<PAGE>

                         UNITED STATES
              SECURITIES AND EXCHANGE COMMISSION
                    Washington, D.C.  20549

                           FORM 10-K


[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1999

                              OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
_______________ TO _________________

Commission file number: 0-28212

              SUNQUEST INFORMATION SYSTEMS, INC.
    (Exact name of registrant as specified in its charter)

PENNSYLVANIA                                  86-0378223
(State or other jurisdiction of               (I.R.S. Employer
Incorporation or Organization)                Identification Number)

                 4801 East Broadway Boulevard
                  Tucson, Arizona 85711-3609
      (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (520) 570-2000

  Securities registered pursuant to Section 12(b) of the Act:
                             None

  Securities registered pursuant to Section 12(g) of the Act:
                  Common Stock, no par value
                       (Title of class)

Indicate by check mark whether the registrant (1) 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), and (2) has been subject to such filing
requirements for the past 90 days.  [X] Yes  [ ]  No

<PAGE>

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

As of March 17, 2000, the registrant had 15,547,873 shares of
Common Stock outstanding. The aggregate market value of the
Common Stock held by nonaffiliates of the registrant, based on
the closing price of the Common Stock on March 17, 2000 as
reported by Nasdaq, was $42,089,396 (calculated by excluding
shares owned beneficially by directors, executive officers and
other affiliates as a group from total shares outstanding
solely for the purpose of this response).

              DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's Annual Report to Shareholders for
1999 are incorporated by reference into Parts II and IV of
this Form 10-K.

Portions of the registrant's Proxy Statement for the 2000
Annual Meeting of Shareholders are incorporated by reference
into Part III of this Form 10-K.

Except as specifically incorporated by reference herein, the
Annual Report to Shareholders for 1999 and the Proxy Statement
are not to be deemed filed as part of this Annual Report on
Form 10-K.

<PAGE>

              SUNQUEST INFORMATION SYSTEMS, INC.
                       Form 10-K - 1999
                       TABLE OF CONTENTS
                                                                Page
                                                                ----
PART I
  Item 1  - Business
    General                                                        1
    Industry                                                       1
    Products and Services                                          2
    Third-Party Marketing Arrangements                             9
    Products Under Development                                     9
    Year 2000 Compliance                                          11
    Client Services                                               11
    Balanced View Consulting                                      12
    Marketing                                                     12
    Technology                                                    12
    Research and Development                                      13
    Competition                                                   14
    Regulation                                                    14
    Proprietary Rights                                            16
    System Acquisition Agreements                                 17
    Backlog                                                       17
    Employees                                                     18
    Forward-Looking Statements                                    18
    Executive Officers of the Registrant                          24
  Item 2  - Properties                                            25
  Item 3  - Legal Proceedings                                     26
  Item 4  - Submission of Matters to a Vote of Security Holders   26
PART II
  Item 5  - Market for Registrant's Common Equity and Related
              Stockholder Matters                                 27
  Item 6  - Selected Financial Data                               27
  Item 7  - Management's Discussion and Analysis of Financial
              Condition and Results of Operations                 27
  Item 7A - Quantitative and Qualitative Disclosures about
              Market Risk                                         28
  Item 8  - Financial Statements and Supplementary Data           28
  Item 9  - Changes in and Disagreements with Accountants on
              Accounting and Financial Disclosure                 28
PART III
  Item 10 - Directors and Executive Officers of the Registrant    28
  Item 11 - Executive Compensation                                28
  Item 12 - Security Ownership of Certain Beneficial Owners
              and Management                                      28
  Item 13 - Certain Relationships and Related Transactions        29
PART IV
  Item 14 - Exhibits, Financial Statement Schedules, and
              Reports on Form 8-K                                 29
  Signatures                                                      32

                                   i
<PAGE>

                            Part I

Item 1.  Business.


General
-------

     Sunquest Information Systems, Inc. ("Sunquest" or the
"Company") provides health care information systems ("HCISs")
to large and mid-sized hospitals, clinics and other
facilities, including integrated delivery networks ("IDNs")
comprised of multi-entity, multi-site health care
organizations.  Sunquest was established in 1979 and has
become a market leader in the sale of laboratory information
systems ("LISs") that integrate disparate equipment and data
sources in order to automate a laboratory department's
specialized processes and manage its large volumes of clinical
data.  In 1991, the Company also began marketing the FlexiRad
product, a radiology information system.  Sunquest became a
public company on June 10, 1996, when it closed its initial
public offering of Common Stock.  With the purchase of Antrim
Corporation ("Antrim") on November 26, 1996, the Company
acquired a presence in the commercial and medical reference
laboratory market.  In August 1997, Sunquest purchased certain
inpatient pharmacy software systems, and in November 1997,
entered into a software license agreement for an outpatient
pharmacy system.  As of December 31, 1999, Sunquest had an
installed customer base of more than 1,200 sites, including
162 of the world's largest IDNs, in the United States, Canada,
United Kingdom, Mexico, Saudi Arabia, Ireland and Denmark.


Industry
--------

     In recent years, the health care industry has
experienced, and continues to experience significant changes.
Increases in health care costs have led the industry to move
from a fee-for-service model to alternative payment models.
This has resulted in a shift of financial risk from the payor
to the health care provider and has caused the industry to
focus on the cost-effectiveness of high quality care.  In
addition, the health care industry has been experiencing
consolidation among health care providers which has led to the
development of large IDNs.  These organizations have been
formed to manage the continuum of health care services for
population groups across both inpatient and outpatient
settings with the dual goals of improved quality of patient
care and reduced costs for patients and members.

     In order to achieve their dual goals, IDNs need detailed
clinical and management information systems that enable
providers within the IDN to manage such important processes
as: (i) patient care processes across multiple delivery sites;
(ii) the appropriateness of diagnoses, treatments and resource
utilizations; (iii) provider performance and clinical
outcomes; and (iv) commercial and medical reference laboratory
processing and business practices.  Significant market
opportunities exist for HCIS vendors offering open systems
architecture that allows interoperability with legacy systems
and solutions from other leading vendors.  These systems
permit IDNs to select and integrate information systems by
either retaining existing legacy systems or selecting from an
array of new systems. With rapid Internet adoption, the
opportunity also exists for expanded e-business solutions
including application service provider ("ASP") delivery
models.  Based on these opportunities,

                                   1
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Sunquest now offers six suites of health care information systems
and services in addition to its stand-alone product offerings.

     Sunquest markets its products and services
internationally through its direct sales force and marketing
relationships with other information systems vendors.


Products and Services
---------------------

     Sunquest's business strategy is to engineer its products
for the changing health care environment, now characterized by
the emergence of IDNs, an increasing trend to outpatient care
delivery, and rapid Internet adoption. These health care
organizations are also adopting the purchasing strategy used
by large manufacturing companies and are limiting the number
of vendors with whom they deal. In response, Sunquest has
adopted a "suite" strategy for sales, and has clustered its
products into logical groupings, which are required by these
delivery systems.

     With rapid Internet adoption, the opportunity also exists
for expanded e-business solutions including ASP delivery
models.  In an ASP model, clinical management applications and
data are processed centrally and distributed along with remote
expert services to customers through the Internet.  By
leveraging the Internet to reduce the cost of distribution and
support, ASP models are able to provide a solution that is
cost effective, thereby reducing customers' upfront
expenditures and the need for management information systems'
staff.  In response, Sunquest has a new suite of systems, the
e-Business suite.  The Internet delivery mechanism, currently
under development, is expected to be in general release during
the second quarter of 2000.

