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


                                  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, 1999
                         -------------------------------

                         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 11, 1999 was 27,779,914.


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

                        [Exhibit index begins on Page 24]


<PAGE>


                             IDX SYSTEMS CORPORATION
                                    FORM 10-Q
                For the Quarterly Period Ended September 30, 1999


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>


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

   ITEM 1.  INTERIM FINANCIAL STATEMENTS..................................3

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

            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.....................................10

PART II.    OTHER INFORMATION

   ITEM 1.  LEGAL PROCEEDINGS.............................................22

   ITEM 2.  CHANGES IN SECURITIES.........................................22

   ITEM 3.  DEFAULTS UPON SENIOR SECURITIES...............................22

   ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...........22

   ITEM 5.  OTHER INFORMATION.............................................22

   ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K..............................22


SIGNATURES................................................................23


EXHIBIT INDEX.............................................................24

</TABLE>

                                   Page 2 of 24


<PAGE>



PART I.   FINANCIAL INFORMATION

Item 1.   Interim Financial Statements

                             IDX Systems Corporation
                      Condensed Consolidated Balance Sheets
                                 (in thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>



                                       September 30,          December 31,
                                            1999                  1998
                                       -----------------      ----------------
<S>                                    <C>                    <C>

ASSETS
Cash and marketable securities         $  73,896              $ 125,132
Accounts receivable, net                 111,374               102,179
Income taxes receivable                    4,720                     -
Other current assets                       6,644                 5,403
Deferred tax asset                         4,720                 4,720
                                       -----------------     ----------------

Total current assets                     201,354               237,434
Property and equipment, net               54,545                35,949
Capitalized software costs, net              470                  665
Other assets                              16,938                12,868
Deferred tax asset                         2,307                 2,307
                                       -----------------     ----------------

Total assets                           $ 275,614              $ 289,223
                                       =================      ================

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, accrued expenses
   and other liabilities                $ 44,322              $ 38,484
Short-term debt                                -                 5,611
Income taxes                                   -                 5,429
Deferred revenue                          17,801                18,239
                                       -----------------     ----------------

Total current liabilities                 62,123                67,763

Long-term debt                                 -                 2,261
Minority interest                          9,100                 8,988
Stockholders' equity                     204,391               210,211
                                       -----------------     ----------------

Total liabilities and stockholders'
  equity                               $ 275,614             $ 289,223
                                       =================     ================

</TABLE>



          See Notes to the Condensed Consolidated Financial Statements
                  Restated for Comparison Purposes - See Note 1

                                   Page 3 of 24

<PAGE>


                             IDX Systems Corporation
                      Consolidated Statements of Operations
                      (in thousands, except per share data)
                                   (Unaudited)
<TABLE>
<CAPTION>


                              Three Months Ended          Nine Months Ended
                                 September 30,              September 30,

                              1999         1998           1999        1998
                              ------       ------         ------      ------
<S>                           <C>          <C>            <C>         <C>

REVENUES
Systems sales                 $ 34,365     $ 46,678       $ 94,944    $129,363
Maintenance and service fees    57,853       44,259        158,179     126,545
                              --------     --------       --------    --------

TOTAL REVENUES                  92,218       90,937        253,123     255,908

OPERATING EXPENSES
Cost of sales                   56,442       50,362        161,540     142,823
Selling, general and
  administrative                21,616       17,385         62,815      48,548
Research and development        12,733       12,587         39,921      35,025
Nonrecurring charge                  -            -          4,045       3,201
                              --------     --------       --------     -------
TOTAL OPERATING EXPENSES        90,791       80,334        268,321     229,597

OPERATING INCOME (LOSS)          1,427       10,603        (15,198)     26,311

Other (income) expense            (537)      (1,246)        (1,796)     (3,242)
Loss on impairment of asset          -            -          1,642           -
                              --------      -------       --------    ---------

Income (loss) before taxes       1,964       11,849        (15,044)     29,553

Income tax provision (benefit)     786        5,650         (5,394)     15,990
                              --------      -------       --------    --------

NET INCOME (LOSS)             $  1,178     $  6,199       $ (9,650)   $ 13,563
                              ========     ========       ========    ========

BASIC EARNINGS (LOSS) PER
  SHARE                       $   0.04     $   0.23       $  (0.35)   $   0.50
                              ========     ========       ========    ========
Basic weighted average
  shares outstanding            27,767       27,427         27,701      27,292
                              ========     ========       ========    ========

Diluted earnings (loss)
  per share                   $   0.04     $   0.22       $  (0.35)   $   0.48
                              ========     ========       ========    ========
Diluted weighted average
  shares outstanding            28,271       28,279         27,701      28,156
                              ========     ========       ========    ========
</TABLE>


          See Notes to the Condensed Consolidated Financial Statements
                  Restated for Comparison Purposes - See Note 1

                                   Page 4 of 24

<PAGE>


                             IDX Systems Corporation
                 Condensed Consolidated Statements of Cash Flows
                                 (in thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                         Nine Months Ended
                                                           September 30,
                                                     1999             1998
                                                    ---------         --------
<S>                                                 <C>               <C>

Operating Activities
Net income (loss)                                   $ (9,650)         $13,564
Adjustments to reconcile net income
  (loss) to net cash (used in)
   provided by operating activities:
    Depreciation and amortization                     11,222            9,398
    Deferred tax benefit, net of business
      acquisitions                                         -             (517)
    Increase in allowance for doubtful
      accounts                                           585              118
    Minority interest                                    112              301
    Loss on investment                                 1,642                -
    Write-off of acquired in-process
      research and development costs                       -            3,201
    Changes in operating assets and liabilities,
      net of business acquisitions:
       Accounts receivable                            (9,780)         (15,168)
       Prepaid expenses and other assets               1,179            2,644
       Accounts payable and accrued expenses           5,839           (3,102)
       Federal and state taxes payable               (10,149)           6,339
       Deferred revenue                                 (438)          (3,654)
                                                -------------     ------------

          Net cash (used in) provided by
           operating activities                       (9,438)          13,124

Investing Activities
Purchase of property and equipment, net              (28,177)         (11,545)
Purchase of securities available-for-sale           (178,246)         (83,216)
Sale of securities available-for-sale                246,753           75,133
Business acquisitions                                 (6,500)               -
Other assets                                          (3,077)          (7,545)
                                                --------------    ------------

          Net cash provided by (used in)
             investing activities                     30,753          (27,173)

Financing Activities
Proceeds from sale of common stock                     4,063           11,728
Proceeds from debt issuances                           3,501            8,935
Contributions to affiliates, net                           -            6,500
Principal repayments of debt                         (11,373)          (9,324)
                                                --------------   -------------

          Net cash (used in) provided by
             financing activities                     (3,809)          17,839
                                                --------------   -------------

Increase in cash and cash equivalents                 17,506            3,790

Cash and cash equivalents at beginning
  of period                                           11,558           14,741
                                                --------------   -------------

Cash and cash equivalents at end of period          $ 29,064         $ 18,531
                                                ==============   =============

</TABLE>



          See Notes to the Condensed Consolidated Financial Statements
                  Restated for Comparison Purposes - See Note 1

                                   Page 5 of 24

<PAGE>


Notes to Condensed Consolidated Financial Statements

Note 1 - Basis of Presentation

All  financial  information  for  previously  reported  periods  included in the
accompanying  interim unaudited condensed  consolidated  financial statements of
IDX Systems  Corporation  ("Company"  or "IDX") has been restated to reflect the
combined  operations  of IDX and EDiX  Corporation  ("EDiX")  as a result of the
merger,  more fully described in Note 3, which was accounted for as a pooling of
interests  during the quarter ended June 30, 1999. No adjustments  were required
to  conform  the  financial  reporting  policies  of IDX and  EDiX  for  periods
presented.

The interim unaudited  consolidated  financial  statements have been prepared by
the Company pursuant to the rules and regulations of the Securities and Exchange
Commission and in accordance  with  generally  accepted  accounting  principles.
Accordingly,  certain information and footnote  disclosures normally included in
annual  financial  statements have been omitted or condensed.  In the opinion of
management,  all  necessary  adjustments  have  been  made  to  provide  a  fair
presentation. The operating results for the nine months ended September 30, 1999
are not necessarily  indicative of the results that may be expected for the year
ending  December 31, 1999. For further  information,  refer to the  consolidated
financial  statements  and  footnotes  included in the  Company's  latest annual
report on Form 10-K.

Note 2 - New Accounting Standards

In March 1998, the American  Institute of Certified  Public  Accountants  issued
Statement  of  Position  ("SOP")  98-1,  "Accounting  for the Costs of  Computer
Software  Developed or Obtained for Internal Use",  which the Company adopted as
of December 31, 1998. SOP 98-1 requires capitalization of certain costs incurred
in connection with developing or obtaining  internal use software.  In the prior
year, the Company expensed such costs as incurred. This accounting change had no
effect on net income (loss) for the three month period ended  September 30, 1999
and increased net income per diluted share by $0.01 for the same period in 1998.
For the nine month  period  ended  September  30,  1999 this  accounting  change
decreased the net loss per share by $0.01,  and  increased  earnings per diluted
share by $0.01 for the comparable period in 1998.

Note 3 - Business Acquisitions

On February 23, 1998, the Company  recorded  charges of $3.2 million  related to
the  acquisition of contract  management  system  technology from Trego Systems,
Inc. for cash of $4.0  million.  The  acquisition  was  accounted  for under the
purchase  method.   The  charges  were  expensed  as  in-process   research  and
development  costs in connection with the Company's  development of a healthcare
contract management system.

On  April  23,  1999,   the  Company   acquired  EDiX,  a  provider  of  medical
transcription  outsourcing  services  to  hospitals  and large  physician  group
practices.  The  terms  of the  agreement  provided  for  the  shareholders  and
optionholders  of EDiX to receive  approximately  1,000,000 shares of IDX common
stock. Based on the closing price of the IDX common stock on April 23, 1999, the
transaction is valued at  approximately  $16.7  million,  plus the assumption of
EDiX  debt  of  approximately  $14.0  million.  This  transaction  has not had a
dilutive  effect on dilute earnings per share in 1999 compared to 1998. The EDiX
organization will operate as EDiX, a division of IDX Systems Corporation.

The acquisition  was accounted for as a pooling of interests  during the quarter
ended  June 30,  1999 and all  historical  information  of the  Company  for all
periods presented has been restated to include EDiX's operating results.  During
the second  quarter ended June 30, 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 computer equipment, of $1.4 million and other merger related
costs of  $200,000,  principally  noncompatible  related  to  integration  costs
incurred during the period and the  termination of leases and other  contractual
obligations.

On April 1, 1999, the Company  acquired an 80% interest in  Channelhealth,  Inc.
for $6.5 million and may pay an additional $3.0 million, contingent upon certain
performance  goals.  The  acquisition  will be accounted  for under the purchase
method.

                                   Page 6 of 24

<PAGE>


On June 23, 1999, the Company acquired all of the assets of  DietSite.com,  Inc.
for $1.5  million.  DietSite.com  is a website which  includes  disease-oriented
dietary  information  with  extensive  proprietary  content on diets,  vitamins,
herbals and nutritionals.  Channelhealth,  Inc. and DietSite.com will be managed
and operated with the Company's other web technology  initiatives in a separate,
majority-owned subsidiary. Channelhealth will offer three Internet channels that
integrate the core practice  management  systems with  extensive  Internet-based
services and clinically valid content.

Note 4 - Income Taxes

The tax benefit in 1999 is lower than that expected  based on the statutory rate
principally  due to the  non-deductible  nature  of  certain  transaction  costs
related to business  acquisitions.  The 1998 tax  provision  is higher than that
expected based on the statutory rate principally due to losses of EDiX for which
no tax benefit has been recognized.

Note 5 - Comprehensive Income

As of January 1, 1998,  the Company  adopted  Statement of Financial  Accounting
Standard (SFAS) No. 130, "Reporting  Comprehensive Income". SFAS 130 establishes
new  rules  for the  reporting  and  display  of  comprehensive  income  and its
components;  however,  the  adoption  of this  statement  had no  impact  on the
Company's net income or stockholders' equity. SFAS 130 requires unrealized gains
or losses on the Company's available-for-sale securities which prior to adoption
were  reported  separately  in  stockholders'  equity,  to be  included in other
comprehensive  income.  Total comprehensive  income (loss) for the quarter ended
September 30, 1999 amounted to $1.2 million compared to $6.2 million in the same
period in 1998.  Total  comprehensive  income  (loss) for the nine months  ended
September 30, 1999 amounted to ($9.8)  million  compared to $13.6 million in the
same period in 1998.

