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

                                  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 June 30, 2000

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

                         Commission File Number 0-26816

                             IDX SYSTEMS CORPORATION

             (Exact name of registrant as specified in its charter)

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

                               1400 Shelburne Road

                           South Burlington, VT 05403

                    (Address of principal executive offices)

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

         Indicate  by check mark  whether the  registrant  has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports).

                           Yes   X                No
                               -----

         Indicate by check mark whether the  registrant has been subject to such
filing requirements for the past 90 days.

                           Yes   X                No
                               -----

         The number of shares outstanding of the registrant's common stock as
of August 10, 2000 was 28,152,651.

================================================================================
                        [Exhibit index begins on Page 30]


<PAGE>



                             IDX SYSTEMS CORPORATION

                                    FORM 10-Q

                  For the Quarterly Period Ended June 30, 2000

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>


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

ITEM 1.  INTERIM FINANCIAL STATEMENTS (Unaudited)...........................3

         Condensed Consolidated Balance Sheets..............................3
         Condensed Consolidated Statements of Operations....................4
         Condensed Consolidated Statements of Cash Flows....................5
         Notes to Condensed Consolidated Financial Statements...............6

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS..........................................12


PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS..................................................27
ITEM 2.  CHANGES IN SECURITIES..............................................27
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES....................................27
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................27
ITEM 5.  OTHER INFORMATION..................................................28
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K...................................28


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


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

</TABLE>

                                  Page 2 of 30


<PAGE>


PART I.   FINANCIAL INFORMATION

Item 1.   Interim Financial Statements

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

                                            June 30,                December 31,
                                              2000                      1999
                                            ---------               ------------
<S>                                         <C>                     <C>

ASSETS
Cash and short term investments             $  85,387               $  68,359
Accounts receivable, net                       92,321                 110,759
Other current assets                            7,133                   5,153
Income tax deferred/receivable                 24,987                   7,890
                                            ---------               ---------
Total current assets                          209,828                 192,161
                                            ---------               ---------

Property and equipment, net                    65,862                  58,265
Other assets                                   12,435                  17,521
Deferred tax asset, net                         3,333                   3,200
                                            ---------               ---------
Total assets                                $ 291,458               $ 271,147
                                            =========               =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, accrued expenses
   and other liabilities                    $  51,898               $  37,970
Deferred revenue                               19,563                  17,459
                                            ---------               ---------
Total current liabilities                      71,461                  55,429
                                            ---------               ---------

Minority interest                               8,995                   9,204
Stockholders' equity                          211,002                 206,514
                                            ---------               ---------

Total liabilities and stockholders'
   equity                                   $ 291,458               $ 271,147
                                            =========               =========
</TABLE>


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

                                  Page 3 of 30


<PAGE>
PART I.   FINANCIAL INFORMATION

Item 1.   Interim Financial Statements


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

                               Three Months Ended         Six Months Ended
                                     June 30,                  June 30,
                               2000          1999         2000         1999
                               ----          ----         ----         ----
<S>                            <C>           <C>          <C>          <C>

REVENUES
Systems sales                  $ 21,090      $ 37,727     $ 42,740     $ 60,578
Maintenance and service fees     58,506        53,528      113,578      100,327
                               --------      --------    --------     --------

TOTAL REVENUES                   79,596        91,255      156,318      160,905

OPERATING EXPENSES
Cost of sales and services       60,660        56,295      115,820      105,098
Selling, general and
   administrative                21,442        21,212       39,787       41,201
Research and development         13,154        13,423       25,340       27,188
Restructuring charges            21,029             -       21,029            -
Merger and nonrecurring charge        -         4,045        5,810        4,045
                              ---------       --------    ---------     --------
TOTAL OPERATING EXPENSES        116,285        94,975      207,786      177,532
                              ---------       --------    ---------     --------

OPERATING LOSS                  (36,689)       (3,720)     (51,468)     (16,627)

Other (income) expense, net      (1,007)         (790)      (2,130)         381
                              ----------     ---------   ----------   ----------

Loss before income tax benefit  (35,682)       (2,930)     (49,338)     (17,008)

Income tax benefit              (13,659)         (680)     (16,816)      (6,180)
                               ----------     ---------   ----------   ---------

NET LOSS                      $ (22,023)     $ (2,250)   $ (32,522)   $ (10,828)
                              ==========     =========   ==========   ==========

Basic and diluted net loss
   per share                  $   (0.79)     $  (0.08)   $   (1.16)   $   (0.39)
                              ==========     =========   ==========   ==========

Basic and diluted weighted
   average shares outstanding     28,029       27,682       27,993       27,668
                               ==========    =========   ==========   ==========
</TABLE>


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

                                  Page 4 of 30


<PAGE>

PART I.   FINANCIAL INFORMATION

Item 1.   Interim Financial Statements

                             IDX SYSTEMS CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                      Six Months Ended
                                                           June 30,
                                                  2000                 1999
                                                  ----                 ----
<S>                                               <C>                  <C>

OPERATING ACTIVITIES
Net loss                                          $ (32,522)           $(10,828)
Adjustments to reconcile net loss to net cash
   used in operating activities:
    Depreciation                                      7,366               6,635
    Amortization                                        274                 459
    Deferred tax benefit, net of business
      acquisitions                                     (133)                  -
    Increase in allowance for doubtful accounts         705                 109
    Write-off of goodwill                             5,810                   -
    Minority interest                                   490                 247
    Loss on investment impairment                         -               1,642
    Restructuring charge                             21,029                   -
    Changes in operating assets and liabilities,
      net of business acquisitions:
       Accounts receivable                           14,228             (9,725)
       Prepaid expenses and other assets             (1,663)               981
       Accounts payable and accrued expenses         (3,758)             6,431
       Income tax deferred/receivable               (17,097)           (10,132)
       Deferred revenue                               2,104                 74
                                                   ---------          ---------

Net cash used in operating activities                (3,167)           (14,107)

INVESTING ACTIVITIES
Purchase of property and equipment, net             (15,015)           (20,609)
Purchase of securities available-for-sale            (8,795)          (129,372)
Sale of securities available-for-sale                 9,336            179,462
Business acquisitions                                     -            (6,500)
Other assets                                         (1,019)           (7,682)
                                                   ---------         ----------