     Sunquest now offers six suites of health care information
systems and services in addition to its stand-alone product
offerings: (i) the departmental clinical suite with systems
that automate the operations of laboratories, radiology and
pharmacy departments within a clinical environment such as a
hospital; (ii) the integration and connectivity suite with
systems that allow Sunquest products to communicate with other
vendors' software and hardware products;  (iii) the commercial
and medical reference laboratory suite with systems that
automate the clinical, financial and information support
operations of commercial medical laboratories; (iv) customer
support and services; (v) the clinical data management suite
with systems that integrate clinical patient care data
directly to the caregiver or clinical department; and (vi) the
e-Business suite of Internet-based applications that include
laboratory and financial applications delivered using an ASP
model.

Departmental Clinical Systems

     Departmental systems for the laboratory were the first
products developed by Sunquest, and were followed by the
addition of radiology and pharmacy systems. This suite of
systems now automates the information needed to manage the
workflow and information needs of laboratory, radiology and
pharmacy departments in one or more facilities.  These systems
provide automation services specific to the needs of the
department and capture information for use by physicians and
other caregivers.  In addition to the departmental clinical
suite, each product comprising the suite is individually
available as a specific solution.

                                   2
<PAGE>

  Clinical Laboratory Information Systems

  Sunquest's FlexiLab system manages the workflow and
  reporting requirements of the chemistry, microbiology,
  hematology, anatomic pathology and outreach areas of the
  laboratory.  Quality assurance validations occur dynamically
  as results are entered.  For example, a clinician can define
  normal test result ranges by age, sex and test method.
  Later, if the results are out of range, Sunquest's FlexiLab
  system immediately informs the technologist of the
  validation failure.

     The Clinical Laboratory module is the core of the
     FlexiLab system and manages the processes of the high
     volume test areas of the laboratory.  This module
     includes volume and performance statistics, patient
     archiving, demographics, patient reporting including an
     online call back module to organize and track phone
     results, security and audit trails.  The Clinical
     Laboratory module features episodal management and
     outpatient tracking capabilities and is moving towards
     full Windows-based functionality and client server
     architecture.   Episodal management enables the entire on-
     line clinical patient record to be viewed at the
     laboratory level for clinical treatment analysis and
     financial and managed care cost analysis.  Outpatient
     tracking capabilities enable separate tracking of the
     patient and the specimen, improving the efficiency with
     which a provider can manage concurrent care processes.

     The Mulhos module utilizes the FlexiLab system to support
     multiple facilities. Each facility can have its own
     individualized reports, rules and options, which allow
     for differences among facilities.  The Mulhos module
     manages vital inter-institutional issues such as the
     security of patient information and conflicts between
     each facility's patient identification system.

     The Specimen Management, Routing and Tracking ("SMART")
     sub-system provides for container level identification
     numbers to increase tracking capabilities and provide
     clean interfaces to laboratory automation (robotics)
     systems.

     The Commercial Outreach module enables the hospital
     laboratory to expand beyond the traditional acute care
     needs of an IDN.  Automated results reporting to remote
     physician offices, rapid order entry, and customer
     service tools are among the features that support the
     commercial laboratory environment.  Other features
     include the ability to update client data and courier
     routes in order to improve the laboratory's ability to
     manage its operations.  Customized client reports assist
     the laboratory in designing its own patient reports.
     Reports are available at the patient and also the
     individual physician order level.

     The Microbiology module in the FlexiLab system provides a
     comprehensive, paperless environment that enhances the
     communication of microbiology and epidemiological
     results.  User definable, automated rules assist the
     microbiologist in measuring the effectiveness of
     medications on specific organisms in order to predict
     effects on a patient's outcome.

     The Blood Bank module automates a hospital's complete
     transfusion service, including inventory and distribution
     of blood products to the patient.  This module, which
     uses rules-based logic, is designed to prevent the
     distribution of inappropriate

                                   3
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     blood products.  For example, the Blood Bank module automatically
     provides notice if the blood product has not been appropriately
     matched to the patient at the time of issue.  The donor
     module, which is an available option with the Blood Bank
     module, automates the collection procedures and
     management of blood product inventories.  It also manages
     and tracks blood donated by patients for their own use
     and provides quality controls to assure compliance with
     rules of good practice.

     The LabAccess Results Workstation module provides easily
     accessible and comprehensive on-line processing of data
     through defined specimen viewing configurations that are
     supported by color-coded Quality Assurance ("QA") result
     failures and Quality Control ("QC") specimen groupings.
     Specimens may be displayed in a spreadsheet format, with
     failures indicated through color changes in the displayed
     results, or individually.  Individual specimens or
     batches of specimen tests results may be released to the
     patient file at any time.  On-line results entry and
     assessment allow data to be viewed for either a single
     analyzer or for multiple analyzers that run similar or
     dissimilar tests.  A user-defined, auto-verification
     process tags normal results for release and suspect
     results for closer review.

     Requisition Based Reports ("RBR") is an application
     within the Commercial Outreach module that provides
     patient test results reports grouped by requisition
     number which can be associated with multiple accession
     numbers.  RBR enables physicians and other medical staff
     to view all results for a single requisition number in a
     single report.  One of the main advantages of the RBR
     application is that reports can be delivered
     electronically to clients' printers or fax machines.  RBR
     also offers the ability to provide clients with
     preprinted multi-part requisition forms that include
     clients' names, addresses and other client-specific
     information.

     The Flexi-3R module provides redundancy and high systems
     availability within the LIS.  The Flexi-3R module
     provides a secondary database that allows high volume
     printing of management and patient reports.  Queries can
     be made into this database without affecting the response
     time of the primary database.

     Pursuant to a value added remarketer ("VAR") agreement
     with Dynamic Healthcare Technologies, Inc. ("Dynamic"),
     Sunquest is marketing and selling Dynamic's anatomic
     pathology product, CoPathPlus ("CoPath").  CoPath is
     interfaced and integrated with the FlexiLab system.
     CoPath provides a comprehensive display of patient and
     specimen information via a graphical user interface.
     Health care providers are able to tailor report formats,
     screen layouts and incorporate images for a clear picture
     of diagnostic findings.  An integrated report writer
     allows the user to create their own ad hoc reports or
     select from the management report options built into the
     system.  CoPath provides fast turnaround, including
     automatic faxing capabilities.  See Item 3 herein as to
     legal action brought by Dynamic against the Company
     involving the CoPath product.


  Radiology Information Systems

  Sunquest's FlexiRad system is designed to streamline the
  operations of the radiology department and facilitate
  orders, intelligent scheduling of  both patients and
  resources, fee

                                   4
<PAGE>

  billing, patient tracking, film management and reporting.  Using
  client server architecture and a graphical user interface, the FlexiRad
  product is easy to use, reducing training time on the system.

  The FlexiRad system offers a full suite of interfaces:
  admissions, discharge and transfer ("ADT"), orders, results
  reporting and billing.  Additional interfaces unique to a
  radiology department and offered by the FlexiRad system
  include interfaces to digital dictation systems
  (DictaPhone), speech recognition systems (IBM MedSpeak) and
  top-of-the-line mammography products (MRS).  These
  interfaces provide more information to the FlexiRad system
  and further reduce the turnaround time of patient reporting.