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
regarding resource  allocation and performance  assessment.  Up to and including
the first quarter of 1999, the Company has viewed its operations and managed its
business as  principally  one segment,  healthcare  information  solutions  that
include software,  hardware and related  services.  During the second quarter of
1999,  the Company  acquired  two  companies  which have  separate  and distinct
financial and operating  characteristics.  When applicable,  the information for
the reportable segments has been restated for the prior year in order to conform
to the 1999 presentation.

The  Company's  three  business  units  have  separate   management   teams  and
infrastructures  that offer different  products and services,  and as such, have
been classified as three reportable segments  (information systems and services,
internet initiatives, and medical transcription services).

Information  Systems  and  Services:  This  reportable  segment  consists of 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.

Channelhealth,  Inc. - Internet Initiatives: This reportable segment consists of
an 80% interest in Channelhealth, an internet web-portal for physicians combined
with a  marketing  site  for  pharmaceutical  products,  including  the  website
DietSite.com which provides  nutritional  analysis and information,  and various
other web enabled products.

                                   Page 7 of 24

<PAGE>


Channelhealth  will  offer  three  Internet  channels  that  integrate  the core
practice   management  systems  with  extensive   Internet-based   services  and
clinically  valid  content.  Channelhealth  services are available to physicians
through group practices,  hospitals,  integrated  delivery  networks and managed
care organizations.

The Physician Channel(TM)
The Physician  Channel  includes a  workflow-driven  portal called the Physician
Homebase with rich medical content and continuing  medical  education  material,
and  web-based   electronic  medical  record  modules.   The  Homebase(TM)  will
incorporate the physician's schedule and other practice-specific data that helps
improve office management and patient care processes. The Physician Channel will
provide online medication orders,  results review and interactive  transcription
management,  which will  ultimately  create  secure,  Internet-based  electronic
medical records.

The Patient Channel(TM)
The  Patient  Channel  is being  designed  to  create a  meaningful,  personally
relevant online connection  between the patient and his/her personal  physician.
Using  the  Patient  Channel,  a  patient  will  be able to  access  a  "Virtual
Office(TM)" --to schedule and confirm  appointments,  renew medications,  refill
prescriptions  and review test  results  after they have been  acknowledged  and
released by the physician. The Patient Channel will also provide the ability for
individuals to review their personal medical records starting with data that may
be automatically transferred from the physician's record.

The E-commerce Channel(TM)
The  E-commerce  Channel will feature an integrated  single-source  solution for
processing claims, referrals, eligibility and clinical transactions by providing
connectivity to payers, pharmacies,  laboratories and pharmacy benefit managers.
For  example,  when  performing  online  eligibility  verification,  the patient
registration  and health plan  information is extracted  automatically  from the
practice management system,  eliminating  redundant data entry and improving the
efficiency of payer  communication.  In addition,  the  E-commerce  Channel will
allow physicians and provider organizations group purchasing for medical/ office
equipment and supplies.

Medical  Transcription  Services:  This reportable  segment  represents  EDiX, a
provider of medical transcription  outsourcing  services.  The principal markets
for this segment include hospitals and large physician group practices primarily
located in the United States.

The  accounting  policies  of the  reportable  segments  are the  same as  those
described in Note 1 of the Notes to Consolidated  Financial  Statements filed in
the 1998 Form 10-K.  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,  with the  exception  of EDiX.  During  the  quarter  ended
September 30, 1999 and September  30, 1998,  EDiX's sales to one major  customer
amounted to 12.9% and 0.0% of total revenue respectively. During the nine months
ended  September  30, 1999 and  September  30,  1998,  EDiX's  sales to the same
customers amounted to 10.3% and 0.0% of total revenue respectively.

                                   Page 8 of 24

<PAGE>
Summarized financial information concerning the Company's reportable segments is
shown in the following table (in millions):
<TABLE>
<CAPTION>
                            IDX Healthcare
                            Information     Channelhealth-
                            Systems and     Internet
                            Services        Initiatives     EDiX       Total
                            --------------  --------------  --------   -------
<S>                         <C>             <C>             <C>        <C>
FOR THE THREE MONTHS
ENDED SEPTEMBER 30, 1999

Net operating revenues      $ 78,894        $ 1,127         $ 12,197   $ 92,218
Operating income (loss)        6,198         (4,882)             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     $ 216,589        $ 3,688         $ 32,846  $ 253,123
Operating loss                (2,612)        (7,621)          (4,965)   (15,198)
Identifiable operating
  assets                     254,774          8,042           12,798    275,614

FOR THE THREE MONTHS
ENDED SEPTEMBER 30, 1998

Net operating revenues      $ 83,358              -          $ 7,579   $ 90,937
Operating income (loss)       12,496              -           (1,893)    10,603
Identifiable operating
  assets                     266,357              -            8,420    274,777

FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1998

Net operating revenues     $ 235,459              -         $ 20,449  $ 255,908
Operating income (loss)       32,963              -           (6,652)    26,311
Identifiable operating
  assets                     266,357              -            8,420    274,777
</TABLE>

Substantially  all of the Company's  operations are in the United  States.  As a
result,  the  financial  information  disclosed  herein  represents  all  of the
material  financial  information  related to the Company's  principal  operating
segments.

Note 6 - 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
                                    September 30,           September 30,

                                1999        1998         1999         1998
                               -------------------      --------------------
<S>                             <C>         <C>          <C>          <C>
Numerator:
  Net income (loss)             $ 1,178     $ 6,199      $(9,650)     $13,563
                                -------------------      --------------------
Numerator for basic and diluted
  earnings (loss) per share     $ 1,178     $ 6,199      $(9,650)     $13,563

Denominator:
  Denominator for basic earnings
     (loss) per share
  Weighted-average shares        27,767      27,427       27,701       27,292
  Effect of employee stock
      options                       504         852                       864
                                -------------------      --------------------
Denominator for diluted earnings
  (loss) per share               28,271      28,279       27,701       28,156
                                -------------------      --------------------
Basic earnings (loss) per
  share                         $  0.04     $  0.23      $ (0.35)      $ 0.50
                                ===================      ====================
Diluted earnings (loss) per
  share                         $  0.04     $  0.22      $ (0.35)      $ 0.48
                                ===================      ====================
</TABLE>
                                   Page 9 of 24

<PAGE>


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

GENERAL

This Management's  Discussion and Analysis of Financial Condition and Results of
Operations  includes a number of  forward-looking  statements  which reflect the
Company's current views with respect to future events and financial performance.
These forward-looking  statements are subject to certain risks and uncertainties
including  those  discussed  below that  could  cause  actual  results to differ
materially  from  historical  results  or  those  anticipated.   Words  such  as
"believes,"  "may," "plans,"  "anticipates,"  "expects,"  "intends," and similar
expressions are intended to identify forward-looking statements, but are not the
exclusive means of identifying such statements.  In addition, the disclosures in
the  section on page 16 under the caption  "Factors  Affecting  Future  Results"
consists  principally  of a discussion of risks which may affect future  results
and are thus, in their entirety, forward-looking in nature. Readers are urged to
carefully  review and  consider the various  disclosures  made by the Company in
this report and in the Company's  other reports  filed with the  Securities  and
Exchange  Commission that attempt to advise interested  parties of the risks and
factors that may affect the Company's business.

The Company reported net income of $1.2 million, or $0.04 per diluted share, for
the third quarter of 1999 as compared to net income of $6.2 million or $0.22 per
diluted share, for the third quarter of 1998. The Company reported a net loss of
($9.6) million,  or ($0.35) per diluted share, for the first nine months of 1999
as compared to net income of $13.6 million or $0.48 per diluted  share,  for the
first nine months of 1998.

Excluding  the  effect  of  nonrecurring  charges  for the  acquisition  of EDiX
Corporation  of $4.0 million and the write-off of an investment of $1.6 million,
the net loss for the nine months ended  September 30, 1999 was ($5.6) million or
($0.20) per diluted share. Excluding nonrecurring expenses in the prior year for
costs  associated  with the  acquisition  of Trego  Systems,  Inc.,  the Company
reported  net income of $15.1  million,  or $0.54 per share,  for the first nine
months of 1998.

RESULTS OF OPERATIONS


THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THREE MONTHS
ENDED SEPTEMBER 30, 1998

REVENUES
The Company's total revenues  increased to $92.2 million during the three months
ended September 30, 1999 from $90.9 million in the corresponding period in 1998,
an increase of $1.3 million or 1.4%.  Revenues from systems  sales  decreased to
$34.4 million  during the three months ended  September 30, 1999 (37.3% of total
revenues)   compared  to  $46.7  million  (51.3%  of  total   revenues)  in  the
corresponding  period in 1998,  a  decrease  of $12.3  million or  (26.4%).  The
decrease was  primarily  due to a reduction in hardware  sales of $9.7  million.
Revenues from maintenance and service fees increased to $57.9 million during the
three  months  ended  September  30, 1999 (62.7% of total  revenues)  from $44.3
million  (48.7% of total  revenues)  in the  corresponding  period  in 1998,  an
increase of $13.6 million or 30.7%.  The increase in revenues  from  maintenance
and service fees was due to additional  maintenance  revenues resulting from the
continued   growth  in  the  Company's   installed  client  base  and  increased
transcription service fee revenue from EDiX.

During 1999,  certain of the Company's large customers delayed making purchasing
decisions with respect to certain large 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,  governmental approvals,  product complexity,  competition and customer
preoccupation with internal Year 2000 issues. The Company is unable to determine
whether such factors constitute a trend and will continue into future periods.

                                   Page 10 of 24

<PAGE>


COST OF SALES
The cost of sales and  services  increased  to $56.4  million  during  the three
months ended September 30, 1999 from $50.4 million in the  corresponding  period
in 1998,  an  increase  of $6.1  million or 12.1%.  The gross  profit  margin on
systems  sales and  services  decreased  to 38.8%  during the three months ended
September 30, 1999 from 44.6% in the corresponding  period in 1998. The decrease
in gross  profit was  primarily  due to fixed  costs and  overhead  expenses  in
relation to decreased revenue from  installations of the Company's systems which
typically include a greater percentage of software than services.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling,  general and administrative  expenses increased to $21.6 million during
the  three  months  ended   September   30,  1999  from  $17.4  million  in  the
corresponding  period in 1998,  an  increase  of $4.2  million  or  24.3%.  As a
percentage  of total  revenues,  selling,  general and  administrative  expenses
increased to 23.4% during the three months ended  September  30, 1999 from 19.1%
in 1998.  The increase in total  selling,  general and  administrative  expenses
during  the three  months  ended  September  30,  1999 was  primarily  due to an
increase  in  the   Company's   sales,   marketing  and   administrative   staff
infrastructure  which management  believes is necessary to support the long-term
growth of the Company.

RESEARCH AND DEVELOPMENT
Research and  development  expenses  increased to $12.7 million during the three
months ended September 30, 1999 from $12.6 million in the  corresponding  period
in 1998,  an increase of  $100,000  or 1.2%.  The slight  increase is due to the
hiring of additional staff and outside consultants to support the development of
additional products including IDXsite and web technology  applications,  and for
the costs of efforts to  address  Year 2000  issues.  As a  percentage  of total
revenues,  research and  development  expenses  remained  comparable at 13.8% of
revenue for the third quarters of 1999 and 1998.

Interest and OTHER INCOME
Interest income decreased to approximately  $768,000 during the third quarter of
1999  compared  to $1.9  million  for the  comparable  period in 1998.  Interest
expense  decreased  approximately  $375,000  during the third quarter of 1999 as
compared to the same period in the prior year.

