosure  to protect its  proprietary  technology.
Despite  these  precautions,  others  may be able to  copy or  reverse  engineer
aspects of IDX's  products,  to obtain and use  information  that IDX regards as
proprietary or to independently  develop similar  technology.  Litigation may be
necessary in the future to enforce or defend IDX's proprietary  technology or to
determine  the  validity  and scope of the  proprietary  rights of others.  This
litigation,  whether  successful or  unsuccessful,  could result in  substantial
costs and diversion of management and technical resources.

IDX MAY HAVE  CONFLICTS OF  INTERESTS  WITH SOME OF ITS  EXECUTIVES.  Richard E.
Tarrant,  President,  Chief Executive Officer and Director, and Robert H. Hoehl,
Chairman of the Board of Directors,  indirectly own,  through various  entities,
real estate which IDX leases in connection with its operations. During the first
nine months of 2000,  IDX paid an  aggregate  of  approximately  $1.3 million in
connection with these leases.  IDX currently leases its headquarters  facilities
in South  Burlington,  Vermont  from a real  estate  entity  owned by Richard E.
Tarrant  and Robert H.  Hoehl.  IDX has  commenced  a $16  million  construction
project to expand its office  facilities at that  location.  In connection  with
these arrangements, the economic interests of these executives and directors and
IDX may diverge.

The  following  important  factors  affect our  Internet  services  and  content
business segment or "ChannelHealth" business:

CHANNELHEALTH'S  LIMITED  OPERATING  HISTORY MAY MAKE IT  DIFFICULT TO VALUE AND
EVALUATE ITS BUSINESS AND FUTURE PROSPECTS.  ChannelHealth  commenced operations
October 1999 and only recently  commercially  released its first  internet-based
product.  An  evaluation  of the  risks  and  uncertainties  of  ChannelHealth's

                                 Page 23 of 30


<PAGE>

business will be difficult because of ChannelHealth's limited operating history.
In addition,  ChannelHealth's  limited  operating history means that it has less
insight  into how  technological  and market  trends may affect its  business as
evidenced by the loss on goodwill  impairment  of $5.8 million in the first year
of 2000  due to a  change  in its  content  strategy.  The  revenue  and  income
potential of ChannelHealth's  business and market are unproven, and its business
model is emerging and unproven.  ChannelHealth's  business and prospects must be
considered  in light of the  risks and  difficulties  typically  encountered  by
businesses in their early stages of development,  particularly  those in new and
rapidly evolving markets such as the Internet healthcare information industry.

CHANNELHEALTH  HAS  INCURRED  SUBSTANTIAL  LOSSES TO DATE AND MAY NOT BE ABLE TO
ACHIEVE OR MAINTAIN  PROFITABILITY.  ChannelHealth  has incurred losses since it
began  operations.  ChannelHealth  incurred  a net loss of $16.2  million in the
first  nine  months of 2000 and a net loss of $5.5  million  for the year  ended
December 31, 1999, and its accumulated  deficit  through  September 30, 2000 was
$21.7  million.  ChannelHealth  cannot  be  certain  if or when  it will  become
profitable.  ChannelHealth's  failure to become  profitable within the timeframe
expected by IDX investors or at all may adversely affect the market price of IDX
Common Stock.  ChannelHealth  expects to continue to increase its expenses in an
effort  to  develop  its  business  and,  as a  result,  will  need to  generate
significant revenue to achieve profitability. Even if ChannelHealth does achieve
profitability,  there can be no  assurance  that  ChannelHealth  can  sustain or
increase profitability on a quarterly or annual basis in the future.