  All information collected by the FlexiRad system can be
  viewed by using the relational ad hoc report writer.  This
  tool allows the user to customize reports.  In addition, off-
  the-shelf software, such as Microsoft Access or Seagate
  Crystal Reports, can be used to write customized reports.

  Further integration is provided directly with the FlexiLab
  system.  When an exam is being ordered, the radiology user
  can view related laboratory results on that patient, helping
  the health care provider determine the appropriateness of
  the order.  On the results side, radiology patient reports
  can be correlated with anatomic pathology reports, providing
  useful information on necessity for biopsy recommendations.

  The Company markets and sells the AMICAS, Inc. ("AMICAS")
  Web/Intranet Image Server software pursuant to a Marketing
  Reseller agreement.  The AMICAS software makes full-quality
  radiology studies available to physician desktops throughout
  the enterprise.  Primary image viewing is enabled through
  non-proprietary Web browsers such as Netscape or Microsoft
  Internet Explorer.  The AMICAS software is integrated with
  the FlexiRad Web-based radiologist work station allowing the
  radiologist to correlate both textual result data and image
  data when rendering patient diagnosis and subsequent
  treatment plans.


  Pharmacy Information Systems

  The FlexiMed system is a patient focused, integrated
  pharmacy information system using state-of-the-art client
  server technology.  This system provides reporting of
  medication use across the entire continuum of care and puts
  the pharmacy in control of drug therapy and documents each
  step of the medication management process.  In addition, it
  addresses two of the most pressing needs in today's health
  care environment: medication therapy outcomes and pharmacy
  cost control.

  Some key features of the FlexiMed system include medication
  profiling, order entry and management, clinical consulting
  and documentation, dispensing and inventory control, high
  volume drug prescription and ad hoc reporting capability.

  The acute care functionality has several operational
  options: traditional cart exchange, "just-in-time" envelope
  fill, automated drug distribution machines, or a hybrid
  combination of these.

                                   5
<PAGE>

  The FlexiMed system incorporates standard clinical alerts
  such as drug interaction and allergy alerts, and its
  configurable medication management allows the pharmacist the
  necessary time to evaluate and act on this advanced clinical
  information.


  Sunquest Financial System

     The Sunquest Financial system provides the tools needed
     to manage the laboratory business and includes: Accounts
     Receivable/Billing, General Ledger, Accounts Payable,
     Materials Management and Electronic Claims/EDI.

     The  Accounts Receivable/Billing product provides
     features that allow efficient billing and collections
     processing of laboratory services. These features include
     front-end validations, full inquiry, cash receipts entry,
     one step adjustment processing and comprehensive
     reporting.  The system also has tools that can assist the
     laboratory in meeting regulatory compliance requirements
     of local carriers. This product can be sold as an option
     for the FlexiLab and Commercial Laboratory systems, as
     well as the laboratory information systems of other
     companies.

     The General Ledger application is the core product of the
     Sunquest Financial system. The system is designed to
     provide complete management of financial information and
     is fully integrated with all components of the Sunquest
     Financial system.

     The  Accounts Payable product provides tools to
     efficiently manage the expenditures of the laboratory.
     The system evaluates commitments, prints and reconciles
     checks, and produces comprehensive vendor related
     management reports.

     The Materials Management product manages a laboratory's
     supplies inventory. Features include the capability to
     order, receive, issue, transfer and report all activity
     within multiple locations and/or multiple inventory
     environments.  The system also allows retail sales of
     supplies to laboratory clients, with this activity
     automatically transferring to the Accounts
     Receivable/Billing product.

     The Electronic Claims/EDI services provide the
     capabilities to electronically transmit and
     electronically receive payment and rejection activity.
     These capabilities are available for Medicare, Medicaid,
     Blue Shield and prominent clearinghouses such as NEIC,
     CYDATA and IMS.


Integration and Connectivity

     Sunquest estimates that it has installed in its LIS
client base over 12,500 interfaces that were developed for
nearly 950 separate instruments and 1,000 HCISs of other
vendors.  This interface library allows the Company to
seamlessly integrate virtually any lab instrument or HCIS into
Sunquest's LIS, radiology information system or pharmacy
information system.  The Company uses a variety of
configuration options to support multiple hospitals and IDNs.

                                   6
<PAGE>

  Instrument Interfaces facilitate the linking of clinical
  laboratory instruments, utilizing the full communication
  capability of each instrument.

  Application Interfaces facilitate the linking of third-party
  application systems, such as hospital information and
  financial systems of other vendors, to Sunquest's
  departmental clinical systems.  Sunquest's proven ability to
  handle the complexities of interacting information systems
  provides customers with more flexible configuration options.


Commercial and Medical Reference Laboratory Systems

     Sunquest also offers laboratory information systems for
the commercial laboratory marketplace. Sunquest Commercial
systems provide a total solution for customers ranging from
small hospital outreach programs to large commercial reference
laboratories.

     The Commercial Laboratory product suite is an efficient,
     performance-oriented management system that streamlines
     daily operations and increases customer efficiency.
     Client specific features such as reporting conventions,
     call parameters and management and statistical reporting
     tools give customers a competitive edge in an aggressive
     marketplace.  Customer service features including
     stat/call lists, courier tracking, client problem
     tracking and streamlined inquiry options provide
     convenient access to information that is needed to serve
     a dynamic client base.

     The system offers quick and simple requisition entry
     allowing orders to be placed more efficiently.  Bar-
     coding maximizes workflow and can be used in conjunction
     with instrument interfaces.  Batching is also available
     to facilitate high volume processing.

     Additionally, patient reports may be faxed, printed on-
     site or printed remotely.  Automatic report scheduling
     with client specific features provides for prompt and
     accurate reporting.

     The Paperless Microbiology product is fully integrated
     with the Commercial Laboratory product and features user-
     defined workcards on which daily culture observations and
     activity can be recorded.  Instrument interfaces and bar-
     coded plate labels are also available to increase
     efficiency.  Epidemiology and management reports provide
     detail and summary information to be used in statistical
     evaluation of the department's activities.

     The Anatomic Pathology product is available for
     commercial laboratories providing pathology and cytology
     service.  The product uses the same flexible ordering,
     reporting, and customer service features that
     distinguishes Sunquest's other commercial products.  The
     system compiles and compares required elements of test
     data, facilitating regulatory compliance.  Efficient
     storage of historical data makes it possible to link
     large volumes of patient history records with current
     data for quick retrieval.

     Cytology features include batching capabilities,
     streamlined results entry screens, and comprehensive
     statistical reporting.  Pathology supports Systematized
     Nomenclature

                                   7
<PAGE>

     of Medicine ("SNOMED") coding, with accompanying management reports
     for data analysis.  QA reporting is also available to correlate
     results and document any discrepancies detected.


Customer Support and Services

     Sunquest provides clients with the most comprehensive
services available in the health care information industry.
These services include implementation, account management and
education, product and technical support, as well as
consulting and other services provided by Balanced View
Consulting, the consulting division of Sunquest.

     Balanced View Consulting offers expert advice to health
care providers focused on application and integration of
Sunquest products.  Balanced View Consulting provides services
to improve laboratory efficiency, implement new features,
establish outreach functionality and streamline workflow.
These services include project and systems management, on-site
training, outreach and custom-designed programs, system
upgrade and interface implementation, network assessment and
consolidation planning.