INCOME TAXES
Income taxes for the quarter  ended  September  30, 1999 were provided at 40.0 %
which  approximates the Company's  historical  statutory rate. The provision for
income taxes for the three months ended  September  30, 1998 was provided for at
approximately  47.7 %. The higher rate in the prior year is due to the effect of
the  restatement  of the  Company's  financial  statements,  for the  pooling of
interests  accounting for the  acquisition of EDiX which includes a net loss for
EDiX for  which no tax  benefit  was  recognized.  The  Company  anticipates  an
effective tax rate of  approximately  40.0% for the remainder of the year ending
December 31, 1999.


NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO NINE MONTHS
ENDED SEPTEMBER 30, 1998

REVENUES
The Company's total revenues  decreased to $253.1 million during the nine months
ended September 30, 1999 compared to $255.9 million in the corresponding  period
in 1998,  a decrease of $2.8  million or (1.1%).  Revenues  from  systems  sales
decreased  to $94.9  million  during the nine months  ended  September  30, 1999
(37.5% of total  revenues)  compared to $129.4 million (50.6% of total revenues)
in the corresponding period in 1998, a decrease of $34.4 million or (26.6%). The
decrease  was  primarily  due to a delay in  current  and  potential  customers'
purchasing  decisions combined with a decrease in hardware sales.  Revenues from
maintenance  and service fees increased to $158.2 million during the nine months
ended September 30, 1999 (62.5% of total revenues) from $126.5 million (49.4% of
total  revenues)  in the  corresponding  period in 1998,  an  increase  of $31.6
million or 25.0%. The increase in revenues from maintenance and service fees was
due to additional  maintenance  revenues  resulting from the continued growth in
the  Company's  installed  client base and increased  transcription  service fee
revenue from EDiX.

                                   Page 11 of 24

<PAGE>


During 1999,  certain of the Company's large customers delayed making purchasing
decisions with respect to certain large 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,  governmental approvals,  product complexity,  competition and customer
preoccupation with internal Year 2000 issues. The Company is unable to determine
whether such factors constitute a trend and will continue into future periods.

COST OF SALES
The cost of sales and  services  increased  to $161.5  million  during  the nine
months ended September 30, 1999 from $142.8 million in the corresponding  period
in 1998,  an  increase of $18.7  million or 13.1%.  The gross  profit  margin on
systems  sales and  services  decreased  to 36.2%  during the nine months  ended
September 30, 1999 from 44.2% in the corresponding period in 1998.

The  decrease in gross  profit was  primarily  due to fixed  costs and  overhead
expenses in relation to decreased  revenue from  installations  of the Company's
LastWord and IDXtend  systems which  typically  include a greater  percentage of
software than of services.


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling,  general and administrative  expenses increased to $62.8 million during
the nine months ended September 30, 1999 from $48.5 million in the corresponding
period in 1998, an increase of $14.3 million or 29.4%.  As a percentage of total
revenues, selling, general and administrative expenses increased to 24.8% during
the nine months  ended  September  30, 1999 from 19.0% in 1998.  The increase in
total selling,  general and administrative expenses during the nine months ended
September 30, 1999 was  principally  due to an increase in the Company's  sales,
marketing and administrative  staff  infrastructure which management believes is
necessary to support the long-term growth of the Company.

RESEARCH AND DEVELOPMENT
Research and  development  expenses  increased to $39.9 million  during the nine
months ended September 30, 1999 from $35.0 million in the  corresponding  period
in 1998, an increase of $4.9 million or 14.0%.  The increase is primarily due to
the  hiring  of  additional  staff  and  outside   consultants  to  support  the
development  of  additional   products  including  IDXsite  and  web  technology
applications,  and for the costs of efforts to address  Year 2000  issues.  As a
percentage of total  revenues,  research and development  expenses  increased to
15.8%  during the nine months ended  September  30, 1999 from 13.7% for the nine
months ended  September 30, 1998.  The increase as a percentage of sales for the
nine months ended  September  30, 1999 as compared to the prior year,  is due to
the additional personnel and consulting expenses.

NONRECURRING CHARGE - MERGER AND RELATED COSTS
During the nine months ended September 30, 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 $200,000,  principally  related to  integration  costs
incurred during the period and the  termination of leases and other  contractual
obligations.

NONRECURRING CHARGE - WRITE-OFF OF ACQUIRED IN-PROCESS RESEARCH AND DEVELOPMENT
On February 23, 1998, the Company recorded  nonrecurring charges of $3.2 million
related to the acquisition of contract management technology from Trego Systems,
Inc. for cash of $4.0  million.  The  acquisition  was  accounted  for under the
purchase  method.   The  charges  were  expensed  as  in-process   research  and
development  costs in connection with the Company's  development of a healthcare
contract management system.

INTEREST AND OTHER INCOME (EXPENSE)
Interest income  decreased to  approximately  $3.4 million during the first nine
months of 1999  compared to $4.9  million for the same period in 1998.  Interest
expense  increased to $900,000  during the first three quarters of 1999 compared
to  $800,000  for the same period in the prior  year.  The  increase in interest
expense is primarily due to interest expense incurred by EDiX Corporation.

                                   Page 12 of 24

<PAGE>


LOSS ON IMPAIRMENT OF ASSET
Other  expense  included the  write-off of an  investment of $1.6 million in the
quarter ended March 31, 1999.

INCOME TAXES
Income taxes for the nine months ended September 30, 1999 were benefited at
35.9%  which is lower  than the  Company's  historical  statutory  rate of 40.0%
primarily due to certain  charges  related to the  acquisition of EDiX which are
non-deductible  for income tax purposes.  Income taxes for the nine months ended
September 30, 1998 were provided for at approximately  54.1%. The higher rate in
the  prior  year  is due to the  effect  of  the  restatement  of the  Company's
financial statements for the pooling of interests accounting for the acquisition
of EDiX,  which  includes  the net loss for EDiX for  which no tax  benefit  was
recognized.  In addition, a portion of the charges incurred in the first quarter
ended March 31, 1998 related to the  acquisition  of Trego  Systems,  Inc.  were
non-deductible for income tax purposes. The Company anticipates an effective tax
rate of  approximately  40% for the  remainder  of the year ending  December 31,
1999.

LIQUIDITY AND CAPITAL RESOURCES
Since its  inception  in 1969,  the Company has funded its  operations,  working
capital needs and capital expenditures  primarily from operations.  The proceeds
from its initial  public  offering in 1995 have been used for general  corporate
purposes.

Cash flows from  operations  are  principally  comprised  of net income  (loss),
depreciation and amortization,  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 installation  efforts which are dependent upon,  among other things,  the
size of the  transaction,  the  changing  business  plans of the  customer,  the
effectiveness  of customers'  management  and general  economic  conditions.  In
general, accounts receivable from customers have been collected within the range
of 111 to 128 days.

Cash flows related to investing  activities have principally been related to the
purchase  of  computer  and  office  equipment,   leasehold  improvements,   the
acquisition of complementary products,  businesses,  technology and the purchase
and sale of investment  grade marketable  securities.  The Company expects these
activities to continue.  During the nine months ended  September  30, 1999,  the
Company acquired two buildings in South  Burlington,  Vermont for  approximately
$7.5  million  with  approximately  66,000  square  feet  that  will be used for
additional office space.

On April 23, 1999 the Company acquired EDiX. The terms of the agreement provided
for  the  shareholders  and  optionholders  of  EDiX  to  receive  approximately
1,000,000  shares of IDX common  stock.  Based on the  closing  price of the IDX
common stock on April 23, 1999, the transaction is valued at approximately $16.7
million,  plus the assumption of EDiX debt of  approximately  $14.0 million that
was paid off during the nine months ended September 30, 1999. Additionally,  the
Company  acquired an 80%  interest in  Channelhealth,  Inc. on April 1, 1999 for
$6.5  million.  On June 23,  1999,  the  Company  acquired  all of the assets of
DietSite.com, Inc. for $1.5 million.  Channelhealth,  Inc. and DietSite.com will
be managed and operated with the Company's other web technology initiatives in a
separate,  majority-owned  subsidiary.  It is anticipated that this company will
lose  approximately  $13.0 million pretax during 1999. There can be no assurance
that the  Company  will be able to  successfully  complete  other  purchases  or
acquisitions in the future.

Cash flows from financing  activities  historically relate to the sale of common
stock through the exercise of employee stock options and in connection  with the
employee stock purchase plan. During 1998 other financing  activities related to
the  recapitalization  of the real  estate  affiliate,  which is included in the
consolidated financial statements, from debt to equity.

Cash,  cash  equivalents  and  marketable  securities at September 30, 1999 were
$73.9 million,  a decrease from the December 31, 1998 balance of $125.1 million.
This  decrease is primarily due to the  investing  activities  referred to above
combined with a use of cash for  operations  due to the  operating  loss of $9.6
million  for the nine  months  ended  September  30,  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.  There were no  borrowings  as of
September 30, 1999 or 1998.

                                   Page 13 of 24

<PAGE>


The Company  expects that its  requirements  for office  facilities will grow as
staffing requirements dictate. The Company's operating lease commitments consist
primarily of office leasing for the Company's operating facilities.  The Company
plans to continue  increasing  the number of its  professional  staff during the
remainder of 1999 and throughout  2000 to meet  anticipated  sales volume and to
support  research and development  efforts.  To the extent  necessary to support
increases in staffing, the Company intends to obtain additional office space.

The Company is currently evaluating a plan to acquire the Company's headquarters
in South Burlington, Vermont from BDP Realty, a related entity which is included
in  the  Company's  consolidated  financial  statements.  As a  result  of  this
potential acquisition, the Company may choose to obtain financing in the form of
a mortgage backed financing  instrument.  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.  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. Currently, the Company has made no material lease or purchase commitments
other than the two building purchases mentioned above.

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

INTRODUCTION
Software  applications  that use only two digits to  identify a year in the date
field may fail or  create  errors in the year 2000  ("Year  2000  Issues").  The
Company has taken significant steps to address Year 2000 Issues.

The  Company's  internally  used computer  equipment,  software and devices with
embedded  technology--including  both  information  systems and  non-information
systems (together,  "Internal Use Systems")--may  fail to operate properly or as
expected  due to Year 2000  Issues.  This  could  result in a system  failure or
miscalculations causing disruption of the Company's operations,  including among
other things,  a temporary  inability to process  transactions,  send  invoices,
conduct  communications,  or engage in similar normal  business  activities.  In
addition,  computer  software  products  sold,  marketed,  and  supported by the
Company ("Company Software Products") and the products of third parties that are
distributed  by the  Company  or others or may be  necessary  for  operation  of
Company Software Products ("Third Party Products"), may fail to operate properly
or as expected due to Year 2000  Issues.  Such  failures  could result in system
failures  or  miscalculations   causing  disruption  of  customers'  operations,
including  among other things,  a temporary  inability to process  transactions,
send invoices,  conduct  communications,  treat  patients,  or engage in similar
normal business activities. Further, products and services used by the Company's
customers, but not supplied by the Company, could fail to operate properly or as
expected  due to Year 2000  Issues.  Customers'  efforts to plan for such events
could  result in the  deferral,  delay or  cancellation  by customers of current
installations of and plans to purchase Company Software Products.

STATE OF READINESS
The Company has  undertaken  various  initiatives  intended to address Year 2000
Issues with respect to Internal  Use Systems,  Company  Software  Products,  and
Third Party Products.  The Company has established  working groups whose primary
functions are to: (i) develop and  implement  the  Company's  definition of Year
2000  readiness;  (ii) assess  Internal  Use Systems,  Third Party  Products and
Company  Software  Products for Year 2000  Issues;  (iii)  monitor  development,
testing and remediation efforts with respect to Company Software Products;  (iv)
monitor  testing of Company  Software  Products  and Third Party  Products,  (v)
review customer preparations to implement Year 2000 releases of Company Software
Products; (vi) monitor and coordinate the Company's deployment plans and results
with respect to Year 2000 releases of Company Software  Products;  (vii) monitor
and coordinate  contingency plans with respect to Internal Use Systems,  Company
Software Products and Third Party Products;  and (viii) provide  centralization,
accuracy and  consistency  of the Company's  communications  regarding Year 2000
Issues.