Net cash (used in) provided by investing
   activities                                       (15,493)           15,299

FINANCING ACTIVITIES
Proceeds from sale of common stock                    4,837             2,460
Proceeds from debt issuances                              -             3,501
Contributions to affiliates, net                       (700)                -
Principal repayments of debt                              -           (11,373)
Proceeds from sale of preferred stock                32,089                 -
                                                   ---------         ----------
Net cash provided by financing activities            36,226            (5,412)
                                                   ---------         ----------

Increase (decrease) in cash and cash equivalents     17,566            (4,220)

Cash and cash equivalents at beginning of period     18,487            11,558
                                                   ---------         ----------
Cash and cash equivalents at end of period           36,053             7,338
Short term investments                               49,334            63,281
                                                   ---------         ----------
Total cash and short term investments              $ 85,387          $ 70,619
                                                   =========         ==========
</TABLE>

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

                                  Page 5 of 30


<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") have 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 accounting  principles  generally  accepted in
the United States.  Accordingly,  certain  information and footnote  disclosures
normally included in annual financial statements have been omitted or condensed.
In the  opinion  of  management,  all  necessary  adjustments  have been made to
provide a fair presentation. The operating results for the six months ended June
30, 2000 are not necessarily  indicative of the results that may be expected for
the year  ending  December  31,  2000.  For  further  information,  refer to the
consolidated financial statements and footnotes included in the Company's latest
annual report on Form 10-K.

Note 2 - New Accounting Standards

In June 1998,  the  Financial  Accounting  Standards  Board issued SFAS No. 133,
"Accounting for Derivatives and Hedging  Activities" ("SFAS No. 133") as amended
by SFAS No. 137,  which  establishes  accounting  and  reporting  standards  for
derivative  instruments,  including  derivative  instruments  embedded  in other
contracts, (collectively referred to as derivatives) and for hedging activities.
SFAS No. 133 is  effective  for all fiscal  quarters of fiscal  years  beginning
after June 15, 2000. The Company has determined that the impact, if any, of
adopting SFAS No. 133 is not expected to be significant.

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

In  March  2000,   the  Financial   Accounting   Standards   Board  issued  FASB
Interpretation  No. 44, "Accounting  for Certain  Transactions  involving  Stock
Compensation, an  interpretation of APB Opinion No. 25." The Company is required
to adopt the  Interpretation on July 1, 2000. The  Interpretation  requires that
stock options that have been modified to reduce the exercise  price be accounted
for as variable. As a result of adopting the Interpretation, the Company will be
required to adopt  variable  accounting to stock options that have been modified
and if the market  price of the  Company's  stock  increases  it will  recognize
additional compensation expense that it

                                  Page 6 of 30

<PAGE>

otherwise would not have incurred. The Company has not modified any stock option
grants in the past  year and  therefore  does not  anticipate  any  compensation
expense for stock options issued to date.

Note 3 - Restructuring Charge

On June  21,  2000 the  Company  announced  the  implementation  of a  workforce
restructuring  program.  The Company will halt development and discontinue sales
efforts on three product lines that have failed to achieve  business  targets or
have been deemed  non-strategic to the business going forward. In addition,  the
Company  implemented a work-force  reduction of approximately five percent.  The
program resulted in a one-time charge to earnings of  approximately  $21 million
in the second  quarter,  primarily  in  connection  with costs  associated  with
product discontinuations of approximately $16 million and severance arrangements
of approximately $5 million. Workforce related accruals,  consisting principally
of  severance  costs,  were  established  based on  specific  identification  of
employees to be terminated,  along with their job  classification  or functions,
and their location.  Substantially all workforce-related actions are expected to
be  completed  during the third  quarter of 2000 with the  exception  of product
related "sunset" support teams,  although under certain circumstances the actual
payment of  termination  costs may extend  beyond that date.  Cash  expenditures
related to these accruals are estimated to be substantially made as follows: $13
million in 2000, $8 million thereafter.

Note 4 - Business Acquisitions and Related Matters

On July 13, 2000,  the Company  announced  an  agreement  to sell  Channelhealth
Incorporated  to  Allscripts,   Inc.,  a  leading   provider  of   point-of-care
e-prescribing and productivity solutions for physicians.  Channelhealth provides
a set of Internet-based  clinical and productivity solutions for physicians that
brings the power of the Internet to the  practice of  medicine.  IDX will retain
the  Patient  and   e-Commerce   Channels,   which  were   previously   part  of
Channelhealth, enabling IDX to integrate an Internet solution that leverages its
core competencies in physician practice  management  systems. In addition to the
acquisition,  the Company has agreed to enter into a 10-year strategic  alliance
whereby Allscripts will become the exclusive provider of point-of-care  clinical
applications sold by IDX to physician practices,  providing Allscripts access to
IDX's current 118,000 physician practice management customers.  This will enable
IDX to offer a broader  product  portfolio of practice  management  and clinical
products,  increasing  the  number of sales  opportunities  to new and  existing
customers.

Under the terms of the deal,  which is subject  to  regulatory  and  Allscripts'
shareholder approval,  Allscripts will acquire Channelhealth in exchange for 8.6
million shares,  or 21.3% of Allscripts stock on a pro forma fully diluted basis
of which IDX will  receive  approximately  90%. The  transaction  is expected to
close in the fourth quarter of 2000.

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

                                  Page 7 of 30
<PAGE>

On April 1, 1999, the Company acquired an 80% interest in Channelhealth, Inc., a
Massachusetts  corporation,  for $6.5 million. The acquisition was accounted for
under the purchase method and resulted in $6.5 million of goodwill being
recorded on the Company's financial statements.

On June 23, 1999, the Company acquired all of the assets of  DietSite.com,  Inc.
for $1.5  million.  DietSite.com  is a website  that  includes  disease-oriented
dietary  information  with  extensive  proprietary  content on diets,  vitamins,
herbals and nutritionals.  Channelhealth,  Inc. and DietSite.com were originally
intended to be managed and  operated  with the  Company's  other web  technology
initiatives in a separate majority-owned  subsidiary. As described above certain
of Channelhealth operations will be sold to Allscripts.