Clinical Data Management

     Sunquest's Clinical Data Management products are designed
to provide integrated clinical patient care data directly to
the caregiver or clinical department either by combining
Sunquest's suite of ancillary systems or through integration
with disparate systems.

  The Clinical Event Manager system monitors patient specific
  data within a network and immediately alerts health care
  providers to significant patient information based on
  predetermined rules. Providers simply identify the clinical
  rules of interest and the Clinical Event Manager module
  notifies them via pager or e-mail of any event triggered by
  the rules.  Additionally, the system can check for reminders
  placed by the health care provider to order tests at
  specific intervals.  The system can also check for
  interdisciplinary events for a given patient such as changes
  in vital signs versus administration of a particular drug.

  Integration Server In March 1995, the Company entered into a
  VAR agreement with Century Analysis, Inc. ("CAI") which
  grants Sunquest a non-exclusive license to sublease and
  market CAI's Transaction Distribution Manager ("TDM")
  product.  The agreement was subsequently assigned to New Era
  of Networks, Inc. ("NEON"), successor in interest to CAI.
  TDM greatly simplifies the task of performing inter-
  application data interchange and performs a number of
  functions including transaction store and forward with built-
  in fault recovery and management tools to control all data
  interchange processing.


e-Business

     Sunquest's e-Suite applications are designed to leverage
the Internet to reduce the cost of distribution and support.
Although the applications are fully developed, the Internet

                                   8
<PAGE>

delivery mechanism is currently under development.  The e-
Suite applications, which consist of e-Commercial Lab, e-
Financial and e-Hospital Lab, are ASP models that meet a well-
defined market need that could provide Sunquest with an
extended domestic market of more than 3,500 hospitals with
less than 250 beds and the more than 3,500 small commercial
laboratories.  The e-Commercial Lab and e-Financial systems
are live in three Beta sites and are expected to be in general
release during the second quarter of 2000.  In addition, the
Company plans to deliver to Beta the e-Hospital Lab system
during the second quarter of 2000.

  Remote Web Access for Internet-based Lab Ordering and
  Results In December 1999, the Company entered into a VAR
  agreement with Axolotl Corporation ("Axolotl") which enables
  Sunquest to remarket, co-brand, implement and support
  Axolotl's Elysium Access and Elysium Ordering products to
  provide a comprehensive set of Web-based laboratory results
  delivery and laboratory ordering capabilities with its
  FlexiLab system.  This agreement combines the Internet, e-
  mail and powerful automation tools to link physicians,
  clinics and hospitals for fast, convenient access to
  clinical information in the FlexiLab system.  Physicians and
  clinicians can perform traditional laboratory functions of
  accessing test results, place orders, print specimen labels,
  process authorizations, deliver discharge summaries and more
  using common browser software over a secure Internet and
  intranet connections.


Third-Party Marketing Arrangements
----------------------------------

     Sunquest believes that there are advantages to open
system solutions that facilitate the interoperation of
products from other vendors.  Consequently, the Company has
entered into several VAR agreements, joint marketing
agreements and licensing agreements with other vendors.

     In addition to the third-party agreements previously
noted in this report, hardware and resold software are
purchased from third-party vendors under VAR agreements and
sold to customers in conjunction with the Company's software
products.  Hardware support is the responsibility of the
hardware manufacturers under agreements negotiated directly
between the supplier and the customer or agreements where
Sunquest acts as an intermediary in negotiating the support
agreement.


Products Under Development
--------------------------

     The following products and the ASP Internet delivery mechanism
for the e-Suite products are under development utilizing either the
same client-server architecture as the Company's existing systems or
Web-based technology.  The development of new products is an uncertain
process.  There can be no assurance that the following
products will be successfully developed or, if developed that
they will be accepted in the marketplace.  See "Other Factors"
below.

FlexiMed-Outpatient (Departmental Clinical Suite) The FlexiMed
system has two major systems components: an inpatient system
and an outpatient system.  The inpatient system is used in
hospitals and is a proven product installed at two major
hospital systems.  The

                                 9
<PAGE>

outpatient system deals with retail pharmacy functionality and is
currently under development.

Outpatient functionality will provide the user with high
volume prescription processing and will be automated with bar-
code checking.  The advanced multi-site capability will
support on-line, third-party claims adjudication with billing
algorithms and financial processing that will be configurable
for site-specific variations.

Clinical Suite Integration (Departmental Clinical Suite) The
Clinical Suite Integration will integrate the three primary
Sunquest suite products, FlexiLab, FlexiRad and FlexiMed.
Under development is a Web-based common viewing system.  This
system will allow users the ability to seamlessly view
clinical data from one Web-based viewer.

e-Commercial Lab (e-Business Suite) is a feature-rich
laboratory information system specially designed to facilitate
high-volume work flows in a commercial laboratory environment.
Its flexible configuration allows commercial laboratories to
do personalized physician reporting, a must for laboratories
wishing to improve their customer service abilities.  This
application provides advanced internal logic to track
diagnoses, Advanced Beneficiary Notices ("ABNs"), verification
letters and the access control feature creates a comprehensive
audit trail and a secure environment in order to ease
regulatory compliance.

e-Financial (e-Business Suite) is a comprehensive financial
management system for laboratories that incorporates accounts
receivable, billing and general ledger functions into one
simple, easy-to-configure application.  e-Financial is invoice-
driven, not patient-driven, in order to accelerate cash flow,
making this an ideal application for hospital laboratories
with outreach programs, as well as for traditional commercial
laboratories.  Support for multiple payor types, management
reporting abilities and contract management features allow
laboratories to conduct business with maximum flexibility.  In
addition, e-financial takes an aggressive stance toward Health
Insurance Portability and Accountability Act ("HIPAA")
compliance, ensuring that the most sophisticated tools are
available to respond to HIPAA.

e-Hospital Lab (e-Business Suite) is a feature-rich laboratory
information system that is designed to penetrate the small to
intermediate sized hospital market with the target market
being 250 beds or less.  In addition to the same features as
the e-Commercial Lab application, e-Hospital Lab provides full
hospital laboratory capabilities as well as allowing several
hospitals to operate in the same environment even across
multiple time zones.

Clinical Data Mart (Clinical Data Management Suite) will serve
as a management tool to retrieve data from multiple databases
and their interfaces.  The Clinical Data Mart will provide a
dynamic means to access data faster, generate impromptu
reports quicker, combine data from disparate databases and
will provide longer term data storage for trend analysis.  The
Clinical Data Mart will be a valuable tool for today's
informed decision maker, leveraging Web browser interfaces and
e-mail reporting throughout the organization.

                                 10
<PAGE>

Year 2000 Compliance
--------------------

     In prior years, the Company discussed the nature and
progress of its plans to become Year 2000 ready.  In late
1999, the Company completed the remediation and testing of its
products, internal systems and the products and services of
third parties.  As a result of the Company's planning and
implementation efforts, the Company experienced no significant
disruptions in mission critical information technology and non-
information technology systems and believes that all systems
successfully responded to the Year 2000 date change.  The
Company is unaware of any material problems resulting from
Year 2000 issues with its products, its internal systems, or
the products and services of third parties.  The Company will
continue to monitor its mission critical computer applications
and those of its suppliers and vendors throughout 2000 to
ensure that any latent Year 2000 matters that may arise are
addressed promptly.