                                   Page 14 of 24

<PAGE>


The  Company  has  engaged  independent  experts to assist in its  efforts  with
respect  to  Year  2000  Issues.  The  Company  has  employed  such  experts  to
independently  evaluate and verify its methodologies and state of readiness.  In
addition,  the Company has employed  experts to  independently  evaluate certain
critical  Internal Use Systems.  Although the Company's  efforts to address Year
2000  issues do not fall  precisely  into  sequential  phases,  generally  these
efforts are comprised of an  assessment  phase,  a development  phase (only with
respect to Company  Software  Products),  a deployment or  remediation  phase, a
preliminary  contingency  planning phase, and a final stage contingency planning
phase.

INTERNAL  USE  SYSTEMS.  Certain  Internal Use Systems  require  replacement  or
modification, and to date the Company has replaced or modified most Internal Use
Systems. In addition, in the ordinary course of replacing and upgrading Internal
Use Systems,  the Company attempts to obtain  replacements that it believes will
not  fail as a result  of Year  2000  Issues.  The  Company  has  completed  its
assessment  efforts  with  respect to Internal  Use Systems and expects that its
remediation efforts will be completed by the fourth quarter of 1999. The Company
is  currently  engaged in ongoing  contingency  planning  to address  personnel,
resource and technical Year 2000 Issues  relating to foreseeable  scenarios that
may develop despite its remediation  efforts.  The Company  estimates that as of
September  30,  1999  it had  completed  approximately  97% of  its  efforts  in
connection  with Year 2000 Issues  relating to its  Internal  Use  Systems.  The
projects  comprising  the  remaining  3% of such  efforts are in process and are
expected to be  substantially  completed on or about the fourth quarter of 1999.
The majority of the remaining work is associated  with  finalizing the Company's
contingency plan,  analyzing  landlord's responses for facilities leased by IDX,
completing  evaluation  of the  possible  need for  upgrades on non-IDX  desktop
applications and plan validation.

The  Company  has mailed  letters  or  otherwise  communicated  with many of its
significant  vendors of Internal  Use Systems and related  service  providers to
determine the extent to which Year 2000 Issues  affect  products and services of
such vendors and  providers.  As of Sepember 30, 1999,  the Company had received
responses  from  approximately  97% of such  third  parties,  and  97% of  these
companies  have provided  written  assurances  that they expect to  successfully
address their  significant  Year 2000 Issues on a timely  basis.  The Company is
engaged in but has not completed  efforts to communicate  with other vendors and
service providers involved in its Internal Use Systems to request more responses
to its communications and to verify the responses received. Due to uncertainties
associated with vendors and service providers,  the Company is unable to predict
whether  Year 2000 Issues  involved  in its  Internal  Use  Systems  will have a
material  adverse effect on the Company's  business,  results of operations,  or
financial condition, despite the Company's current assessment to the contrary.

THIRD PARTY  PRODUCTS.  The Company  works  closely with vendors of  significant
Third Party Products and has  communicated  with them to determine the extent to
which  their  products  and  services  are or will be Year  2000  compliant.  In
addition,  the Company is testing or plans to test Year 2000 releases of certain
Third Party Products. Based upon its current assessment, the Company believes it
has received  adequate  assurances that significant  Third Party Product vendors
expect to successfully  address their  significant  Year 2000 Issues on a timely
basis.  Due to uncertainties  associated with Third Party Product  vendors,  the
Company is unable to  predict  whether a material  adverse  effect on  business,
results of operations,  or financial  condition may result from Year 2000 Issues
related to Third Party Products, despite the Company's current assessment to the
contrary.

COMPANY SOFTWARE  PRODUCTS.  The Company began development of Year 2000 versions
of some Company  Software  Products in 1997 and  continues  to progress  through
development  and  maintenance  cycles  with  respect  to some  Company  Software
Products.  The Company began  deploying  Year 2000 releases of Company  Software
Products in 1998 and expects to complete  deployment of such releases during the
fourth quarter of 1999. The Company continues to test and monitor performance of
Year 2000 releases of Company Software  Products in customer  environments.  The
Company expects to deliver and deploy  maintenance  releases of Company Software
Products in the ordinary  course of business to  remediate  any Year 2000 Issues
identified during and after deployment of Year 2000 releases of Company Software
Products.  Based on the Company's  assessment,  the Company believes  continuing
efforts will be required to assist  customers in deploying and testing Year 2000
releases of Company Software Products in their unique environments.  The Company
expects  an  increase  in service  and  support  effort  levels as the year 2000
approaches and into the early months of the year 2000.

                                   Page 15 of 24

<PAGE>


The Company  develops,  markets and supports many  different  products,  and the
amount of effort applied with respect to individual products varies from product
to product. The Company estimates that as of September 30, 1999 it had completed
more than 99% of the development  efforts  relating to Year 2000 versions of all
of the Company  Software  Products,  including  100% of such efforts  related to
EDiX. The projects comprising the remaining less than 1% of these efforts are in
process and  expected to be  substantially  completed  in the fourth  quarter of
1999.  The Company  estimates  that as of September  30, 1999,  it had completed
approximately  94% of the deployment  efforts  relating to Year 2000 versions of
all Company Software  Products,  including 81% of deployment  efforts related to
EDiX's products.  The projects  comprising the remaining 6% of these efforts are
in process and are expected to be substantially  completed in the fourth quarter
of 1999, but the Company  expects to continue  efforts to remediate and maintain
Year 2000 versions of Company Software Products in customer  environments and to
support  customers'  efforts relating to Year 2000 Issues through the early part
of 2000.

The Company is currently engaged in ongoing contingency planning to address
company-wide personnel, resource, technical and communication issues relating to
its service and remediation  efforts.  The Company expects that its development,
remediation,  testing,  deployment and contingency planning efforts with respect
to Company  Software  Products will continue up to and beyond December 31, 1999,
but expects the level of development  and deployment will decrease in the fourth
quarter of 1999.

CONTINGENCY  PLANS AND RISKS. The Company will continue its ongoing efforts
to  comprehensively  analyze  company-wide  operational,  business and financial
problems (including possible loss of revenue),  if any, that would be reasonably
likely to result  from the  impact of  unresolved  Year 2000  Issues,  including
possible:  (i) failure by the  Company  and  vendors of Third Party  Products to
complete  efforts  to avoid or  minimize  Year 2000  Issues  on a timely  basis,
including  failure of Internal Use Systems,  Company Software Products and Third
Party  Products to be Year 2000 ready;  (ii) failure of Customers to be ready to
or cooperate in the deployment of Year 2000 ready  versions of Company  Software
Products and Third Party  Products on a timely basis;  (iii) delay,  deferral or
cancellation  by customers of current  installations  and  prospective  purchase
decisions  with  respect  to  Company  Software  Products;  and (iv)  failure of
communicating infrastructures,  including communications and transportation. The
Company's  contingency  plans relating to Year 2000 scenarios  encompass  "worst
case"  scenarios  that  assume  the  failure  of some  but  not all  significant
communications and computing  infrastructures of the Company,  its customers and
suppliers,  together with failures of governmental and utility  infrastructures,
including those related to transportation and energy.

COSTS
The Company estimates that the cost of its efforts to successfully  address Year
2000 Issues will be approximately  $17.7 million,  of which  approximately  $5.4
million relates to Internal Use Systems, $0.6 million relates to EDiX, and $12.3
million  relates to Company  Software  Products.  Because the Company  develops,
markets, and supports many different products, the amount of effort applied with
respect to individual products varies from product to product.  All expenditures
to fund Year 2000 Issue  efforts have been and will continue to be recognized as
operating  expenses for fiscal years 1997  through  early 2000,  except for $0.7
million,  which is  expected  to be  incurred  and  capitalized  in 1999.  As of
September 30, 1999, the Company had incurred approximately $15.3 million related
to its  Year  2000  Issue  assessment,  remediation,  testing,  and  contingency
planning  efforts  identification,  which  is  approximately  86% of  the  total
projected costs of such efforts. Of the amount of costs incurred as of September
30, 1999,  approximately $4.3 million relates to Internal Use Systems,  which is
approximately  81% of the total of estimated  costs for such efforts,  and $10.0
million relates to Company Software Products,  which is approximately 89% of the
total of estimated costs for such efforts.

Unless  all  material  Year 2000  Issues are  timely  and  properly  identified,
assessed,  and remediated,  and unless adequate  contingency  plans are properly
formulated and executed,  Year 2000 Issues may materially  adversely  impact the
Company's business,  financial condition and results of operations, or adversely
affect the Company's  relationships  with  customers,  suppliers or others.  The
Company  believes  that Year 2000  Issues  could  cause  failures  in  important
elements of the computing and communications infrastructures of the Company, its
customers  and  suppliers  and also  Company  Software  Products and Third Party
Products.  Further,  the Company expects that it and its customers and suppliers
may experience failures of such systems the causes of which will be difficult to
determine,  requiring the application of resources for diagnostic  purposes.  If
the Company has not developed  adequate  contingency  plans and means to address
such  contingencies,  Year 2000 Issues  could  materially  adversely  impact the
Company's business,  financial condition and results of operations, or adversely
affect the Company's relationships with customers, suppliers or others.

                                   Page 16 of 24

<PAGE>

The costs,  timing and  scheduling of deployment and  installation  of Year 2000
versions of Company Software  Products and Third Party Products,  as well as the
ability  of the  Company  to assist  customers  in the  installation  of Company
Software Products, will depend in part on the readiness, ability and cooperation
of  customers  and  their  suppliers.   Due  to  uncertainties  associated  with
customers'  readiness,  cooperation and sources of products and services,  there
can be no assurance that Year 2000 Issues will not materially  adversely  affect
the  Company's  business,  results of  operations,  or financial  condition,  or
adversely affect the Company's relationships with customers, vendors or others.

Some  customers  and  prospects  of the  Company  operate in  complex  computing
environments that include products and services not supplied by the Company. The
costs,  timing and  scheduling  by customers of work related to Year 2000 Issues
involving  such products and services may cause some  customers and prospects to
defer current  projects or  prospective  purchase  decisions  regarding  Company
Software  Products.  If Year 2000 Issues cause  customers and prospects to defer
current projects or prospective  purchase  decisions,  the Company's  financial,
business  and  operational  goals may be deferred or may not be realized at all,
with the result that the Company's business, results of operations, or financial
condition  could  be  materially   adversely  affected.   Due  to  uncertainties
associated  with  customers and  prospects,  there can be no assurance that Year
2000 Issues will not materially adversely affect the Company's business, results
of  operations,  or  financial  condition  or  adversely  affect  the  Company's
relationships with customers, vendors or others.

The costs of the Company's Year 2000  identification,  assessment,  remediation,
testing, deployment and contingency planning efforts, and the dates on which the
Company  believes it will  complete such  efforts,  are based upon  management's
current best estimates,  which were derived using numerous assumptions regarding
future  events,  including  the  continued  availability  of certain  resources,
third-party remediation plans, and other factors. There can be no assurance that
these  estimates  will prove to be  accurate,  and actual  results  could differ
materially from those currently  anticipated.  Specific factors that could cause
such material  differences  include, but are not limited to, the availability of
and cost of personnel trained in Year 2000 Issues,  the ability to correctly and
effectively identify,  assess,  remediate, and test all relevant computer codes,
equipment,  and embedded technology,  and similar uncertainties,  the ability of
the Company to timely install and deploy Year 2000 releases of Company  Software
Products, a failure of the Company to provide, obtain or make available adequate
resources  to assist  customers  in  installing  Year 2000  releases  of Company
Software  Products and Third Party Products.  As a result of any of such factors
alone or in combination,  the Company may experience an increase in warranty and
other claims. In addition,  since there is no uniform  definition of "compliance
with Year 2000," and since the Company sells a myriad of different  combinations
of products and services  under varying  contractual  terms,  the Company is not
able to assess or estimate  the  possible  impact of such  possible  claims.  No
assurance can be given that the aggregate  cost of defending and resolving  such
claims,  if any, will not materially  adversely affect the Company's  results of
operations.  Although some of the Company's  agreements with  manufacturers  and
others from whom it purchases products for resale contain  provisions  requiring
such parties to indemnify the Company under some circumstances,  there can be no
assurance that such indemnification arrangements will cover all of the Company's
liabilities  and costs related to claims by third  parties  related to Year 2000
Issues.