Channelhealth   Incorporated  has  determined  that  there  has  been  an  asset
impairment  related to  goodwill  acquired in the  purchase  of a  Massachusetts
corporation Channelhealth Inc. in April, 1999. In January 2000, the Company made
the  decision  to seek a  primary  provider  of  content  and  transactions  for
ChannelHealth, and decided to no longer utilize certain assets acquired with the
purchase  of  Channelhealth.   The  Company  recognizes   impairment  losses  on
long-lived   assets  when  indicators  of  impairment  are  present  and  future
undiscounted  cash flows are insufficient to support the assets'  recovery.  The
amount of the impairment  loss is recognized  based on an analysis of discounted
cash  flows  estimated  to be  derived  from  the  impaired  asset.  This  asset
impairment has been recognized during the first quarter of 2000 and is reflected
as a  pre-tax  one-time  loss on  impairment  of assets  of  approximately  $5.8
million.

Note 5 - Income Taxes

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

Note 6- Segment Information

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

                                  Page 8 of 30

<PAGE>

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

Internet  Services and Content:  Channelhealth  Incorporated,  a majority  owned
subsidiary,  offers three Internet  channels that integrate  IDX's core practice
management systems with extensive  Internet-based  services and clinically valid
content.  ChannelHealth  services are  available  to  physicians  through  group
practices,   hospitals,   integrated   delivery   networks   and  managed   care
organizations.

Medical Dictation and Transcription  Services:  This reportable segment contains
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 included
in the Company's  annual report.  The Company  evaluates the  performance of its
operating segments based on revenue and operating income.  Intersegment revenues
are immaterial. No one customer accounts for greater than 10% of revenue for any
reportable segment for the three and six month periods ended June 30, 2000, with
the exception of EDiX. EDiX's revenues from one major customer amounted to 10.5%
and 0.0% of EDiX's total revenue during the three months ended June 30, 2000 and
June 30, 1999, respectively. EDiX's revenues from one major customer amounted to
10.2% and 0.0% of EDiX's total revenue during the six months ended June 30, 2000
and June 30, 1999, respectively.

                                  Page 9 of 30

<PAGE>

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

<TABLE>
<CAPTION>

                               IDX
                               HEALTHCARE
                               INFORMATION
                               SYSTEMS AND  CHANNELHEALTH
                               SERVICES     INCORPORATED     EDIX      TOTAL
                               -------------------------------------------------
<S>                            <C>          <C>              <C>       <C>

FOR THE THREE MONTHS
  ENDED JUNE 30, 2000

Net operating revenues         $ 60,469      $ 1,532         $ 17,595  $ 79,596
Operating income (loss)         (31,269)      (6,299)             879   (36,689)
Identifiable operating assets   241,049       30,029           20,380   291,458

FOR THE SIX MONTHS
  ENDED JUNE 30, 2000

Net operating revenues         $119,294      $ 2,751         $ 34,273  $156,318
Operating income (loss)         (36,105)     (17,092)           1,729   (51,468)
Identifiable operating assets   241,049       30,029           20,380   291,458

FOR THE THREE MONTHS
   ENDED JUNE 30, 1999

Net operating revenues         $ 80,075      $     -          $11,180  $ 91,255
Operating income (loss)           1,256         (942)          (4,034)   (3,720)
Identifiable operating assets   260,060        1,768           12,276   274,104

FOR THE SIX MONTHS
  ENDED JUNE 30, 1999

Net operating revenues         $140,256     $     -          $ 20,649  $160,905
Operating loss                  (10,610)       (942)           (5,075)  (16,627)
Identifiable operating assets   260,060       1,768            12,276   274,104

</TABLE>

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

                                 Page 10 of 30

<PAGE>


Note 7 - Earnings Per Share Information

The  following  sets forth the  computation  of basic and diluted  earnings  per
share:
<TABLE>
<CAPTION>

                                     THREE MONTHS ENDED    SIX MONTHS ENDED
                                           JUNE 30,              JUNE 30,
                                     2000        1999      2000        1999
                                     ----        ----      ----        ----
<S>                                  <C>         <C>       <C>         <C>
Numerator:
  Net loss                           $(22,023)  $(2,250)   $(32,522)   $(10,828)
                                     ---------  --------   ---------   ---------
Numerator for basic and diluted
  loss per share                     $(22,023)  $(2,250)   $(32,522)   $(10,828)
                                     ---------  --------   ---------   ---------

Denominator:

  Weighted-average shares              28,029    27,682      27,993      27,668
                                     --------   --------   ---------   ---------

Denominator for diluted loss per
  share                                28,029    27,682      27,993      27,668
                                     --------   --------   ---------   ---------
Basic and diluted loss per share     $  (0.79)  $ (0.08)   $  (1.16)   $  (0.39)
                                     =========  ========   =========   =========
</TABLE>

                                  Page 11 of 30

<PAGE>

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

GENERAL

The Company  reported a net loss of $22.0  million,  or $0.79 per diluted share,
for the second  quarter  of 2000 as  compared  to a net loss of $2.2  million or
$0.08 per diluted share, for the second quarter of 1999. Excluding the effect of
nonrecurring  charges  related to a restructuring  charge  announced on June 21,
2000, the Company  reported a net loss of $9.0 million,  or $0.32 per share, for
the second quarter of 2000. Excluding the effect of nonrecurring charges for the
acquisition of EDiX  Corporation  of $4.0 million,  the net income for the three
months ended June 30, 1999 was $700,000 or $0.02 per diluted share.

The Company  reported a net loss of $32.5 million,  or $1.16 per share,  for the
first six months of 2000 as compared to a net loss of $10.8 million or $0.39 per
diluted  share,  for the  first  six  months of 1999.  Excluding  the  effect of
nonrecurring  charges  related to a restructuring  charge  announced on June 21,
2000 and the write-off of goodwill associated with Channelhealth,  Inc., the net
loss for the six  months  ended  June 30,  2000 was $13.8  million  or $0.49 per
share.  Excluding the effect of the  nonrecurring  charge for the acquisition of
EDiX  Corporation  of $4.0 million,  and the impairment of an investment of $1.6
million, the net loss for the six months ended June 30, 1999 was $7.0 million or
$0.25 per share.