Client Services
---------------

     At December 31, 1999, the Company's client services
division employed approximately 491 professionals.  Sunquest
Client Services provides clients with a wide array of services
including implementation, account management and education
services, as well as product and technical support.  Client
Services employs skilled professionals with a strong focus on
clinical skills and technical expertise.  Client Services'
employees attend rigorous training including, where required,
a formal six-month initial training program to comply with the
Company's certification requirements which are designed to
ensure the highest degree of competence.

     Sunquest utilizes a variety of traditional and innovative
methods to provide educational services to its clients.  In
addition to a standard "Train the Trainer" approach, PC and
Web-based educational services have contributed significantly
to this effort in 1999.  Regional seminars to ensure client
competency have been widely attended in 1999 as part of an on-
going effort to provide post-live educational opportunities
for Sunquest clients.  During our annual client user group
meeting, clients are offered workshops and lectures in a
variety of topics ranging from technical to management
training.

     Areas of specialty have been developed within the Client
Services organization to support the deep level of
functionality in the Company's products.  Client Services has
specific teams dedicated to the following areas:
instrumentation, application interfacing, devices,
microbiology, anatomical pathology, blood bank, operating
systems, as well as a Crises Team designed to provide rapid
and dedicated response in the event of a major system outage.
All support services are staffed 24 hours per day, 7 days per
week and are managed through a Help Desk "triaging" service
located in Tucson, Arizona.  Services are delivered via
conventional methodologies as well as through new technology.
Many services are provided via the Internet and other advanced
technologies.  The Company utilizes outside consulting
services as well as internally conducted surveys to constantly
assess client satisfaction and the quality of services
provided.

     Every client is assigned a dedicated Client Advocate who
provides a single, long-term point of contact for each client.
The Client Advocate conducts regularly scheduled meetings

                                  11
<PAGE>

with each client to ensure that all expectations are being met, and
focuses on proactive site management to assist clients with
their business needs.


Balanced View Consulting
------------------------

     Balanced View Consulting is a division of Sunquest that
performs consulting and other services, primarily to the
Company's installed base.  The services range from training in
the improved use of Sunquest's products to total reengineering
projects.  In addition, Balanced View Consulting provides
clients with application interface testing in the areas of
ADT, OE, Results Reporting, Billing and Referenced Laboratory.
Balanced View Consulting can also provide System Managers on a
monthly or yearly basis, implementation assistance and
specific project work on an hourly-fee basis.

     Balanced View Consulting remains committed to proving
high quality "client-side" services to our installed client
base as well as new site implementations.  We are continuing
our expansion into the management consulting area,
specifically HIPPA and best practices for billing and clinical
laboratory services reimbursement.


Marketing
---------

     The primary markets for the Company's systems and
services are the approximately 3,500 acute care hospitals in
the United States and Canada that have more than 250 beds and
the approximately 500 premier commercial and medical reference
laboratories in the United States.  In addition to these
markets, the Company, through its e-Business initiatives, will
be targeting the more than 3,500 domestic hospitals with less
than 250 beds and the approximately 3,500 small commercial and
medical reference laboratories markets.  The Company also
markets its systems and services to the approximately 600
hospitals in the United Kingdom, Ireland and Scandinavia that
have more than 200 beds.  Sunquest's principal sources of
referrals are its clients and consultants.  Sunquest also
seeks to enhance its market recognition through participation
in industry seminars and trade shows, Company-sponsored
seminars, the Sunquest User Group and Regional User Group
meetings in the United States and the United Kingdom, direct
mail campaigns, telemarketing and advertisements in trade
journals.

     The Company's marketing department is composed of a team
of specialists in product management, marketing operations,
marketing communications and sales support.  Its sales force
is organized into two divisions: (i) North American which is
divided into four areas, Western, Midwestern, Southern and
Northeastern, offering all of the Company's clinical products
and (ii) European Sales, offering the Company's systems in the
United Kingdom and Europe.  At December 31, 1999, the Company
employed a sales and marketing force of approximately 110
individuals.


Technology
----------

     Sunquest's clinical products operate on IBM's RS6000
servers using the AIX operating system and Compaq's Alpha
servers using Tru64 UNIX or OpenVMS operating

                                  12
<PAGE>

systems.  Users access the Company's applications using IBM
compatible PCs and/or terminals.  The FlexiLab, FlexiRad and
Sunquest Financial products are offered on both IBM and Compaq
platforms.  The FlexiMed product is offered on the IBM RS6000
platform only.  The Company's commercial and medical reference
laboratory systems are offered on both IBM and Compaq
platforms.  Ancillary modules of the FlexiLab product operate
on Intel platforms using Microsoft Windows NT operating
system.

     The Company utilizes a multi-tiered approach for its
development efforts.  Microsoft InterDev is used for Internet
presentation development.  Microsoft Visual C++ and Visual
Basic are used for graphical presentation.  Visual C++ and the
M computer language (also known as "MUMPS" or "Massachusetts
General Hospital Utility Multi-Programming System") are used
in the development of its laboratory and radiology clinical
systems business objects.  The laboratory and radiology system
use InterSystem's M/SQL or Cache for data storage.
Microsoft's SQL-Server database is also used for newer
ancillary modules.   FlexiRad is a completely client-server
system while the FlexiLab system uses both client-server and
monolithic based modules.  These monolithic based modules
represent a limited set of functionality written entirely in
the M language.  FlexiMed, the Company's pharmacy product, is
developed using Powerbuilder fourth generation language on an
Oracle database.  All of the products use or are migrating to
utilize Microsoft's Windows 95/98/NT for the client operating
system.  The Company's commercial and medical reference
laboratory systems have been developed in the M language.

     Sunquest is migrating its laboratory and radiology
clinical systems to new technology by developing the object-
oriented middle tiers with graphical and Web-based
presentation layers while continuing to utilize hierarchical
and relational data structures (all residing on the server)
which can be deployed incrementally, depending on the state of
product evolution.  Although the Company does not believe that
such migration is currently necessary to satisfy its clients'
needs, the Company expects to transition over time all of its
systems and modules to object orientation.

     Sunquest resells third-party terminals, label and page
printers, storage devices and other peripheral devices.  The
Company also provides services to configure computer systems
and networks.  The Company has one-year renewable reseller
agreements with DEC and IBM and a variety of reseller
agreements with other middleware and device vendors.


Research and Development
------------------------

     The Company believes that the continuing rapid evolution
of the clinical information systems market has made a
substantial and sustained commitment to product development
essential to the long-term success of its business.  The
Company has a defined product development process
characterized by its phased product development lifecycle
discipline and release management methodology.  This process
includes on-going analysis of the marketplace, determination
of users' requirements, prototypical engineering and user and
usability feedback, detailed design specifications, and
regression and beta testing to ensure that new systems meet
clients' needs.

     Sunquest's product development managers are responsible
for product architecture, improvements to existing products,
construction verification and inspection.  The Company's

                                  13
<PAGE>

product development engineers are assigned to one of three
distinct functional groups: (i) the product engineering group,
which is responsible for the ongoing evolution of the
Company's existing products to meet the changing demands of
the market; (ii) the service engineering group, which
prioritizes corrections and improvements to deployed systems;
and (iii) the technology group, which researches industry-
standard components and develops new technologies for
integration into the Company's current and future products.
As of December 31, 1999, approximately 199 product development
engineers were assigned to improving and extending the
Company's existing systems and approximately 30 engineers were
assigned to the development of products in new product areas.