FACTORS AFFECTING FUTURE RESULTS

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:

        .  delay in customers purchasing decisions due to a variety of factors
           such as consolidation, management changes and year 2000 problems;

        .  market prices of competitors such as McKesson HBOC, Inc.;

        .  announcements of technological innovations, including Internet
           delivery of information and use of relational database technology;

        .  new product introductions by IDX or its competitors;

        .  market conditions particularly in the computer software and hardware
           industries; and

        .  healthcare reform measures, such as those contemplated by the
           Balanced Budget Act of 1997.

                                   Page 17 of 24

<PAGE>


These  fluctuations  could have a significant  impact on future market prices of
IDX's common stock.  On March 5, 1999 IDX  announced  that it expected a loss of
($0.22) - ($0.28) per share in the quarter ending March 31, 1999. Following this
announcement, the IDX share price declined. On April 30, 1999, the last reported
sale price of IDX  common  stock on the  Nasdaq  National  Market was $16.25 per
share and on June 30, 1999,  such price was $22.5625.  On December 31, 1998, the
last reported sale price of IDX common stock on the Nasdaq  National  Market was
$44.00.  These prices represent  declines of 63% and 49%,  respectively,  in the
value of IDX stock since December 31, 1998.

Variation  in  Financial  Trends  in Net  Income  and Cash from  Operations  May
Continue.  Year over year net income and cash from  operations  have  fluctuated
since 1995. IDX's net income was $20.6 million in 1995. Net income fell to $16.7
million in 1996 and $8.0 million in 1997. Net income  increased to $30.2 million
in 1998. Cash from operations was $21.7 million in 1995,  $10.4 million in 1996,
$9.8 million in 1997,  and $23.4 million in 1998. On March 5, 1999 IDX announced
that based on currently available information,  the after tax loss for the first
quarter  ending March 31, 1999 was expected to be ($5.0) to ($7.0)  million.  If
these  negative  trends were to continue,  IDX may have  difficulty in financing
future  growth  and  funding  its   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  to  continue to  fluctuate.
Because a significant  percentage of IDX's  expenses are relatively  fixed,  the
following factors could cause these fluctuations:

        .    delay in customers purchasing decisions due to a variety of factors
             such as consolidation, management changes and year 2000 problems;

        .    the volume and timing of systems sales and installations;

        .    recognizing revenue at various points during the installation
             process;

        .    the sales and implementation cycles of IDX's customers; and

        .    general reductions in spending by IDX's customers and healthcare
             reform measures.

In  addition,  the timing of new product and service  introductions  and product
upgrade  releases and general  economic  conditions  can impact IDX's  quarterly
operating results.

In light of the above,  IDX  believes  that its  results of  operations  for any
particular  quarter or fiscal year are not  necessarily  meaningful  or reliable
indicators of future performance.  Future period-to-period fluctuations may have
a material adverse effect on IDX's results of operations, financial condition or
business.

IDX May Experience  Challenges and Incur  Substantial  Costs in Integrating  the
Operations of EDiX.

EDiX  may  present  IDX  operational  challenges,   and  IDX  expects  to  incur
significant  pre-tax  charges in  association  with the merger.  If IDX fails to
successfully  integrate the  operations or management of the two  companies,  it
could  have a  material  adverse  effect on the  combined  entity's  results  of
operations, financial condition or business.

IDX May Not be Successful in Implementing its Acquisition Strategy.  IDX intends
to  continue  to grow in  part  through  either  acquisitions  of  complementary
products,   technologies   and  businesses  or  alliances   with   complementary
businesses.  IDX may not be successful in these acquisitions or alliances, or in
integrating  any such acquired or aligned  products,  technologies or businesses
into its current business and operations. Factors which may affect IDX's ability
to expand successfully include:

        .    the successful identification and acquisition of products,
             technologies or businesses;

                                   Page 18 of 24

<PAGE>


        .    effective integration and operation of the acquired or aligned
             products, technologies or businesses despite technical
             difficulties, geographic limitations and personnel issues; and

        .    overcoming significant competition for acquisition and alliance
             opportunities from companies that have significantly
             greater financial and management resources, such as McKesson HBOC,
             Inc. and Shared Medical Systems Corporation.

The failure to successfully integrate any significant products,  technologies or
businesses  could have a material adverse effect on IDX's results of operations,
financial condition or business.

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 sell additional products to its existing
client base and  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 factors including:

        .    evolving industry standards, for example, Health Level Seven;

        .    new technological developments, for example, the web technology.

IDX is  currently  devoting  significant  resources  toward the  development  of
enhancements  to its existing  products,  particularly  in the announced area of
web-based  functionality  and the migration of existing products to new hardware
and  software   platforms   including   relational   database   technology   and
object-oriented  programming.  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 May Be Adversely  Affected by Year 2000 Problems.  In the year 2000 software
applications  that use only two digits to  identify a year in the date field may
fail or create errors.  IDX uses computer  equipment,  software and devices with
embedded  technology,  including both  information  systems and  non-information
systems, that may not be year 2000 compliant despite IDX's continuing efforts to
assess,  remediate,  and test such equipment,  software and devices.  This could
result  in a system  failure  or  miscalculations  causing  disruption  of IDX's
operations, including among other things, a temporary inability to:

        .    process transactions;

        .    send invoices;

        .    conduct communications; or

        .    engage in similar normal business activities.

In addition,  IDX sells computer  software products and distributes the products
of third parties that may not be year 2000  compliant  despite IDX's  continuing
efforts to assess and test these products.  This could result in system failures
or miscalculations  causing disruption of customers' operations,  including,  in
addition to the types of disruptions  described above, a temporary disruption in
their ability to treat  patients.  Further,  products and services used by IDX's
customers,  but not supplied by IDX, may not be year 2000  compliant.  Customers
may defer current installations of and plans to purchase IDX products until they
have completed their own year 2000 assessment.  Any of these problems could have
a material adverse effect on IDX's results of operations, financial condition or
business.

IDX does not believe that the year 2000 issues will pose significant operational
problems  for IDX.  However,  if year 2000 issues are not  properly  identified,
assessed and resolved, it could have a material adverse effect on the results of
operations,  financial  condition or business of IDX. In addition if actual year
2000 remediation  costs are higher than IDX estimated costs, it could materially
adversely affect IDX's results of operations, financial condition or business.

                                   Page 19 of 24

<PAGE>


The nature of IDX's  business and its  relationships  with its customers make it
difficult  to assess the  magnitude of IDX's  potential  exposure as a result of
year 2000 issues.  IDX is engaged in the business of  developing,  marketing and
supporting  computer software.  IDX's software is often used by its customers in
conjunction  with other  vendors'  products and services.  The ability of IDX to
assist its customers in the development and  installation of year 2000 compliant
versions of IDX software products will depend in part on the readiness,  ability
and  cooperation  of  its  customers  and  their  suppliers.  In  addition,  the
purchasing  patterns of IDX customers and potential customers may be affected by
year 2000 issues.  The cost,  timing and scheduling by customers of work related
to year 2000  issues  involving  IDX's  products  and  services  may cause  some
customers to defer or forego projects or purchase decisions.  IDX sells a number
of different  combinations  of products and services  under varying  contractual
terms. There is no widely accepted  definition of year 2000 compliance.  Certain
of IDX's  customers  may assert  breach of warranty or other claims  against IDX
relating to year 2000 compliance.  Any of these factors may adversely affect the
results of operations.

Product Sales Within the Healthcare  Industry May Decline  Causing 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,  any  factor
adversely  affecting this industry and these sales could have a material adverse
effect on IDX. In  addition,  even though  IDX's  annual  sales have  increased,
future  revenues  associated  with existing  products may decline as a result of
factors like price  competition.  IDX may not be able to continue its success in
marketing its current, new or enhanced products.  Moreover, IDX may be unable to
maintain its current pricing for existing products.

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.  A
successful  claim brought against IDX in excess of its insurance  coverage could
have a material adverse effect on IDX's results of operations. Even 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,  and  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.  The
loss of key personnel,  or the inability to hire or retain qualified  personnel,
could have a material  adverse effect on IDX's results of  operations.  IDX does
not maintain "key man" life insurance policies on its executives.
Not all IDX personnel have executed noncompetition agreements.

IDX May Be  Adversely  Affected  By Changes in the  Healthcare  Industry  and by
Government Healthcare Reform Proposals.  IDX's products are designed to function
within the  structure  of the  healthcare  financing  and  reimbursement  system
currently  being used in the United States.  During the past several years,  the
healthcare  industry  has been  subject  to  increasing  levels of  governmental
regulation of, among other things, reimbursement rates and capital expenditures.
From time to time,  Congress has considered and adopted  proposals to reform the
healthcare  system.  These  proposals  may increase  government  involvement  in
healthcare,  lower  reimbursement  rates  and  otherwise  change  the  operating
environment  for IDX's clients.  Legislation  such as the Balanced Budget Act of
1997 will  lower  reimbursement  rates and may  result in  reduced  spending  by
certain healthcare  organizations.  Healthcare  organizations may react to these
proposals  and the  uncertainty  surrounding  these  proposals by  curtailing or
deferring  investments,  including  those for IDX's  products and services.  IDX
cannot  predict with any  certainty  what impact these  proposals or  healthcare
reforms,  such as the  Balanced  Budget Act of 1997 might have on its results of
operations, financial condition or business.

Governmental  Regulation  May Impose New Burdens and Costs on IDX's  Operations.
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:

                                   Page 20 of 24

<PAGE>


        .    register and list its products with the FDA;

        .    notify the FDA and demonstrate substantial equivalence to other
             products on the market before marketing such products; or

        .    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 FDC 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.

In order to ensure continued  compliance with changing government  standards and
regulations,  IDX monitors  regulations  affecting its business  including those
mandated by the Health Insurance Portability and Accountability Act of 1996.

IDX May Have  Conflicts  of  Interests  With  Some of its  Executives  Which May
Adversely Affect IDX. Richard E. Tarrant,  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 1998, IDX paid an aggregate of approximately $4.2 million in
connection with these leases. In November 1998, IDX announced tentative plans to
expand one of its  facilities  located on land  owned by these  executives.  The
Company  is in the  final  stages  of  such  plans  but has  not  yet  made  any
commitments to execute such plans.

In  connection  with  these  arrangements,   the  economic  interests  of  these
executives and directors and IDX may diverge.  In response,  IDX has created the
Committee  on   Independent   Director   Transactions   to  review  and  approve
transactions of this nature.  IDX believes that these  arrangements were entered
into on an arm's length  basis on terms that were no less  favorable to IDX than
could have been obtained from unaffiliated third parties.

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



                                   Page 21 of 24

<PAGE>



PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

         On June 11,  1999,  a lawsuit was served on the  Company.  Eleven other
         companies  engaged in various  aspects  of the  healthcare  information
         systems  business have also been sued in the same lawsuit.  The lawsuit
         was  brought  in the  United  States  District  Court for the  Northern
         District of Texas Fort Worth  Division and is entitled  Allcare  Health
         Management  System,  Inc. v.  Cerner  Corporation,  et al.,  and claims
         damages  for patent  infringement.  The  Company is  investigating  the
         claims made in the lawsuit and has  responded  accordingly.  Based upon
         investigation  to date,  the  Company  believes  the lawsuit is without
         merit and intends to vigorously defend against it.

         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

                  None.

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

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

                                   Page 22 of 24

<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


Date: November 12, 1999                  By: /s/ John A. Kane
                                             ----------------------------------
                                             John A. Kane,
                                             Vice President, Finance and
                                             Administration, Chief Financial
                                             Officer and Treasurer
                                             (Principal Financial and
                                             Accounting Officer)

                                   Page 23 of 24

<PAGE>


                                  EXHIBIT INDEX

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




Exhibit No.      Description                                               Page
-----------      -----------                                               ----

99A              Sample Indemnification Agreement signed                   25
                 by all Directors and Officers as of
                 September 13, 1999

99B              Amendment to Amended and Restated Consulting/             34
                 Employment Agreement dated as of
                 February 16, 1999

99C              Third Amendment to Amended and Restated Consulting/       39
                 Employment Agreement dated as of August 1, 1999

27               Financial Data Schedule                                   41

                                   Page 24 of 24

<PAGE>



                                                                    EXHIBIT 99A

                            INDEMNIFICATION AGREEMENT


         This  Agreement  is made as of the 13th day of September  1999,  by and
between IDX Systems Corporation,  a Vermont corporation (the "Corporation),  and
the  individual  who  executes  this  Agreement  as   "Indemnitee"   below  (the
"Indemnitee"), a director or officer of the Corporation.