RESULTS OF OPERATIONS

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

REVENUES
The Company's total revenues  decreased to $79.6 million during the three months
ended June 30, 2000 from $91.3  million in the  corresponding  period in 1999, a
decrease of $11.7 million or (12.8%).  Revenues from systems sales  decreased to
$21.1  million  during  the three  months  ended June 30,  2000  (26.5% of total
revenues)   compared  to  $37.7  million  (41.3%  of  total   revenues)  in  the
corresponding  period in 1999,  a decrease  of $16.6  million or  (44.1%).  This
decrease  was  primarily  due to a decrease  in new sales and  installations  of
certain IDX systems.  Revenues from  maintenance  and service fees  increased to
$58.5  million  during  the three  months  ended June 30,  2000  (73.5% of total
revenues)  from $53.5  million  (58.7% of total  revenues) in the  corresponding
period in 1999,  an increase of $5.0  million or 9.3%.  The increase in revenues
from  maintenance  and service fees is primarily due to increased  transcription
service fee revenue from EDiX.

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

                                  Page 12 of 30
<PAGE>

Company  expects  that it will  experience  deferrals  and  delays  in  sales of
software and related services,  professional  services,  and hardware during the
remainder of 2000.

COST OF SALES AND SERVICES
The cost of sales and  services  increased  to $60.7  million  during  the three
months  ended June 30, 2000 from $56.3  million in the  corresponding  period in
1999,  an increase of $4.4  million or 7.8%.  The  increase in cost of sales and
services resulted from growth in client services expenses,  primarily related to
medical  transcription costs offset by a decrease in cost of hardware due to the
reduction in system sales as compared to the prior year. The gross profit margin
on systems sales and services  decreased to 23.8% in the second  quarter of 2000
from 38.3% for the same period in 1999. The decrease in gross profit margin as a
percentage of sales was due to the decrease in software  license  revenues which
provide a higher gross profit margin, and an increase in maintenance and service
revenue  which  provides a lower  gross  profit  margin.  IDX's  core  business,
information  systems and services,  gross profit margin as a percentage of sales
declined  to 27.0%  during  the  second  quarter of 2000 from 41.6% for the same
period in 1999 due to the effect of the revenue mix described  above.  The gross
profit margin for the Company's  medical  dictation and  transcription  business
segment (EDiX) increased as a percentage of sales to 18.8% in 2000 from 15.1% in
1999 due to an increase in utilization of a new transcription processing system,
which  provides a higher  margin,  as compared to the prior year,  combined with
other efficiencies in editing and telecommunications.  Channelhealth experienced
a negative gross margin of 43.9% during the second quarter of 2000 primarily due
to high fixed  costs  relative  to sales  volume due to the early  stage of this
business' development.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling,  general and administrative  expenses increased to $21.4 million during
the three months ended June 30, 2000 from $21.2 million during the corresponding
period in 1999,  an  increase  of $200,000  or 1.1%.  As a  percentage  of total
revenues, selling, general and administrative expenses increased to 26.9% during
the three  months  ended June 30,  2000 from 23.2% for the same  period in 1999.
IDX's core business selling,  general and administrative expenses decreased $3.3
million  primarily due to the transfer of certain expenses to the  Channelhealth
subsidiary.  EDiX's  selling,  general  and  administrative  expenses  increased
$676,000  or 47.0%  during the second  quarter of 2000 as  compared  to the same
period in the prior year  primarily  due to  increased  costs to  support  sales
growth.  Channelhealth's  selling, general and administrative expenses were $3.7
million  during the second  quarter of 2000 which  includes  sales and marketing
expenses and administrative start up expenses.

RESEARCH AND DEVELOPMENT
Research and  development  expenses  decreased to $13.2 million during the three
months  ended June 30, 2000 from $13.4  million in the  corresponding  period in
1999,  a decrease of  $200,000  or 2.0%.  The  decrease  is  primarily  due to a
reduction in the costs of efforts to address  Year 2000 issues.  As a percentage
of total  revenues,  research  and  development  expenses  increased to 16.5% of
revenue  for the second  quarter of 2000  compared  to 14.7% for the  comparable
period in 1999. IDX's core business research and development  expenses decreased
$2.1 million due to the transfer of  approximately  $1.9 million of research and
development  costs  to  the  Internet  services  and  content  business  segment
(ChannelHealth),  combined  with the  reduction  in costs to  address  Year 2000
issues.   Research  and   development   costs  in  the  medical   dictation  and
transcription  business  segment  (EDiX)  increased  from  $237,000  in  1999 to
$313,000 in 2000.

                                  Page 13 of 30
<PAGE>

RESTRUCTURING CHARGE
On June  21,  2000 the  Company  announced  the  implementation  of a  workforce
restructuring  program.  The Company will halt development and discontinue sales
efforts on three product lines that have failed to achieve  business  targets or
have been deemed  non-strategic to the business going forward. In addition,  the
Company  implemented a work-force  reduction of approximately five percent.  The
program resulted in a one-time charge to earnings of  approximately  $21 million
in the second  quarter,  primarily  in  connection  with costs  associated  with
product discontinuations of approximately $16 million and severance arrangements
of approximately  $5 million.  Cash  expenditures  related to these accruals are
estimated to be substantially  made as follows:  $13 million in 2000, $8 million
thereafter.

MERGER AND RELATED COSTS
During the three months ended June 30, 1999, the Company recorded charges of
$4.0 millions related to the acquisition of EDiX.  The charges were comprised
of transaction costs of $2.4 million, write-offs and adjustments for long-lived
assets, principally noncompatible computer equipment, of $1.4 million and other
merger related costs of $0.2 million, principally related to integration costs
incurred during the period and the termination of leases and other contractual
obligations.

OTHER (INCOME) EXPENSE, NET
Interest income was approximately $1.3 million during the second quarter of 2000
and 1999.  Interest expense decreased  approximately  $221,000 during the second
quarter  of 2000 as  compared  to the same  period in the prior  year due to the
payment of all outstanding debt of EDiX during the second quarter of 1999.