CURRENTLY,  CHANNELHEALTH'S  BUSINESS  DEPENDS ON  INTEGRATING  INTERNET-RELATED
TECHNOLOGY INTO ITS CUSTOMERS'  BUSINESSES,  AND, AS A RESULT, ITS BUSINESS WILL
SUFFER IF USE OF THE INTERNET AS A MEANS FOR COMMERCE  DECLINES.  If commerce on
the Internet does not continue to grow or grows slower than  expected,  the need
for ChannelHealth's  Internet healthcare information products and services could
decline,  resulting  in fewer  projects  and  reduced  revenues.  Consumers  and
businesses may reject the Internet as a viable commercial medium for a number of
reasons, including:

        o        actual or perceived lack of security of information;
        o        lack of access and ease of use;
        o        congestion of Internet traffic or other usage delays;
        o        inconsistent quality of service;
        o        increase in access costs to the Internet;
        o        evolving government regulation;
        o        uncertainty regarding intellectual property ownership;
        o        costs associated with the obsolescence of existing
                 infrastructure; and
        o        economic viability of the Internet commerce model.

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.

The adoption of Internet  solutions by healthcare  participants will require the
acceptance of a new way of conducting business and exchanging  information.  The
healthcare industry, in particular,  relies on legacy systems that may be unable
to benefit from ChannelHealth's  Internet healthcare  information  services.  To
maximize the benefits of ChannelHealth's services,  healthcare participants must
be  willing  to allow  sensitive  information  to be stored  in  ChannelHealth's
databases.  ChannelHealth can process  transactions for healthcare  participants
that maintain  information  on their own  proprietary  databases.  However,  the

                                 Page 24 of 30

<PAGE>


benefits of ChannelHealth's  connectivity and sophisticated services are limited
under these circumstances.  Customers using legacy and client-server systems may
refuse  to adopt  new  systems  when they  have  made  extensive  investment  in
hardware, software and training for older systems.

GOVERNMENT   REGULATION   COULD  ADVERSELY  AFFECT   CHANNELHEALTH'S   BUSINESS.
ChannelHealth's  business will be subject to government regulation.  Existing as
well as new laws and regulations  could adversely affect its business.  Laws and
regulations  may be  adopted  with  respect  to the  Internet  or other  on-line
services covering issues such as:

        o        user privacy;
        o        system security;
        o        pricing;
        o        content;
        o        copyrights;
        o        distribution; and
        o        characteristics and quality of products and services.

The  applicability  to the  Internet of existing  laws in various  jurisdictions
governing issues such as property  ownership,  sales and other taxes,  libel and
personal  privacy  is  uncertain  and may take  years  to  resolve.  Demand  for
ChannelHealth's   applications  and  services  may  be  adversely   affected  by
additional regulation of the Internet.

IF CHANNELHEALTH SYSTEMS EXPERIENCE SECURITY BREACHES OR ARE OTHERWISE PERCEIVED
TO BE INSECURE,  CHANNELHEALTH'S REPUTATION AND BUSINESS WILL SUFFER. A material
security  breach could damage  ChannelHealth's  reputation,  cause users to lose
confidence in ChannelHealth's systems or result in liability. ChannelHealth will
retain confidential  customer and patient information in its processing centers.
ChannelHealth may be required to spend  significant  capital and other resources
to  protect  against  security  breaches  or to  alleviate  problems  caused  by
breaches. Any well-publicized compromise of Internet security could deter people
from  using  the  Internet  or  from   conducting   transactions   that  involve
transmitting   confidential   information,   including  confidential  healthcare
information.  Therefore, it is critical that these facilities and infrastructure
remain secure and are  perceived by the  marketplace  to be secure.  Despite the
implementation of security  measures,  this  infrastructure may be vulnerable to
physical  break-ins,  computer  viruses,  programming  errors,  attacks by third
parties or similar disruptive problems. Any damage to ChannelHealth's reputation
or loss of user  confidence  as a result of a security  breach  could reduce the
willingness  of patients  and  physicians  to use  ChannelHealth's  products and
services and as a result, adversely affect ChannelHealth's business.