         WHEREAS, it is essential to the Corporation to retain and attract as
directors and officers the most capable persons available, and

         WHEREAS,  it is now and has  always  been  the  express  policy  of the
Corporation  to indemnify  its directors and officers so as to provide them with
the maximum possible protection permitted by law; and

         WHEREAS,  Indemnitee does not regard the protection available under the
Corporation's Articles of Incorporation and insurance as adequate in the present
circumstances,  and may not be willing to serve as a director or officer without
adequate protection; and

         WHEREAS,  the Corporation  desires Indemnitee to serve as a director or
officer of the Corporation.

         NOW  THEREFORE,  the  Corporation  and  Indemnitee  do hereby  agree as
follows:

         1.       Agreement to Serve.

         Indemnitee  agrees  to serve or  continue  to  serve as a  director  or
officer of the  Corporation so long as he or she is duly elected or appointed or
until such time as he or she  tenders his or her  resignation  in writing or the
Corporation terminates its relationship with him or her.

         2.       Definitions.

         As used in this Agreement:

                  (a) The term  "Proceeding"  means any  threatened,  pending or
completed action, suit, or proceeding,  whether civil, criminal,  administrative
or  investigative,  and whether  formal or  informal,  and shall  include  suits
brought by or on behalf of the Corporation,  derivatively or otherwise,  and all
appeals in connection with any action, suit or proceeding.

                  (b) "Official  Capacity" means: (i) with respect to a director
of the Corporation, the office of director of the Corporation; (ii) with respect
to an officer of the Corporation, the office held by the officer.

                  (c)  "Expenses"   means  the  reasonable   costs  incurred  in
connection with a Proceeding,  and shall include (without limitation) reasonable
attorneys' fees, retainers, court costs, transcript costs, fees of experts, fees
of  investigators,  travel  expenses,  duplicating  costs,  printing and binding
costs, telephone charges, postage, delivery service fees and other disbursements
or expenses of the types  customarily  incurred in connection with a Proceeding,
but shall not include the amount of judgment or Fines  incurred by Indemnitee or
amounts paid to settle a proceeding.

<PAGE>

                  (d) "Other  Capacity"  means all employment of the director by
(or agency  relationship of the director with) the Corporation,  and all actions
taken or omitted and all  services  provided by the director to, for the benefit
of, or on behalf  of,  the  Corporation,  including  any  directorship,  office,
employment,   or  agency  relationship  undertaken,  or  services  provided,  by
Indemnitee in connection with a Nominee Entity, provided, however, that an Other
Capacity shall not include an Official Capacity.

                  (e)  "Nominee   Entity"   means  any  entity  other  than  the
Corporation,  including any foreign or domestic corporation,  partnership, joint
venture,  trust,  or employee  benefit plan,  for which the Indemnitee is or was
serving at the  Corporation's  request.  The  Indemnitee  is serving an employee
benefit  plan at the  Corporation's  request if the  Indemnitee's  duties to the
Corporation  also  impose  duties  on, or  otherwise  involve  services  by, the
Indemnitee to the plan or its participants or beneficiaries.

                  (f) "Fines" means fines and  penalties,  and shall include any
excise tax assessed with respect to any employee benefit plan.

                  (g) "Special  Legal Counsel" means counsel that has never been
an  employee  of the  Corporation  and who has  not,  and  whose  firm  has not,
performed legal services for the Corporation  pertaining to the matter for which
indemnification is sought for a period of at least two years before retention as
special counsel.

         3.       Indemnification in Third-Party Proceedings.

                  (a)  The   Corporation   shall  indemnify  and  hold  harmless
Indemnitee in connection  with any Proceeding  (other than a Proceeding by or in
the right of the  Corporation to procure a judgment in its favor) because of his
or her Official  Capacity or because of any action alleged to have been taken or
omitted in  connection  therewith,  against all  Expenses,  judgments,  or Fines
actually  incurred by Indemnitee or on his or her behalf in connection with such
Proceeding,  if: (i) the  Indemnitee  acted in good faith;  (ii) the  Indemnitee
reasonably  believed his or her conduct was in the Corporation's  best interest;
and (iii) in the case of any Proceeding  brought by a governmental  entity,  the
Indemnitee  had no  reasonable  cause to  believe  that his or her  conduct  was
unlawful,  and the Indemnitee is not finally found to have engaged in a reckless
or intentional  unlawful act. The Corporation shall not indemnify Indemnitee for
Expenses,  judgments,  or Fines under this Paragraph  3(a) in connection  with a
Proceeding  as to which  Indemnitee  is  adjudged  liable  on the  basis  that a
personal benefit was improperly received by the Indemnitee.


                  (b) The  Corporation  shall  indemnify  and hold  harmless the
Indemnitee in connection  with any Proceeding  (other than a Proceeding by or in
the right of the  Corporation to procure a judgment in its favor) because of his
or her Other  Capacity or any action or  omission  alleged to have been taken or
omitted in  connection  therewith,  against  all  Expenses,  judgments  or Fines
incurred by or on behalf of  Indemnitee,  if: (i) the  Indemnitee  acted in good
faith; (ii) the Indemnitee  reasonably  believed that his or her conduct was not
opposed to the Corporation's best interest (Indemnitee's conduct with respect to
an employee benefit plan for a purpose Indemnitee  reasonably  believed to be in
the interests of the  participants  in and  beneficiaries  of the plan satisfies
this  requirement);  and  (iii)  in the  case  of any  Proceeding  brought  by a
governmental  entity, the Indemnitee had no reasonable cause to believe that his
or her conduct was  unlawful,  and  Indemnitee is not found to have engaged in a
reckless or  intentional  unlawful  act.  The  Corporation  shall not  indemnify
Indemnitee  for  Expenses,  judgments,  or Fines  under this  Paragraph  3(b) in
connection  with a Proceeding as to which  Indemnitee is adjudged  liable on the
basis that a personal benefit was improperly received by the Indemnitee.

                  (c) The  termination  of any  Proceeding  by judgment,  order,
settlement, conviction or upon a plea of nolo contendere (or similar plea) shall
not, of itself, create a presumption that Indemnitee did not act in


<PAGE>


good faith and in a manner which he or she reasonably believed to be in the best
interests  of the  Corporation,  or not  opposed  to the best  interests  of the
Corporation,  or that Indemnitee had reasonable cause to believe that his or her
conduct was unlawful.

                  (d)  If  Indemnitee  is  not  otherwise  entitled  under  this
Paragraph 3 to  indemnification of some or all Expenses incurred by or on behalf
of Indemnitee in connection with a Proceeding  (other than a Proceeding by or in
the right of the Corporation for a judgment in its favor), the Corporation shall
in any event indemnify and hold harmless Indemnitee for such Expenses if a court
of competent  jurisdiction  determines that Indemnitee is, in view of all of the
circumstances, fairly and reasonably entitled to indemnification.

         4.   Indemnification   in  Proceedings  by  or  in  the  Right  of  the
Corporation.

                  (a)  The   Corporation   shall  indemnify  and  hold  harmless
Indemnitee  in  connection  with  any  Proceeding  by or in  the  right  of  the
Corporation  to procure a judgment in its favor  because of his or her  Official
Capacity  or  because  of any  action  alleged  to have been taken or omitted in
connection  therewith,  against all Expenses incurred by Indemnitee or on his or
her behalf in connection with such Proceeding,  if he or she acted in good faith
and in a manner which he or she reasonably  believed to be in the best interests
of the  Corporation,  and if he or she is not adjudged in  connection  with such
Proceeding to have improperly received a personal benefit.

                  (b)  The   Corporation   shall  indemnify  and  hold  harmless
Indemnitee  in  connection  with  any  Proceeding  by or in  the  right  of  the
Corporation  to  procure a  judgment  in its favor  because  of his or her Other
Capacity  or  because  of any  action  alleged  to have been taken or omitted in
connection  therewith,  against all Expenses incurred by Indemnitee or on his or
her behalf in connection with such Proceeding,  if he or she acted in good faith
and in a manner in which he or she  reasonably  believed  was not opposed to the
best  interests  of  the  Corporation,  and if he or  she  is  not  adjudged  in
connection with such Proceeding to have improperly received a personal benefit.

                  (c) The  Corporation  shall not indemnify  Indemnitee  for any
judgment  against  Indemnitee  in a  Proceeding  by  or  in  the  right  of  the
Corporation for a judgment in its favor.

                  (d)  If  Indemnitee  is  not  otherwise  entitled  under  this
Paragraph 4 to  indemnification of some or all Expenses incurred by or on behalf
of  Indemnitee  in  connection  with  a  Proceeding  by or in the  right  of the
Corporation  for a judgment  in its favor,  the  Corporation  shall in any event
indemnify and hold harmless Indemnitee for such Expenses if a court of competent
jurisdiction determines that Indemnitee is, in view of all of the circumstances,
fairly and reasonably entitled to indemnification.

         5.       Exceptions to Right of Indemnification.

         Notwithstanding  anything to the contrary in this Agreement: (a) except
as set forth in Paragraph 11, the Corporation shall not indemnify the Indemnitee
in connection  with a Proceeding  (or part thereof)  initiated by the Indemnitee
unless the  initiation  thereof was  approved by the Board of  Directors  of the
Corporation;  and (b) the Corporation  shall not indemnify the Indemnitee to the
extent the Indemnitee has been reimbursed from the proceeds of insurance. In the
event the Corporation makes any  indemnification  payments to the Indemnitee and
the Indemnitee is subsequently  reimbursed  from the proceeds of insurance,  the
Indemnitee   shall  promptly  refund  such   indemnification   payments  to  the
Corporation to the extent of such insurance reimbursement.


<PAGE>


         6.       Indemnification of Expenses of Successful Party.

         Notwithstanding  anything  to the  contrary in this  Agreement,  to the
extent that  Indemnitee  has been  successful,  on the merits or  otherwise,  in
defense of any Proceeding or in defense of any claim,  issue or matter  therein,
made because of Indemnitee's  Official  Capacity or Other Capacity or any action
or omission in connection herewith,  Indemnitee shall be indemnified against all
Expenses  incurred by him or her on his or her behalf in  connection  therewith.
Without limiting the foregoing,  if any Proceeding or any claim, issue or matter
therein is disposed  of, on the merits or  otherwise  (including  a  disposition
without prejudice), without (i) the disposition being adverse to the Indemnitee,
(ii) an adjudication that the Indemnitee was liable to the Corporation,  (iii) a
plea of guilty or nolo contendere by the Indemnitee,  (iv) an adjudication  that
the Indemnitee did not act in good faith and in a manner he reasonably  believed
to be in or not opposed to the best interests of the  Corporation,  and (v) with
respect to any criminal  proceeding,  an  adjudication  that the  Indemnitee had
reasonable  cause to believe  his or her conduct was  unlawful,  the  Indemnitee
shall be considered for the purposes hereof to have been wholly  successful with
respect thereto.


         7.       Notification and Defense of Claim.

                  (a)  As a  condition  precedent  to his  or  her  right  to be
indemnified,  the Indemnitee  must notify the  Corporation in writing as soon as
reasonably  practicable of any  Proceeding for which  indemnity will or could be
sought by him or her and provide  the  Corporation  with a copy of any  summons,
request for information,  notice of formal or informal investigation or inquiry,
citation,  subpoena,  complaint,  indictment,   information  or  other  document
relating to such Proceeding with which he or she is served.

                  (b) With respect to any Proceeding (other than a Proceeding by
or in the right of the  Corporation to procure a judgment in its favor) of which
the Corporation is so notified, the Corporation shall be entitled to participate
therein  at its own  expense  and/or to assume  the  defense  thereof at its own
expense.  After notice from the Corporation to the Indemnitee of its election so
to assume such defense,  the  Corporation  shall not be liable to the Indemnitee
for any legal or other  expenses  subsequently  incurred  by the  Indemnitee  in
connection with such claim, other than as provided below in this Paragraph 7.