INCOME TAXES
Income taxes for the quarter ended June 30, 2000 were benefited at 38.0%. Income
taxes for the quarter  ended June 30, 1999 were benefited at 23.2%. The 1999 tax
benefit  is lower than the  expected  statutory  rate due to the  non-deductible
nature of certain merger costs related to the  acquisition  of EDiX  Corporation
during the second  quarter of 1999.  Excluding  the impact of the  write-off  of
goodwill that is non-deductible for income tax purposes, the Company anticipates
an  effective  tax rate of  approximately  38.0% for the  remainder  of the year
ending December 31, 2000. Net deferred tax assets of approximately $11.5 million
are expected to be realized principally by reducing future taxable income.

SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO SIX MONTHS ENDED JUNE 30, 1999

REVENUES
The Company's  total revenues  decreased to $156.3 million during the six months
ended June 30, 2000 compared to $160.9  million in the  corresponding  period in
1999,  a decrease  of $4.6  million  or  (2.9%).  Revenues  from  systems  sales
decreased to $42.7  million  during the six months ended June 30, 2000 (27.3% of
total  revenues)  compared to $60.6  million  (37.6% of total  revenues)  in the
corresponding  period in 1999,  a decrease  of $17.8  million or  (29.4%).  This
decrease  was  primarily  due to a decrease  in new sales and  installations  of
certain IDX systems.  Revenues from  maintenance  and service fees  increased to
$113.6  million  during  the six  months  ended  June 30,  2000  (72.7% of total
revenues)  from $100.3 million  (62.4% of total  revenues) in the  corresponding
period in 1999, an increase of $13.3 million or 12.2%.  The increase in revenues
from  maintenance and service fees was primarily due to increased  transcription
service fee revenue from EDiX.

During 1999 and the first six months of 2000, certain of the Company's customers
delayed  making  purchasing  decisions  with respect to certain of the Company's
software systems comprised of multiple products resulting in longer sales cycles
for such  systems.  Management  believes  such  delays  are due to a  number  of
factors,  including  customer  organizational  changes,   government  approvals,
pressures to reduce  expenses,  product  complexity,  competition,  and customer
preoccupation  with  internal  Year  2000  issues.  In June  2000,  the  Company
announced  that weakness in system sales  experienced  in the fourth  quarter of
1999 and the first half of 2000

                                  Page 14 of 30
<PAGE>

was expected to continue through the remainder of 2000. The Company expects that
the factors  described above and especially the healthcare  industry's Year 2000
focus will cause  reductions  or delays in spending for new systems and services
in the  second  half of 2000.  Accordingly,  the  Company  expects  that it will
experience  deferrals  and delays in sales of  software  and  related  services,
professional services, and hardware during the remainder of 2000.

COST OF SALES
The cost of sales and services increased to $115.8 million during the six months
ended June 30, 2000 from $105.1 million in the corresponding  period in 1999, an
increase of $10.7 million or 10.2%. The gross profit margin on systems sales and
services decreased to 25.9% during the six months ended June 30, 2000 from 34.7%
in the  corresponding  period in 1999.  The decrease in gross profit  margin was
primarily due to high fixed costs and overhead expenses in relation to decreased
revenue from  installations  of the Company's  software  systems which typically
include a greater percentage of higher margin software than of services.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling,  general and administrative  expenses decreased to $39.8 million during
the six months  ended  June 30,  2000 from  $41.2  million in the  corresponding
period in 1999, a decrease of $1.4 million or (3.24%).  As a percentage of total
revenues, selling, general and administrative expenses decreased to 25.5% during
the six months  ended June 30,  2000 from 25.6% in 1999.  The  decrease in total
selling,  general and  administrative  expenses during the six months ended June
30, 2000 was primarily due to decreased salary and benefit costs.

RESEARCH AND DEVELOPMENT
Research and  development  expenses  decreased to $25.3  million  during the six
months  ended June 30, 2000 from $27.2  million in the  corresponding  period in
1999,  a decrease of $1.8 million or (6.8%).  The  decrease is primarily  due to
costs of efforts to address Year 2000 issues as compared to the prior year. As a
percentage of total  revenues,  research and development  expenses  decreased to
16.2%  during the six months  ended June 30,  2000 from 16.9% for the six months
ended June 30, 1999.  The  decrease as a percentage  of sales for the six months
ended  June 30,  2000 as  compared  to the prior  year,  is  primarily  due to a
decrease in outside consulting expenses.

RESTRUCTURING CHARGE
On June  21,  2000 the  Company  announced  the  implementation  of a  workforce
restructuring  program.  The Company will halt development and discontinue sales
efforts on three product lines that have failed to achieve  business  targets or
have been deemed  non-strategic to the business going forward. In addition,  the
Company  implemented a work-force  reduction of approximately five percent.  The
program resulted in a one-time charge to earnings of  approximately  $21 million
in the second  quarter,  primarily  in  connection  with costs  associated  with
product discontinuations of approximately $16 million and severance arrangements
of approximately $5 million.

MERGER AND NONRECURRING CHARGE - MERGER AND RELATED COSTS
During the first six months 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 noncompatible computer equipment, of $1.4 million and other
merger related costs of $0.2 million,  principally  related to integration costs
incurred during the period and the  termination of leases and other  contractual
obligations.


                                  Page 15 of 30

<PAGE>

NONRECURRING CHARGE - WRITE-OFF OF GOODWILL
Channelhealth   Incorporated  has  determined  that  there  has  been  an  asset
impairment  related to  goodwill  acquired in the  purchase  of a  Massachusetts
corporation Channelhealth Inc. in April, 1999. In January 2000, the Company made
the  decision  to seek a  primary  provider  of  content  and  transactions  for
ChannelHealth, and decided to no longer utilize certain assets acquired with the
purchase of Channelhealth.  This asset impairment has been recognized during the
first quarter of 2000 and is reflected as a pre-tax  one-time loss on impairment
of assets of approximately $5.8 million.


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  in  connection  with  the  Company's  development  of a  healthcare
contract management system.

OTHER (INCOME) EXPENSE, NET
Interest  income  decreased to  approximately  $2.6 million during the first six
months of 2000 compared to $2.7 million for the same period in 1999. No interest
expense was  incurred  during the first two  quarters  of 2000  compared to $0.9
million  for the same period in the prior  year.  Interest  expense in the prior
year was primarily attributable to EDiX Corporation.