     In 1999, 1998 and 1997, the Company's research and
development expenses before capitalization of software
development costs totaled approximately $19.1 million, $18.5
million and $16.9 million, respectively.  See "Other Factors"
below.


Competition
-----------

     The markets for HCISs, including the markets for the
Company's information systems, are highly competitive.  Most
of the Company's revenues are derived from lengthy,
competitive procurement processes managed by sophisticated
purchasers that extensively investigate and compare the
products offered by the Company and its competitors.  The
Company believes that the principal competitive factors
influencing the market for its HCISs include vendor and
product reputation, quality of client support, product
architecture, functionality and features, ease of use,
rapidity of implementation, product performance and price.

     The Company's principal competitors are divided into two
categories: Hospital Information Systems ("HIS") vendors and
stand-alone Clinical Information Systems ("CIS") vendors.  The
Company's HIS competitive vendors are: McKesson HBOC, Inc.,
Medical Information Technology, Inc., Shared Medical Systems
Corp. and IDX Systems Corp.  The primary CIS competitors are:
Cerner Corporation, Mediware Information Systems, Inc., ADAC
Healthcare Information Systems, Inc., Soft Computer
Consultants, Inc. and Triple G Corporation.  In addition, the
Company competes with a large number of other information
system vendors.  See "Other Factors" below.


Regulation
----------

     The United States Food and Drug Administration (the
"FDA") is authorized to regulate medical "devices" under the
Federal Food, Drug, and Cosmetic Act, as amended (the "Act").
The FDA has interpreted the term "device" to include software
intended for use in the diagnosis, cure, mitigation,
treatment, or prevention of disease.  A software product that
meets this definition is subject to the Act's regulatory
requirements applicable to devices, unless the software
product is exempted from one or more of those requirements.
The FDA's interpretation is that hospital information systems,
laboratory information management systems, expert medical
decision software systems, and blood bank information
management systems are medical devices.  Software products
intended only for general accounting, communications, or
education are not subject to regulation as devices.

                                  14
<PAGE>

     Under an FDA draft policy for the regulation of computer
products, dated November 13, 1989, health information
management products that have not been classified by the FDA
are deemed medical devices but are exempt from active
regulation by the FDA if they involve competent human
intervention before any impact on human health occurs (e.g.,
clinical judgment and experience can be used to check and
interpret a system's data output).  Active regulation would
include establishment registration, device listing, premarket
notification or premarket approval, good manufacturing
practices ("GMP"), and postmarket reporting.  The FDA includes
in the category of software products that are exempt from
active regulation hospital information systems and pharmacy
ordering systems.  The FDA has suggested that laboratory
information systems may be considered Class I devices under 21
C.F.R. 862.2100, which are exempted by that regulation from
premarket notification under section 510(k) of the Act but are
not exempt from other device regulatory requirements, such as
GMP and reporting.

     In March 1994, the FDA notified blood bank software
manufacturers that blood bank software products would be
subject to active device regulation, including premarket
notification or premarket approval.  Manufacturers were
notified to submit a premarket notification by March 31, 1995,
although this deadline was later extended to March 31, 1996.
Accordingly, the Company submitted a 510(k) notification to
the FDA on March 27, 1996 with respect to its Blood Bank
software.  Following periodic discussions between the FDA and
the Company, on December 28, 1998, the FDA notified the
Company that the 510(k) notification was incomplete, the Blood
Bank product was deemed not substantially equivalent to a
predicate device, and a premarket approval application ("PMA")
would be required unless additional information was submitted
in a new, revised 510(k) notification for the Blood Bank
product.  The Company submitted a new 510(k) notification on
January 29, 1999.  On August 16, 1999, the Company received
510(k) clearance for the FlexiLab Blood Bank and Blood Donor
System version 5.2 on both the IBM AIX and the Compaq (DEC)
UNIX platforms.  On November 17, 1999, the Company also
received 510(k) clearance for the FlexiLab Blood Bank and
Blood Donor System on the Compaq Alpha Open VMS platform.  The
Company's ability to sell, promote, and install the FlexiLab
Blood Bank and Blood Donor System version 5.2 on other
platforms is contingent upon receiving the FDA clearance of a
510(k) notification.  In addition, the marketing of versions
of the FlexiLab Blood Bank and Blood Donor System other than
version 5.2 may require FDA clearance of a 510(k)
notification.  Compliance with the premarket notification and
other device regulatory requirements could be costly and could
delay or prelude the introduction of certain new products.

     Based on the FDA's December 1998 letter, sales,
promotion, and new installations of the Company's Blood Bank
product were suspended, although the Company was permitted to
continue to support and service its existing Blood Bank
product customers.  On March 23, 1999, the FDA notified the
Company that it could resume installation of the Blood Bank
product for customers with currently signed contracts and
customers with installations in progress.  Upon FDA
clearance of the 510(k) notifications in August and November
1999, the Company was permitted to resume marketing and
distribution of the FlexiLab Blood Bank and Blood Donor System
version 5.2 on the IBM AIX and Compaq (DEC) UNIX platforms and
the Alpha Open VMS platform, respectively.  The marketing
restrictions remain in effect with respect to the FlexiLab
Blood Bank and Blood Donor System on other platforms.  The
Company has determined that the remaining marketing
restrictions on the Blood Bank System will have an
insignificant, if any, effect on the Company's business.

                                  15
<PAGE>

     In August and October 1998, the Company effected two
corrections in its Blood Bank software which were reported to
the FDA under regulations requiring notice of corrections and
removals of medical devices (21 C.F.R. Part 806).  The FDA
classified these corrections as Class II voluntary recalls (21
C.F.R. Part 7).  Implementation of the corrections at customer
sites has been completed.

     Under FDA medical device reporting ("MDR") regulations,
manufacturers are required to report to the FDA device-related
deaths, serious injuries, and any malfunction which could
result in death or serious injury if it were to recur.  MDRs
can result in voluntary corrective actions, such as recalls or
customer notifications, or agency action, such as inspection
or enforcement action.  Manufacturers are also required to
report to the FDA certain corrections or recalls of marketed
medical devices.  In November 1999, the Company submitted an
MDR relating to its Blood Bank product.  A customer complaint
alleging improper system function when reflexively ordering Rh
Immune Globulin was resolved by disabling the reflex ordering
function.

The HIPAA contains requirements for the establishment of
standards for privacy of individually identifiable health
information.  The Department of Health and Human Services
("HHS") has proposed regulations to standardize the electronic
exchange of health information, require protection of health
information in electronic form, and restrict the use and
further disclosure of health information.  The regulations are
expected to become enforceable two years after adoption of the
final rule.  The regulations will be applicable to customer
operations involving use of the Company's products, and the
Company will have to ensure that its products support
compliance with HIPAA requirements to the extent the
regulations are applicable.  The Company cannot determine at
this time the effect, if any, that the final HIPAA regulations
may have on its business.

     The health care industry is subject to changing
political, economic and regulatory influences that may affect
the procurement practices and operations of health care
providers.  Many lawmakers have announced that they intend to
propose programs to reform the United States health care
system.  These programs may contain proposals to increase
governmental involvement in health care, lower reimbursement
rates and otherwise change the regulatory environment in which
the Company's clients operate.  Health care providers may
react to these proposals and the uncertainty surrounding such
proposals by curtailing or deferring investments, including
those for the Company's HCISs.  This may result in greater
selectivity in the allocation of capital funds, which could
have a material adverse effect on the Company's ability to
sell HCISs and services.  Such regulatory changes, if adopted,
and the reaction of health care providers to such changes may
have a material adverse effect on the Company's business and
results of operations.  See "Other Factors" below.