                  (c) The  Indemnitee  shall have the right to employ his or her
own counsel in  connection  with a Proceeding  as to which the  Corporation  has
assumed the defense of  Indemnitee,  but the  Expenses in  connection  with such
counsel  incurred  after notice from the  Corporation  of its  assumption of the
defense  shall not be at the  expense  of the  Corporation,  and shall be at the
expense  of  the  Indemnitee,  unless  (i)  the  employment  of  counsel  by the
Indemnitee  has been  authorized  by the  Corporation,  (ii) there is a material
conflict of interest  between the  Corporation and the Indemnitee in the conduct
of the defense of such action or (iii) the  Corporation  does not in fact employ
counsel to assume the defense of such action.

         8.       Advancement of Expenses.

         Subject to  Paragraph  10, in the event that the  Corporation  does not
assume the defense of a Proceeding  pursuant to Paragraph 7 it shall advance all
Expenses  incurred  by or on  behalf  of the  Indemnitee  in  connection  with a
Proceeding as to which indemnification may be due pursuant to Paragraphs 3 or 4,
prior to the final  disposition  of such  matter,  upon:  (i)  receipt  of (a) a
written affirmation of the Indemnitee's good faith belief that he or she met the
standard of conduct required by Paragraph 3 or 4 hereof,  and (b) an undertaking
by or on


<PAGE>


behalf of Indemnitee to repay all amounts so advanced in the event that it shall
ultimately be determined  that the  Indemnitee is not entitled to be indemnified
by the  Corporation;  and (ii) a determination  pursuant to Paragraph 9 that the
facts  then  known  to  those  making  the  determination   would  not  preclude
indemnification under applicable law. The undertaking required by this paragraph
shall be an unlimited  general  obligation  of the  Indemnitee,  but need not be
secured  and shall be  accepted  without  reference  to  Indemnitee's  financial
ability to make repayment. The Corporation shall in good faith seek to settle or
otherwise compromise,  on behalf of Indemnitee and at the Corporation's expense,
all  claims  (other  than  claims  by or in the right of the  Corporation  for a
judgment in its favor) as to which  advancement  of  Expenses is required  under
this Agreement.


9.       Procedure for Indemnification.

                  (a) In order  to  obtain  indemnification  or  advancement  of
Expenses pursuant to Paragraphs 3, 4, 6 or 8 of this Agreement, Indemnitee shall
submit to the  Corporation  a written  request,  including  in such request such
documentation  and  information as is reasonably  available to Indemnitee and is
reasonably  necessary  to  determine  whether and to what extent  Indemnitee  is
entitled to  indemnification  or advancement of Expenses.  The Corporation shall
make  payment  within 30 days  after  receipt  by the  Corporation  of a written
request for indemnification to which Indemnitee is entitled under Paragraph 6 of
this Agreement.

                  (b) The  Corporation  shall use its best  efforts  to make any
determination  referred to in Paragraphs  3, 4 or 8 within  fifteen (15) days of
receipt of any request for advancement of Expenses or  indemnification  pursuant
to such  Paragraphs.  Any  such  indemnification  or  advancement  shall be made
promptly,  and in any event within 30 days after receipt by the  Corporation  of
the written request of the Indemnitee, unless with respect to such a request the
Corporation  determines  within  such 30 day period  that it is unable to make a
determination  required by such Paragraphs as a condition to  indemnification or
advancement. Such determination shall be made in each instance by (a) a majority
vote of a quorum of the directors of the  Corporation  consisting of persons who
are not at that time parties to the Proceeding ("disinterested  directors"), (b)
if a quorum cannot be obtained  under clause (a), a majority vote of a quorum of
a committee  duly  designated  by the board of directors  (in which  designation
directors  who are parties may  participate),  consisting  solely of two or more
directors  who are not  parties to the  Proceeding,  (c) by  written  opinion of
Special Legal Counsel selected by the board of directors or its committee in the
manner  prescribed  in  clauses  (a) or (b),  or if a  quorum  of the  board  of
directors  cannot be obtained as set forth in clause (a) and a committee  cannot
be  designated  as set forth in clause (b),  selected by a majority  vote of the
full board of  directors  (in which  selection  directors  who are  parties  may
participate), or (d) by the shareholders, but shares owned by or voted under the
control of directors  who are at the time parties to the  Proceeding  may not be
voted on the determination.

         10.      Remedies.

                  (a) The rights to indemnification  or advancement  provided by
this Agreement  shall be enforceable by the Indemnitee in any court of competent
jurisdiction  if  the  Corporation  denies  a  request  for  indemnification  or
advancement,  in  whole  or in  part,  or if no  disposition  of a  request  for
indemnification  or  advancement  is made within the 30-day  period  referred to
above in Paragraph 9(b).

                  (b) Unless  otherwise  required by law,  the burden of proving
that Indemnitee is not entitled to indemnification,  advancement,  or to be held
harmless  shall be on the  Corporation.  In the event that any action to enforce
rights  to  advancement  of  Expenses  is filed in a court,  the  parties  shall
stipulate:  (i) that the  question  of  Indemnitee's  right  to  advancement  of
Expenses during the pendency of the action to enforce such rights to advancement
is appropriate for resolution by preliminary injunction;  (ii) that the question
whether such a


<PAGE>



preliminary  injunction  should issue shall be made on the basis of Indemnitee's
affirmation, and the facts then known to the parties without discovery except as
to the basis for factual  assertions of the  Corporation;  (iii) that Indemnitee
shall be  irreparably  harmed if advancement is not promptly made; and (iv) that
Indemnitee  shall  not be  required  to post  any  bond  or  other  security  in
connection  with  such  preliminary  injunction.  Neither  the  failure  of  the
Corporation to have made a  determination  (nor an actual  determination  by the
Corporation) pursuant to Paragraph 9 shall create a presumption or be admissible
as evidence that  Indemnitee is not entitled to advancement or  indemnification.
Indemnitee's Expenses in connection with successfully  establishing his right to
indemnification, advancement, or to be held harmless, in whole or in part, shall
be paid by the Corporation.

         11.      Partial Indemnification and Contributions.

                  (a) If  Indemnitee  is entitled  under any  provision  of this
Agreement to be indemnified or held harmless by the Corporation for some portion
of  Expenses,  judgments,  or Fines  incurred by or on behalf of  Indemnitee  in
connection  with any  Proceeding,  but not for the  total  amount  thereof,  the
Corporation shall  nevertheless  indemnify and hold harmless  Indemnitee for the
portion of such Expenses,  judgments,  or Fines to which Indemnitee is entitled.
In making any  allocation of Expenses,  judgments or Fines between  matters that
are  covered  or  not  covered  under  any  provision  of  this  Agreement,  the
Corporation  shall  indemnify,  advance  or  hold  harmless  Indemnitee  for all
Expenses,  judgments,  or  Fines  incurred  by or on  behalf  of  Indemnitee  in
connection  with matters  covered by this  Agreement,  and shall not  indemnify,
advance or hold harmless Indemnitee for Expenses,  Judgments or Fines that would
not have been incurred absent the pendency of uncovered matters.

                  (b) In the  event  that  Indemnitee  and the  Corporation  are
jointly  liable for any judgment or Fines in  connection  with a Proceeding  (or
would be jointly  liable if joined in the  Proceeding),  and  Indemnitee  is not
entitled to be  indemnified  or held harmless  pursuant to Paragraphs 3, 4 or 8,
then the  Corporation  shall pay or contribute to, to the extent it is permitted
by  law to do  so,  all  Expenses,  judgments,  Fines  otherwise  due  from  the
Indemnitee in such  proportion as is  appropriate  to reflect the greater of (i)
the  relative  benefits  received by the  Corporation  (on the one hand) and the
Indemnitee (on the other hand) from the matters from which the Proceeding arose,
or (ii) the relative fault of the  Corporation  in connection  with matters from
which the Proceeding arose. The relative fault of the Corporation on the (on the
one hand) and of the  Indemnitee  (on the other  hand)  shall be  determined  by
reference  to, among other  things,  the parties'  relative  intent,  knowledge,
access to  information,  and  opportunity to correct or prevent the matters from
with the Proceeding  arose. The parties  acknowledge and agree that it would not
be just  and  equitable  if  contribution  pursuant  to this  Paragraph  11 were
determined by pro rata  allocation  or any other method of allocation  that does
not take account of the foregoing equitable considerations.

         12.      Subrogation.

         In the event of any payment under this Agreement, the Corporation shall
be  subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee,  who shall execute all papers required and take all action necessary
to secure such rights, including execution of such documents as are necessary to
enable the Corporation to bring suit to enforce such rights.


         13.      Term of Agreement.

         This  Agreement  shall apply with  respect to all  Proceedings  covered
hereby  regardless  of whether  the acts or  omissions  complained  of in such a
Proceeding occurred or allegedly occurred before or after the date of


<PAGE>


this  Agreement.  All agreements and  obligations of the  Corporation  contained
herein shall continue  during the period the Indemnitee is a director,  officer,
employee,  or agent of the  Corporation  (or is  serving  at the  request of the
Corporation as a director,  officer,  employee, or agent of another corporation,
partnership,  joint  venture,  trust,  or other  enterprise)  and shall continue
thereafter  for so  long  as the  Indemnitee  may be  subject  to any  possible,
contemplated, or actual Proceeding.

         14.      Indemnification Hereunder Not Exclusive.

         The  indemnification  and  advancement  of  Expenses  provided  by this
Agreement shall not be deemed  exclusive or any other rights to which Indemnitee
may be entitled under the Second Amended and Restated Articles of Incorporation,
as may be amended from time to time, Articles of the Bylaws, any agreement,  any
vote  of  stockholders  of   disinterested   directors,   the  Vermont  Business
Corporation Law, any other law (common or statutory),  or otherwise,  both as to
action in his or her Official  Capacity or Other Capacity.  Nothing contained in
this Agreement shall be deemed to prohibit the  Corporation  from purchasing and
maintaining  insurance,  at its  expense,  to protect  itself or the  Indemnitee
against any expense,  liability or loss incurred by it or the  Indemnitee in any
such capacity,  or arising out of his or her status as such,  whether or not the
Indemnitee  would be indemnified  against such expense,  liability or loss under
this  Agreement;  provided  the  Corporation  shall  not be  liable  under  this
Agreement to make any payment of amounts  otherwise  indemnifiable  hereunder if
and to the extent that Indemnitee has otherwise  actually  received such payment
under any insurance policy, contract, agreement or otherwise.

         15.      No Special Rights.

         Nothing  herein shall confer upon  Indemnitee  any right to continue to
serve as an officer or director of the  Corporation for any period of time or at
any particular rate of compensation.

         16.      Savings Clause.

         If this  Agreement or any portion  thereof shall be  invalidated on any
ground  by any  court of  competent  jurisdiction,  then the  Corporation  shall
nevertheless indemnify Indemnitee as to Expenses,  judgments,  and Fines paid in
settlement  with respect to any  Proceeding to the full extent  permitted by any
applicable  portion of this Agreement that shall not have bee invalidated and to
the fullest extent permitted by applicable law.


         17.      Counterparts.

         This Agreement may be executed in any number of  counterparts,  each of
which shall constitute the original.

         18.      Successors and Assigns.

         This Agreement shall be binding upon the Corporation and its successors
and  assigns and shall inure to the  benefits of the estate,  heirs,  executors,
administrators and personal representatives of Indemnitee.

         19.      Headings.

         The  headings of the  paragraphs  of this  Agreement  are  inserted for
convenience only and shall not be deemed to constitute part of this Agreement or
to affect the construction thereof.


<PAGE>



         20.      Modification and Waiver.

         This  Agreement may be amended from time to time to reflect  changes in
Vermont law or for other reasons.  No supplement,  modification  or amendment of
this  Agreement  shall be  binding  unless  executed  in  writing by both of the
parties  hereto.  No waiver of any of the provisions of this Agreement  shall be
deemed or shall  constitute a waiver of any other provision hereof nor shall any
such waiver constitute a continuing waiver.

         21.      Notices.

         All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been given (i) when  delivered by hand
or (ii) if mailed by certified or registered mail with postage  prepaid,  on the
third day after the date on which it is so mailed:

                To the Indemnitee addressed as follows:

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


                To the Corporation addressed as follows:

                IDX Systems Corporation
                1400 Shelburne Road
                South Burlington, Vermont 05402-1022
                Attention:  President

                With a copy to:

                General Counsel
                IDX Systems Corporation
                1400 Shelburne Road
                South Burlington, Vermont 05402-1022

or to such other address as may have been  furnished in writing to Indemnitee by
the Corporation or to the Corporation by Indemnitee.