CHANNELHEALTH DEPENDS UPON A SINGLE TRANSACTION SERVICE PROVIDER TO PROVIDE MOST
OF  CHANNELHEALTH'S  TRANSACTION  SERVICES  AND IF THAT  PROVIDER  IS  UNABLE OR
UNWILLING TO PROVIDE  SUCH  SERVICES,  CHANNELHEALTH  MAY NOT BE ABLE TO PROVIDE
SERVICE TO ITS CUSTOMERS. ChannelHealth currently relies on ProxyMed for most of
its  electronic  transaction  services.  ChannelHealth's  reliance  on a  single
provider  of these  services  exposes  ChannelHealth,  and IDX as a reseller  of
ChannelHealth's  products and services, to a number of risks, including the loss
of customer  goodwill  and  possible  liability,  if  ProxyMed  fails to provide
transaction  services.  If  ProxyMed  is unable or  unwilling  to  provide  such
services to  ChannelHealth  on a timely  basis,  ChannelHealth  may be forced to
engage  additional or  replacement  providers,  which could result in additional
expenses and delays and disruptions in ChannelHealth's service.

                                 Page 25 of 30

<PAGE>


PERFORMANCE  PROBLEMS WITH THE SYSTEMS OF CHANNELHEALTH'S  TRANSACTION,  SERVICE
AND CONTENT PROVIDERS COULD HARM  CHANNELHEALTH'S  BUSINESS.  ChannelHealth will
depend on service and content providers to provide  transactions and information
on a timely basis.  ChannelHealth's  Web sites could  experience  disruptions or
interruptions  in service  due to the  failure or delay in the  transmission  or
receipt of this information. In addition,  ChannelHealth's customers will depend
on Internet  service  providers,  online  service  providers  and other Web site
operators for access to our Web sites.  All of these providers have  experienced
significant outages in the past and could experience  outages,  delays and other
difficulties in the future due to system failures  unrelated to  ChannelHealth's
systems. Any significant  interruptions in ChannelHealth's services or increases
in response  time could  result in a loss of  potential  or existing  customers,
strategic partners, advertisers or sponsors and, if sustained or repeated, would
likely reduce the attractiveness of ChannelHealth's services.

                                 Page 26 of 30

<PAGE>


PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS


         The legal  procedings  involving the Company, its  subsidiary
         Channelhealth Incorporated and ProxyMed, Inc. have been settled and
         terminated.

         The  Company  is from  time  to time  involved  in  routine  litigation
         incidental to the conduct of its business. The Company believes that no
         such  currently  pending  routine  litigation to which it is party will
         have a material adverse effect on its financial condition or results of
         operations.

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

         Shareholder Proposals for 2000 Annual Meeting

         As set  forth in the  Company's  Proxy  Statement  for its 2000  Annual
         Meeting of Stockholders,  shareholders, proposals submitted pursuant to
         Rule 14a-8 under the Exchange Act for inclusion in the Company's  proxy
         materials for its 2001 Annual Meeting of Stockholders  must be received
         by the Secretary of the Company at the principal offices of the Company
         no later than March 7, 2001.

        In addition, in accordance with recent amendments to Rules 14a-4, 14a-5
        and 14a-8 under the Exchange Act, written notice of stockholder
        proposals submitted outside the processes of Rule 14a-8 for
        consideration at the 2001 Annual Meeting of  Stockholders  must be
        received by the Company on or before  March 7, 2001 in order to be
        considered timely for purpose of Rule 14a-4. The persons  designated
        in the  Company's  proxy  statement  and  management  proxy card will be
        granted discretionary authority with respect to any stockholder proposal
        with respect to which the Company does not receive timely notice.

                                 Page 27 of 30

<PAGE>


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)  On July 20, 2000,  the Company filed a report on Form 8-K,  reporting the
     Agreement and Plan of Merger dated July 13, 2000, by and among Allscripts
     Holding,  Inc.,  Allscripts,  Inc., Bursar  Acquisition,  Inc., Bursar
     Acquisition No. 2., Inc., IDX Systems Corporation and Channelhealth
     Incorporated.


                                 Page 28 of 30

<PAGE>


                                   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



                                              /S/ JOHN A. KANE
Date: November 14, 2000                   By:____________________________
                                             John A. Kane,
                                             Vice President, Finance and
                                             Administration, Chief Financial
                                             Officer and Treasurer
                                             (Principal Financial and
                                              Accounting Officer)

                                 Page 29 of 30

<PAGE>



                                  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>

27                Financial Data Schedule                                  31

</TABLE>


                                 Page 30 of 30