Proprietary Rights
------------------

     The Company's future success depends in large part upon
its ability to protect its technology and proprietary rights.
The Company relies on a combination of patent, copyright,
trade secret and trademark laws and contractual restrictions
to establish and protect its proprietary rights, although the
laws of certain foreign countries in which the Company
licenses or may license its products may not protect the
Company's proprietary rights to the

                                  16
<PAGE>

same extent as do laws in the United States.  It is the
Company's policy to require employees, consultants, clients
and, in certain circumstances, suppliers to execute nondisclosure
agreements upon the commencement of a relationship with the Company.

     The system acquisition agreements under which the Company
licenses its software products to its clients generally
prohibit the assignment or transfer of the software or use of
the software by any person or entity other than the named
client or its affiliates or successors. The agreements provide
that the Company retains ownership of the software and
proprietary information and of all rights therein.  Except for
information which is in the public domain, the client is
required to hold the software and proprietary information in
confidence and use reasonable care to preserve and safeguard
such information.

     FlexiLab, among other marks, is used by Sunquest in its
business and has been registered in the United States Patent
and Trademark Office.  The trade name Sunquest has also been
registered by Sunquest in the United Kingdom and Germany.
Sunquest, Sunquest Information Systems, FlexiRad and FlexiMed,
among other marks, are trademarks of Sunquest Information
Systems, Inc.  The trade name Antrim and other marks used by
Antrim in its business have also been registered with the
United States Patent and Trademark Office.  Also, certain of
the Company's products are the subject of patent protection or
a pending patent application.


System Acquisition Agreements
-----------------------------

     The Company typically furnishes its systems to its
clients pursuant to system acquisition agreements that grant
perpetual, non-exclusive and non-transferable licenses to use
those systems, including the source code for certain of the
Company's proprietary software included therein.  Under these
agreements, the Company also resells certain items of hardware
to its clients.  Clients pay specified fees for the license of
software proprietary to the Company and the sublicense of
software proprietary to third parties.  Clients also pay
specified fees for hardware, installation and training in the
use of the system.  License fees for the Company's systems are
typically based on a number of factors, including the number
and type of software modules included in the system, as well
as the volume of use by the client.  The Company generally
supports and maintains the licensed systems and provides
modifications, enhancements and upgrades for a monthly fee
under separate maintenance agreements.


Backlog
-------

     At December 31, 1999, the Company had a total contract
backlog of $124.6 million, which consisted of $55.9 million of
system sales and services and $68.7 million of support.  At
December 31, 1998, total contract backlog was $122.0 million,
which consisted of $61.1 million of system sales and services
and $60.9 million of support.  System sales and services
backlog consists of the unearned amounts of signed contracts
which have not yet been recognized as revenues.  Support
backlog consists primarily of contracted software support for
a period of 12 months.  The Company is unable to predict
accurately the amount of backlog it expects to fill in any
particular period, since it adjusts the timing of
installations to

                                  17
<PAGE>

accommodate clients' needs and since installations typically require
eight to 14 months to complete.


Employees
---------

     As of December 31, 1999, the Company had 924 employees.
None of the Company's employees are represented by a labor
union, nor has the Company experienced any work stoppages.
The Company believes that it has good relations with its
employees.


Forward-Looking Statements
--------------------------

     This report contains forward-looking statements,
including statements which contain words such as "will,"
"expects," "believes," "plans," "anticipates" and words of
similar impact. The following are certain factors that may
cause the Company's actual results to vary materially from
those which are the subject of any such forward-looking
statements.

Other Factors Affecting Future Performance

     Dependence on Single Product.  To date, the Company has
derived the majority of its revenues from sales of laboratory
information systems ("LISs") and related implementation
support services in the United States.  The Company expects
that it will continue to derive a significant portion of its
total revenues for the foreseeable future from sales of LISs
and related implementation and support services.  Accordingly,
market factors adversely affecting sales of LISs could have a
material adverse effect on the Company's business and results
of operations.  Such factors include, but are not limited to,
consolidation among the Company's customers, changes in the
criteria used by such customers in making purchase decisions,
and competitive pricing pressures.  The Company's target
market for its LISs, consisting primarily of large and mid-
sized hospitals, is characterized by continuing consolidation
resulting in fewer purchasing decisions at a higher dollar
value, a trend that may favor larger vendors with greater
numbers of hospitals currently under contract. There can be no
assurance that the Company will continue to be the vendor of
choice as newly consolidated customers replace legacy systems.
In addition, changes in the criteria used in making purchasing
decisions such as a shift to purchasing single vendor,
hospital-wide systems may have a material adverse effect on
the Company's ability to attract new customers.  Competitive
pressures or other factors, including the Company's efforts to
expand its LIS offerings to new markets, may result in
significant price decreases that could have a material adverse
effect on the Company's business and results of operations.
There can be no assurance that the Company will be able to
sustain or increase the level of revenues from sales of its
LISs on an annual or quarterly basis.

     Rapid Technological Change and Dependence on New Product
Development, Enhancement and Acceptance.  The HCIS market is
characterized by rapid technological advances, frequent new
product introductions and evolving industry standards that are
outside the control of the Company.  The development and sale
of additional applications is a principal means of competition
in the HCIS market.  Advances in both hardware and software
technology, including the introduction of new hardware
platforms, new programming languages and new software
applications, will require the Company to make

                                  18
<PAGE>

significant ongoing expenditures for research and development in
order to adapt the Company's existing and subsequently introduced HCISs
to such new technologies and to take advantage of the benefits
they offer.  For the foreseeable future, the Company intends
to continue to devote substantial financial, managerial and
personnel resources to its product development efforts.  The
development of new and enhanced HCISs is a complex and
uncertain process requiring high levels of innovation and the
accurate anticipation of technological and market trends, and
from time to time the Company has experienced delays in
introducing new HCISs and HCIS enhancements.  The Company
intends to complete its migration of products and clients to
Windows-based software and to Web-enable certain of its
products.  An inability to accomplish these initiatives or any
significant delay in these initiatives could have an adverse
effect on the Company's business and results of operations.
The failure of the Company to develop and introduce new HCISs,
such as its pharmacy systems, its Clinical Data Management
suite of products or its e-business initiatives, and HCIS
enhancements successfully or the failure to respond
effectively to technological changes, including the use of the
Internet, could have a material adverse effect on the
Company's business and results of operations.

     Competition.  The markets for HCISs, including the
markets for the Company's information systems, are highly
competitive.  Most of the Company's revenues are derived from
lengthy, competitive procurement processes managed by
sophisticated purchasers that extensively investigate and
compare HCISs offered by the Company and its competitors.  The
Company believes that the principal competitive factors
influencing the market for its HCISs include vendor and
product reputation, quality of client support, product
architecture, functionality and features, ease of use,
rapidity of implementation, product performance and price.
There can be no assurance that the Company will be able to
compete successfully with respect to any of such factors.  In
addition, many of the Company's current and potential
competitors have significantly greater financial, managerial,
development, technical, marketing and sales resources than the
Company and may be able to devote those resources to develop
and introduce new products more rapidly than the Company or
with significantly greater functionality than, and superior
overall performance to, those offered by the Company.  These
competitors may also be able to initiate and withstand
significant price decreases more effectively than the Company.