LOSS ON IMPAIRMENT OF INVESTMENT
Other  expense  included the  write-off of an  investment of $1.6 million in the
quarter ended March 31, 1999 due to the investee's inability to raise additional
equity and a decision to dissolve the business.

INCOME TAXES
Income taxes for the six months ended June 30, 2000 were benefited at 34.1%. The
tax  benefit in 2000 is lower than that  expected  based on the  statutory  rate
principally  due to the  non-deductible  nature  of the  write-off  of  goodwill
related to  ChannelHealth  in January of 2000.  Income  taxes for the six months
ended June 30, 1999 were benefited at 36.3%.  The 1999 tax benefit is lower than
the expected statutory rate due to the  non-deductible  nature of certain merger
related costs and the inclusion in the financial statements,  of the net loss of
EDiX Corporation, for which no tax benefit was recognized.  Excluding the impact
of the write-off of goodwill that is non-deductible for income tax purposes, the
Company  anticipates  an  effective  tax  rate of  approximately  38.0%  for the
remainder  of the year ending  December  31,  2000.  Net  deferred tax assets of
approximately $11.5 million are expected to be realized  principally by reducing
future taxable income.

LIQUIDITY AND CAPITAL RESOURCES
Cash flows  related to  operations  are  principally  comprised  of net loss and
depreciation  and are  primarily  affected  by the net  effect of the  change in
accounts receivable, accounts payable and accrued expenses. Due to the nature of
the  Company's  business,  accounts  receivable,  deferred  revenue and accounts
payable  fluctuate  considerably  due to, among other things,  the length of the
sales cycle and  installation  efforts which are dependent  upon the size of the
transaction,  the changing business plans of the customer,  the effectiveness of
customers'  management and general economic conditions.  During the three months
ended June 30, 2000 accounts receivable from customers were collected on average
within 106 days which is lower than the 1999 average of

                                  Page 16 of 30
<PAGE>

119 days.  The 1999  average  represented  an increase of 13 days from the prior
year in terms  of  average  days to  collect  receivables  from  customers.  The
increase is partially  attributable to unbilled receivables related to contracts
accounted for using long term contract accounting combined with a lengthening of
customer  payment  patterns.  In  connection  with its  workforce  restructuring
program the company has accrued  costs of $21 million as of June 30, 2000.  Cash
expenditures related to these accruals are estimated to be substantially made as
follows: $13 million in 2000, $8 million thereafter.

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

Cash flows from financing activities  historically relate to purchases of common
stock through the exercise of employee stock options and in connection  with the
employee  stock  purchase  plan.  During  1999,  all  outstanding  debt  of EDiX
Corporation was paid. Cash, cash  equivalents and short term investments at June
30, 2000 were $85.4  million,  an increase of $17.0  million  from  December 31,
1999.  The increase  was  primarily  due to the  issuance of preferred  stock of
Channelhealth Incorporated, a majority owned subsidiary incorporated in Delaware
to Pequot Private Equity for $30 million for an equity interest in Channelhealth
of  approximately  9%. The  Company has a revolving line of credit with a bank
allowing the Company to borrow up to $5.0 million bearing interest at the prime
rate that will expire on September 30, 2000.  There were no borrowings as of
June 30, 2000.

The Company expects that its requirements for office facilities and other office
equipment will grow as staffing  requirements  dictate.  The Company's operating
lease  commitments  consist  primarily  of  office  leasing  for  the  Company's
operating  facilities.  In April 2000, the Company  entered into a new operating
lease for office space in Seattle Washington  commencing in 2003 for a period of
12  years.  The  Company  plans  to  continue   increasing  the  number  of  its
professional  staff  during 2001 and future  periods to meet  anticipated  sales
volume and to support research and development  efforts. To the extent necessary
to support  increases  in  staffing,  the Company may obtain  additional  office
space.

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

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.

                                  Page 17 of 30
<PAGE>

YEAR 2000

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

FORWARD-LOOKING INFORMATION AND FACTORS AFFECTING FUTURE PERFORMANCE

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

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

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

o        delay in customers purchasing decisions due to a variety of factors
         such as consolidation, management changes and regulatory developments;
o        market prices of competitors;
o        announcements of technological innovations, including Internet delivery
         of information and use of application service
         provider technology;
o        new product introductions by IDX or its competitors;
o        market conditions particularly in the computer software and Internet
         industries; and
o        healthcare reform measures and healthcare regulation.

                                  Page 18 of 30
<PAGE>

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

THESE FLUCTUATIONS MAY AFFECT OPERATING RESULTS AS FOLLOWS:

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

ADVERSE FINANCIAL TRENDS INCLUDING DECLINING NET INCOME AND CASH FROM OPERATIONS
HAVE AND MAY CONTINUE.  Year over year net income and cash from  operations have
generally  declined  since  1998.  In 1999,  and the six months of 2000 IDX
generated  a  net  loss  of  approximately   $7.9  million  and  $32.5  million,
respectively.  If  these  negative  trends  continue,  IDX may  have  difficulty
financing  future growth and funding  operating  initiatives,  including  future
acquisitions.

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

o       delay in customers  purchasing  decisions  due to a variety of factors
        such as consolidation and management changes;
o       delay in customers' purchasing decisions due to customers'  year 2000
        problems;
o       the volume and timing of systems sales and  installations;
o       recognizing   revenue  at  various  points  during  the installation
        process;
o       the timing of new product and service introductions and product upgrade
        releases;  and
o       the sales and  implementation  cycles of IDX's customers.

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

IDX'S  PROPOSED  TRANSACTION  WITH  ALLSCRIPTS,  INC.  MAY NOT  HAPPEN OR MAY BE
UNSUCCESSFUL.  In the fourth  quarter of 2000,  IDX intends to close the sale of
the Physician Channel Business of its subsidiary, Channelhealth Incorporated, to
Allscripts,  Inc., a leading provider of point-of-care solutions for physicians,
while  retaining  the  E-commerce  Channel and Patient  Channel  Business.  As a
condition  to the sale,  IDX and  Allscripts  have agreed to implement a 10-year
strategic  alliance  agreement,  whereby  Allscripts  will become the  exclusive
provider of certain point-of-care clinical applications sold by IDX to physician
practices.   These   transactions  are  subject  to  regulatory  and  Allscripts
shareholder  approval,  which may not happen. Even if the required approvals are
given and the transaction is closed, IDX and Allscripts may not be successful in
implementing or realizing benefits from their strategic alliance.