<PAGE>


         22.      Applicable Law.

         This  Agreement  shall be governed by and construed in accordance  with
the laws of the State of Vermont.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.


IDX SYSTEMS CORPORATION                     Indemnitee:



By:____________________________________     ____________________________________
  [Signature of IDX authorized officer]     [Signature of Indemnitee]


Print Name:                                 Print Name:


Title:
      -------------------------



<PAGE>


                                                                    EXHIBIT 99B

                        AMENDMENT TO AMENDED AND RESTATED
                         CONSULTING/EMPLOYMENT AGREEMENT

         This  amendment is entered  into as of the 16th of February,  1999 (the

"Effective Date"), by and between IDX Systems Corporation, a Vermont corporation

with its principal place of business at 1400 Shelburne Road, Burlington, Vermont

05402-1070 (the  "Corporation"),  and Henry M. Tufo, M.D. of Hinesburg,  Vermont

(the "Employee).

         This amendment amends the  Consulting/Employment  Agreement  originally

entered  into by and between the  Corporation,  the  Employee,  and the Majority

Shareholders on February 1, 1995, and amended and restated on March 7, 1995 (the

"Agreement").

         In consideration of the covenants set forth herein, the parties,

intending to be bound, agree as follows:

         1.       Paragraph 1 shall cease to be effective as of the Effective
Date and from and after the Effective Date, the following shall apply:

         The  Corporation  agrees to  employ  the  Employee  as  Executive  Vice
         President  from the  Effective  Date until June 30, 1999,  and Employee
         agrees to serve as such,  subject  to the terms and  conditions  of the
         Agreement and this  Amendment.  As Executive Vice  President,  Employee
         will continue to work from his current office with his current staff to
         enable him to perform his duties. Thereafter,  Employee agrees to serve
         as a consultant to the Corporation until June 30, 2000,  subject to the
         terms  and  conditions  of  the  Agreement  and  this  Amendment.   The
         Corporation will provide Employee with reasonable  facilities and staff
         to  enable  him to  provide  consulting  services  to the  Corporation,
         including   reasonable  office  space,  a  computer,  a  secretary  and
         electronic mail.

         2. Paragraph 2 shall cease to be effective as of the Effective Date and

from and after the Effective Date, the following shall apply:

         Employee's duties and  responsibilities  as an Executive Vice President
         shall be as described in  Attachment  A, and his duties as a consultant
         shall be in the areas of  Internet  activities  related to medical  and
         clinical  practice,  key  customer  issues,  organizational  design and
         measures,  key strategies or other areas  consistent with his fields of
         expertise and background, as assigned by the Chief Executive Officer of
         the  Corporation.  Employee  shall be available for  approximately  one
         hundred  twenty  (120) hours of service per month.  If the  Corporation
         does not assign tasks  sufficient  to require one hundred  twenty (120)
         hours of service per month, the Employee shall nevertheless be entitled
         to  receive  the  compensation  set forth in  Paragraph  3 as if he had
         performed such services.


<PAGE>



         3. Paragraph 3 shall cease to be effective as of the Effective Date and

from and after the Effective Date, the following shall apply:

          The  Corporation   shall  compensate  the  Employee  as  set  forth
          in Attachment A to this Amendment.

         4. Paragraph 4 shall cease to be effective as of the Effective Date and

from and after the Effective Date, the following shall apply:

          Employer shall furnish to Employee the benefits described in
          Attachment A from and after the Effective Date.

          5. Paragraphs 5 and 6 shall cease to be effective as of the Effective

Date and shall be replaced with the following:

          Either party may terminate this Agreement for any reason and at any
          time upon ten (10) days written notice.  However, if the Corporation
          terminates this Agreement prior to June 30, 2000 for any reason other
          than (a) fraud committed by the Employee, (b) criminal conduct by the
          Employee, or (c) continued gross failure of Employee to perform
          adequately his duties under this Agreement when measured against
          mutually agreed on written performance goals and improvement plan
          (unless because of disability as defined in the IDX employee guide),
          the Employee and the Corporation agree that damages would be difficult
          to calculate and therefore the Corporation shall pay to Employee, as
          liquidated damages, and not as a penalty, the following:  (x) the
          compensation due to Employee as if Employee's services had continued
          until June 30, 2000, plus (y) an amount equal to the difference
          between the market price of IDX Common Stock on the date of
          termination and the exercise price for all unexercised options granted
          to Employee that would have become exercisable on or before June 30,
          2000.  Upon payment of such liquidated damages, the Corporation
          shall have no further liability to Employee under this Agreement.
          A summary of all unexercised options granted to Employee as of the
          Effective Date that are scheduled to become exercisable before
          June 30, 2000 is set forth in Attachment A.

          6. Paragraph 8 shall be amended by deleting  "provided,  however,

that this Agreement shall  thereafter be considered  automatically  renewed for

successive one-year  periods if not  terminated  by either  party by giving at

least twelve(12)  months'  advance  written  notice of the intent  not to

renew."  The last sentence of Paragraph 8 shall cease to be effective from and

after the Effective Date.

          7.  Paragraph  15 shall cease to be  effective  from and after

July 1, 1999.

          8.  Paragraph 16 shall be amended by inserting  the  following

after the first sentence:

         Notwithstanding  anything to the contrary, the "Noncompetition  Period"
         referred to in Section 5  ("Covenant  Not to  Compete") of Exhibit A of
         the  Agreement  shall begin on the date the  Agreement  terminates  and
         continue for twelve (12) months thereafter.


<PAGE>


         IN WITNESS WHEREOF the parties have set their hands as of the day and

year first written above.

                                            IDX SYSTEMS CORPORATION



                                            By:/s/ Richard E. Tarrant
                                               -------------------------------
                                               Its Duly Authorized Agent



                                               /s/ Henry M. Tufo
                                               ------------------------------
                                               Henry M. Tufo, M.D.


THE  FOLLOWING  PERSONS  HAVE  PERSONS HAVE SIGNED BELOW FOR THE SOLE PURPOSE OF
INDICATING THEIR CONSENT TO THE TERMS OF THIS AMENDMENT.



/s/ Richard E. Tarrant
-----------------------------------
Richard E. Tarrant


/s/ Robert H. Hoehl
-----------------------------------
Robert H. Hoehl


<PAGE>



                                  ATTACHMENT A

                         EXECUTIVE VICE PRESIDENT DUTIES
                  (AS ASSIGNED BY THE CHIEF EXECUTIVE OFFICERS)


                  o        Management transition issues

                  o        Internet activities related to medical and clinical
                           practice

                  o        Key customer issues

                  o        Organizational design and measures

                  o        Key  strategies  and  other  areas   consistent  with
                           Employee's field of expertise.


                                  COMPENSATION


AS EXECUTIVE VICE PRESIDENT

                  o        Salary at the rate of $300,000.00 per annum,
                           payable semi-monthly
                  o        Bonus  similar  to that of other  senior  management,
                           payable for that portion of the year Employee  serves
                           as Executive Vice President
                  o        Standard company benefits.  Stock options shall not
                           be granted to Employee.


AS CONSULTANT

                  o        $400,000.00 for services provided between 7/1/99 and
                           6/30/00, payable semi-monthly



<PAGE>




                    Options Summary as of the Effective Date
-------------- ------------------- -------------- ----------------- ------------
Option No.     Grant Date          Granted        Full Vest         Exercisable
-------------- ------------------- -------------- ----------------- ------------
-------------- ------------------- -------------- ----------------- ------------
000566         5/1/97              1808           5/1/98            1808
-------------- ------------------- -------------- ----------------- ------------
-------------- ------------------- -------------- ----------------- ------------
000566         5/1/97              1808           5/1/99            0
-------------- ------------------- -------------- ----------------- ------------
-------------- ------------------- -------------- ----------------- ------------
000566         5/1/97              1808           5/1/00            0
-------------- ------------------- -------------- ----------------- ------------
-------------- ------------------- -------------- ----------------- ------------
000567         5/1/97              1808           2/13/98           1808
-------------- ------------------- -------------- ----------------- ------------
-------------- ------------------- -------------- ----------------- ------------
000567         5/1/97              1808           5/1/05*           0
-------------- ------------------- -------------- ----------------- ------------
-------------- ------------------- -------------- ----------------- ------------
000567         5/1/97              1808           5/1/05*           0
-------------- ------------------- -------------- ----------------- ------------
-------------- ------------------- -------------- ----------------- ------------
000810         11/24/97            3050           11/24/98          3050
-------------- ------------------- -------------- ----------------- ------------
-------------- ------------------- -------------- ----------------- ------------
000810         11/24/97            3050           11/24/99          0
-------------- ------------------- -------------- ----------------- ------------

------------------------
*   While the exercise  date for these  options is beyond June 30, 2000,  these
options are  included  in the  summary  since  Employee  may become  entitled to
exercise these options in 1999 and 2000 if the  Corporation  meets certain goals
for 1998 and 1999, respectively. If the Corporation does not meet such goals for
those years,  these  options  would not become  exercisable  until  5/1/05,  and
Employee  would not receive the amount  described  in  paragraph  5(y) for those
options.

<PAGE>


                                                                    EXHIBIT 99C

                     THIRD AMENDMENT TO AMENDED AND RESTATED
                         CONSULTING/EMPLOYMENT AGREEMENT

         This  amendment  is  entered  into as of the 1st of  August,  1999 (the

"Effective Date"), by and between IDX Systems Corporation, a Vermont corporation

with its principal place of business at 1400 Shelburne Road, Burlington, Vermont

05402-1070 (the  "Corporation"),  and Henry M. Tufo, M.D. of Hinesburg,  Vermont

(the "Employee).

         This amendment amends the  Consulting/Employment  Agreement  originally

entered  into by and between the  Corporation,  the  Employee,  and the Majority

Shareholders on February 1, 1995, and amended and restated on March 7, 1995, and

further amended on February 16, 1999 (the "Agreement").

         In consideration of the covenants set forth herein, the parties,

intending to be bound, agree as follows:

          1.       Paragraph 1 shall be amended by inserting after the sentence

reading "As Executive Vice President, Employee  will  continue  to work from his

current  office with his current staff to enable him to perform his duties."

the following new language:

         Beginning  July  1,  1999,  Employee  shall  serve  as  Executive  Vice
         President  on  a  month-to-month  basis.  Either  party  may  terminate
         Employee's employment as Executive Vice President by providing at least
         ten (10)  days  written  notice  to the  other  prior to the end of any
         calendar  month.  The giving of such notice  terminates  employment  as
         Executive  Vice  President at the end of the month in which such proper
         notice is given.

         2.       Attachment A to the Amendment dated February 16, 1999 shall be

amended by deleting the section "Compensation" and replacing with the following:

                                  COMPENSATION

         AS EXECUTIVE VICE PRESIDENT:

              o   Until June 30,  1999,  salary at the rate of  $300,000.00  per
                  annum,  payable  semi-monthly,  and bonus  similar  to that of
                  other senior management, payable for the 6-month period of the
                  year Employee serves as Executive Vice President;

               o Beginning July 1, 1999,  salary at the rate of $33,157.09
                 per month,  payable semi-monthly.


<PAGE>



         AS CONSULTANT:

               o  Compensation at the rate of $400,000.00 per annum, payable
                  semi-monthly.

         3. Paragraph 4 shall be amended by adding the following new sentence:

         Effective  July 1, 1999,  Employer  shall  furnish  to  Employee  the
         following benefits as long as Employee serves as Executive Vice
         President: basic life insurance/AD&D, Long Term Disability insurance,
         ShortTerm Disability  insurance, and reimbursement for Employee's
         election to waive medical insurance. Employer shall also pay the
         appropriate payroll taxes for Medicare.

         IN WITNESS WHEREOF the parties have set their hands as of the day and

year first written above.

                                            IDX SYSTEMS CORPORATION


                                            By: /s/ Robert W. Baker, Jr.
                                                -------------------------------
                                                Its Duly Authorized Agent


                                                /s/ Henry M. Tufo
                                                ------------------------------
                                                Henry M. Tufo, M.D.