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:

o       the generation of sufficient financing to fund potential  acquisitions
        and  alliances;
o       the  successful  identification  and acquisition of products,
        technologies or businesses;
o       effective integration and operation  of the  acquired  or aligned
        products,  technologies  or  businesses despite technical
        difficulties, geographic limitations and personnel issues; and
o       overcoming   significant   competition   for   acquisition and  alliance
        opportunities from companies that have significantly  greater financial
        and management resources.


                                  Page 19 of 30
<PAGE>

IDX MAY NOT BE SUCCESSFUL IN IMPLEMENTING ITS RESTRUCTURING PROGRAM.  IDX
intends to achieve greater efficiencies through the discontinuance of develop-
ment and sales activities of three product lines and a workforce reduction.  IDX
may not realize these efficiencies.  Factors taht may affect IDX's ability to
realize efficiencies include:

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

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

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

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

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

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

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

                                  Page 20 of 30
<PAGE>

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

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

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

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

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

The Federal  Anti-Kickback  Law,  among other  things,  prohibits  the direct or
indirect  payment or receipt of any  remuneration  for  Medicare,  Medicaid  and
certain  other  Federal  or  state  healthcare  program  patient  referrals,  or
arranging for or  recommending  referrals or other business paid for in whole or
in  part  by the  federal  health  care  programs.  Violations  of  the  Federal
Anti-Kickback

                                  Page 21 of 30
<PAGE>

Law may result in civil and  criminal  sanction  and  liability,  including  the
temporary  or  permanent  exclusion  of  the  violator  from  government  health
programs,  treble  damages  and  imprisonment  for up to  five  years  for  each
violation. If the activities of a customer of IDX or other entity with which IDX
has a business  relationship were found to constitute a violation of the Federal
Anti-Kickback  Law and IDX, as a result of the provision of products or services
to such customer or entity,  was found to have  knowingly  participated  in such
activities,  IDX could be  subject to  sanction  or  liability  under such laws,
including the exclusion of IDX from government  health programs.  As a result of
exclusion from government health programs,  IDX customers would not be permitted
to make any payments to IDX.

The  Federal  Civil  False  Claims  Act and the  Medicare/Medicaid  Civil  Money
Penalties  regulations  prohibit,  among other things,  the filing of claims for
services  that were not provided as claimed,  which were for services  that were
not medically necessary, or which were otherwise false or fraudulent. Violations
of these laws may result in civil damages,  including treble and civil penalties
up to $11,000 for each false claim filed. In addition the  Medicare/Medicaid and
other  Federal  statutes  provide for criminal  penalties for such false claims,
including  fines of up to  $25,000  and  imprisonment  up to five years for each
offense.  If, as a result of the provision by IDX of products or services to its
customers  or other  entities  with which IDX has a business  relationship,  IDX
provides  assistance with the provision of inaccurate  financial  reports to the
government under these  regulations,  or IDX is found to have knowingly recorded
or  reported  data  relating  to  inappropriate  payments  made to a  healthcare
provider, IDX could be subject to liability under these laws.

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

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

Although it is not possible to anticipate  the final form of  regulations  under
HIPAA,  IDX has made and  expects to  continue  to make  investments  in product
enhancements  to  support  customer  operations  that are  regulated  by  HIPAA.
Responding to HIPAA's impact may require IDX to make investments in new products
or charge  higher  prices.  It may be expensive  to implement  security or other
measures designed to comply with any new legislation or regulation.

The United States Food and Drug  Administration  has  promulgated a draft policy
for the regulation of computer  software  products as medical  devices under the
1976 Medical  Device  Amendments to the Federal Food,  Drug and Cosmetic Act. To
the extent that computer software is a medical device under the policy,  IDX, as
a manufacturer  of such products,  could be required,  depending on the product,
to:

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

                                  Page 22 of 30
<PAGE>

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

SYSTEM ERRORS IN IDX'S  HEALTHCARE  INFORMATION  SYSTEMS COULD CAUSE  UNFORESEEN
LIABILITIES.  IDX's  healthcare  information  systems are very complex.  As with
complex  systems offered by others,  IDX's  healthcare  information  systems may
contain errors,  especially when first introduced.  IDX's healthcare information
systems are intended to provide  information to healthcare  providers for use in
the diagnosis and treatment of patients.  Therefore, users of IDX's products may
have a greater  sensitivity  to  system  errors  than the  market  for  software
products generally. Failure of an IDX customer's system to perform in accordance
with its documentation  could constitute a breach of warranty and require IDX to
incur  additional   expense  in  order  to  make  the  system  comply  with  the
documentation.  If such failure is not timely  remedied,  it could  constitute a
material breach under a contract  allowing the client to cancel the contract and
subject IDX to liability.

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

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

                                  Page 23 of 30
<PAGE>

proprietary technology or to determine the validity and scope of the proprietary
rights of others.  This litigation,  whether  successful or unsuccessful,  could
result in substantial costs and diversion of management and technical resources.

IDX MAY HAVE  CONFLICTS OF  INTERESTS  WITH SOME OF ITS  EXECUTIVES.  Richard E.
Tarrant,  President,  Chief Executive Officer and Director, and Robert H. Hoehl,
Chairman of the Board of Directors,  indirectly own,  through various  entities,
real estate which IDX leases in connection with its operations. During 1999, IDX
paid an aggregate of approximately $2.1 million in connection with these leases.
IDX currently leases its headquarters  facilities in South  Burlington,  Vermont
from a real estate  entity owned by Richard E.  Tarrant and Robert H.  Hoehl.IDX
has commenced a $16 million construction project to expand its office facilities
at that location. In connection with these arrangements,  the economic interests
of these executives and directors and IDX may diverge.

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

CHANNELHEALTH'S  LIMITED  OPERATING  HISTORY MAY MAKE IT  DIFFICULT TO VALUE AND
EVALUATE ITS BUSINESS AND FUTURE PROSPECTS.  ChannelHealth  commenced operations
October  1999 and only  recently  commercially  released its first  product.  An
evaluation of the risks and  uncertainties of  ChannelHealth's  business will be
difficult    because   of    ChannelHealth's    limited    operating    history.
In addition, ChannelHealth's limited operating history means that it has less
insight into how technoloical and market trends may affect its business as
evidenced by the writeoff of goodwill of %5.8 million in the first year of 2000
due to a change in its content strategy.  The revenue and income potentional of
ChannelHealth's business and market are unproven, and its business model is
emerging and unproven.  ChannelHealth's business and prospects must be
considered in light of the risks and difficulties typically encountered by
businesses in their early stages of development, particularly those in new and
rapidly evolving markets such as the Internet healthcare information industry.

CHANNELHEALTH  HAS  INCURRED  SUBSTANTIAL  LOSSES TO DATE AND MAY NOT BE ABLE TO
ACHIEVE OR MAINTAIN  PROFITABILITY.  ChannelHealth  has incurred losses since it
began  operations.  ChannelHealth  incurred  a net loss of $12.5  million in the
first quarter of 2000 and a net loss of $5.5 million for the year ended December
31,  1999,  and its  accumulated  deficit  through  December  31,  1999 was $5.5
million.  ChannelHealth  cannot be certain if or when it will become profitable.
ChannelHealth's  failure to become profitable  within the timeframe  expected by
IDX  investors  or at all may  adversely  affect the market  price of IDX Common
Stock.  ChannelHealth  expects to continue to increase its expenses in an effort
to develop  its  business  and, as a result,  will need to generate  significant
revenue  to  achieve   profitability.   Even  if   ChannelHealth   does  achieve
profitability,  there can be no  assurance  that  ChannelHealth  can  sustain or
increase profitability on a quarterly or annual basis in the future.

                                  Page 24 of 30
<PAGE>

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

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

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

The adoption of Internet  solutions by healthcare  participants will require the
acceptance of a new way of conducting business and exchanging  information.  The
healthcare industry, in particular,  relies on legacy systems that may be unable
to benefit from ChannelHealth's  Internet healthcare  information  services.  To
maximize the benefits of ChannelHealth's services,  healthcare participants must
be  willing  to allow  sensitive  information  to be stored  in  ChannelHealth's
databases.  ChannelHealth can process  transactions for healthcare  participants
that maintain  information  on their own  proprietary  databases.  However,  the
benefits of ChannelHealth's  connectivity and sophisticated services are limited
under these circumstances.  Customers using legacy and client-server systems may
refuse  to adopt  new  systems  when they  have  made  extensive  investment  in
hardware, software and training for older systems.

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

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

                                  Page 25 of 30


<PAGE>

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

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

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

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

                                  Page 26 of 30
<PAGE>

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings


         On May 24, 2000, the Company and its subsidiary Channelhealth
         Incorporated filed a lawsuit  against  ProxyMed,  Inc., a supplier of
         electronic  data  interchange transactions, for breach of contract in
         the United States District Court for the District of Vermont. In its
         lawsuit, entitled IDX SYSTEMS CORPORATION, ET AL. V. PROXYMED,  INC.,
         Civil Action No.  2:00-CV-172,  the Company  seeks damages for
         breach of  contract  and  declaratory  judgment  that it the  contract
         has been terminated and the Company is free to contract with other
         suppliers for certain services.  Upon  notification  of the Company's
         lawsuit,  ProxyMed caused to be served on the  Company a lawsuit it had
         filed in the  Circuit  Court for Broward County,  Florida on March 10,
         2000. In its lawsuit,  ProxyMed  seeks damages for breach of three
         contracts.  ProxyMed's  lawsuit was removed by IDX to the United
         States  District Court for the Southern  District of Florida and is now
         entitled PROXYMED,  INC. V. IDX SYSTEMS CORPORATION,  Case No. 00-6886.
         The litigation is in the preliminary motion stage and discovery has not
         yet commenced.

         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.

     The Company held its 2000 Annual Meeting of  Shareholders  on May 15, 2000.
Of the  28,013,339  shares of common stock  outstanding  and entitled to vote at
this meeting,  25,836,705 shares were represented at this meeting,  in person or
by proxy. The following matter was voted upon at the Annual Meeting.

     1. Henry M. Tufo, M.D.,  Steven M. Lash and Peter W. Van Etten were elected
to serve for a term of three years as Class II Directors. The remaining terms of
Richard E. Tarrant,  Robert H. Hoehl, Frank T. Sample.  Stuart H. Altman,  Allen
Martin and Mark F. Wheeler  continued after the meeting.  The result of the vote
with respect of each nominee for office was as follows:

<TABLE>
<CAPTION>

                                      Votes "Against"                  Broker
Nominee                Votes "For"    or "Withheld"     Abstained      Non-Votes
<S>                    <C>            <C>               <C>            <C>

Henry M. Tufo, M.D.     25,781,174    0                 55,531         0
Steve M. Lash           25,783,024    0                 53,681         0
Peter W. Van Etten      25,783,445    0                 53,260         0
</TABLE>

                                 Page 27 of 30

<PAGE>

Item 5.  Other Information

         Shareholders Proposal for 2000 Annual Meeting

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

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

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

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

(b)  There were two Forms 8-K filed during the second quarter of 2000:

     On June 9, 2000, the Company filed a report on Form 8-K, reporting the
     IDX News Release dated June 8, 2000 concerning the agreements entered
     into among the Company, ChannelHealth Incorporated, a subsidiary of IDX,
     and Healtheon/WebMD Corporation defining strategic relationships.

     On June 23, 2000, the Company filed a report on Form 8-K, reporting the
     IDX News Release dated June 21, 2000 concerning preliminary second
     quarter results and the implementation of a cost reduction and workforce
     restructuring program.

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

                                  Page 28 of 30
<PAGE>

                                   SIGNATURES

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

                                     IDX SYSTEMS CORPORATION



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
































                                  Page 29 of 30
<PAGE>

                                  EXHIBIT INDEX

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

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

10              Stock Restriction and Voting Agreement by and
                among Richard E. Tarrant and Amy E. Tarrant
                effective April 29, 1999 and executed
                June 8, 2000

27              Financial Data Schedule











                                  Page 30 of 30