     Regulation.  The Company expects that the FDA is likely
to become increasingly active in regulating computer software
that is intended for use in health care settings.  In March
1994, the FDA notified blood bank software manufacturers that
blood bank software products would be subject to active device
regulation, including premarket notification or premarket
approval.  Manufacturers were notified to submit a premarket
notification by March 31, 1995, although this deadline was
later extended to March 31, 1996.  Accordingly, the Company
submitted a 510(k) notification to the FDA on March 27, 1996
with respect to its Blood Bank software.  Following periodic
discussions between the FDA and the Company, on December 28,
1998, the FDA notified the Company that the 510(k)
notification was incomplete, the Blood Bank product was deemed
not substantially equivalent to a predicate device, and a
premarket approval application ("PMA") would be required
unless additional information was submitted in a new, revised
510(k) notification for the Blood Bank product.  The Company
submitted a new 510(k) notification on January 29, 1999.  On
August 16, 1999, the Company received 510(k) clearance for the
FlexiLab Blood Bank and Blood Donor System version 5.2 on both
the IBM AIX and the Compaq (DEC) UNIX platforms.  On November
17, 1999, the Company also received 510(k) clearance for the

                                  19
<PAGE>

FlexiLab Blood Bank and Blood Donor System on the Compaq Alpha
Open VMS platform.  The Company's ability to sell, promote,
and install the FlexiLab Blood Bank and Blood Donor System
version 5.2 on other platforms is contingent upon receiving
the FDA clearance of a 510(k) notification.  In addition, the
marketing of versions of the FlexiLab Blood Bank and Blood
Donor System other than version 5.2 may require FDA clearance
of a 510(k) notification.  Compliance with the premarket
notification and other device regulatory requirements and any
future requirements could be costly and could delay or prelude
the introduction of certain new products.

     The HIPAA contains requirements for the establishment of
standards for privacy of individually identifiable health
information.  The HHS has proposed regulations to standardize
the electronic exchange of health information, require
protection of health information in electronic form, and
restrict the use and further disclosure of health information.
The regulations are expected to become enforceable two years
after adoption of the final rule.  The regulations will be
applicable to customer operations involving use of the
Company's products, and the Company will have to ensure that
its products support compliance with HIPAA requirements to the
extent the regulations are applicable.  The Company cannot
determine at this time the effect, if any, that the final
HIPAA regulations may have on its business.

     In addition, the health care industry is subject to
changing political, economic and regulatory influences that
may affect the procurement practices and operation of health
care providers.  Many lawmakers have announced that they
intend to propose programs to reform the United States health
care system.  These programs may contain proposals to increase
governmental involvement in health care, lower reimbursement
rates and otherwise change the regulatory environment in which
the Company's clients operate.  Health care providers may
react to these proposals and the uncertainty surrounding such
proposals by curtailing or deferring investments, including
those for the Company's HCISs.  This may result in greater
selectivity in the allocation of capital funds, which could
have a material adverse effect on the Company's ability to
sell HCISs and services.  Such regulatory changes, if adopted,
and the reaction of health care providers to such changes may
have a material adverse effect on the Company's business and
results of operations.

     Control by Current Shareholders; Payments upon Change in
Control.  As of the date of this Report, Dr. Sidney A.
Goldblatt, Chairman of the Board and Chief Executive Officer
of the Company; Bradley L. Goldblatt, Dr. Goldblatt and Nina
M. Dmetruk, the Executive Vice President, Chief Financial
Officer, Secretary and Treasurer of the Company, as trustees
for the benefit of Bradley L. Goldblatt; Bradley L. Goldblatt,
Dr. Goldblatt and Ms. Dmetruk, as trustees for the benefit of
Curtis S. Goldblatt; and Jodi Beth Gottlieb, Dr. Goldblatt and
Ms. Dmetruk, as trustees for the benefit of Jodi Beth Gottlieb
(such trusts being collectively referred to herein as the
"Trusts") own approximately 76.6% of the outstanding Common
Stock.  As a result, these shareholders, if acting in concert,
will be able to elect or remove the entire Board of Directors
and control the outcomes of all other issues submitted to the
Company's shareholders for approval.  This concentration of
ownership may enable Dr. Goldblatt and the Trusts to cause or
prevent change in control of the Company without the approval
of other shareholders.  There can be no assurance that this
concentration of ownership will not have a material adverse
effect on the market price of the Common Stock.  In the event
that Dr. Goldblatt, his three children and trusts created in
their benefit (including the Trusts) cease to own, directly or
indirectly, fifty percent or more of the outstanding stock

                                  20
<PAGE>

of the Company, Ms. Dmetruk will be entitled to elect, during the
ninety days following such event, to terminate her employment
with the Company and receive $1.2 million in severance pay.

     Significant Fluctuations in Quarterly Operating Results;
Revenue Recognition Policy.  The Company's quarterly revenues
and results of operations have varied significantly as a
result of a number of factors, including (i) the volume and
timing of systems sales and installations; (ii) the timing of
client acceptances; (iii) the length and complexity of the
systems sales and installation cycles; (iv) seasonal buying
trends as a result of clients' annual purchasing and budgeting
practices; and (v) the Company's sales commission practices.
The Company expects that these variations will continue for
the foreseeable future.  Revenues from the software portion of
system sales are recognized on the percentage-of-completion
method and are determined based upon actual hours incurred
related to total estimated installation hours.  As a result,
the timing of revenue recognition varies considerably and
could be impeded by a number of factors, including
availability of Company personnel, the Company's need to
allocate system installation resources to other installations
or to research and development activities, availability of
client personnel and other resources, and complexity of the
clients' needs and delays imposed by clients. Because a
significant percentage of the Company's expenses, particularly
employee compensation, is relatively fixed, variations in the
timing of system sales, installations and training costs can
cause significant variations in operating results from quarter
to quarter.  If total revenues are below expectations in any
period, the Company's inability to adjust spending to
compensate fully for the lower revenues may magnify the
adverse effect of such a shortfall on the Company's results of
operations.  Accordingly, the Company believes that period-to-
period comparisons of revenue and results of operations are
not necessarily meaningful and should not be relied upon as
indicators of future performance.

     Dependence on Key Personnel; Management of Changing
Business.  The Company's future success depends to a
significant extent upon the executive officers, the Board of
Directors, and certain other managerial, technical and
marketing personnel. The Company has experienced turnover at
the executive level in the past, and the loss of the services
of key personnel could have a material adverse effect on the
Company's business and results of operations. The Company's
ability to manage growth will require it to continue to
attract, motivate and retain highly skilled managerial,
technical and sales and marketing personnel.  Competition for
such personnel is intense, and there can be no assurance that
the Company will be successful in attracting, motivating and
retaining the personnel required to maintain and improve its
business and results of operations.

     Uncertainty of the Internet.  The impact on the Company
of emerging areas such as the Internet, electronic commerce
and on-line services is uncertain.  Rapid growth in the use of
and interest in the Internet and electronic commerce is a
recent phenomenon and the Company cannot predict with any
assurance whether the acceptance and use will continue to
develop or that a sufficiently broad base of customers will
adopt or continue to use the Internet as a medium of commerce.
Demand for and market acceptance of recently introduced
services and products over the Internet are subject to a high
level of uncertainty and there exist few proven services and
products.

     There can be no assurance that the Company will provide a
product offering that will satisfy customer demands in these
new emerging areas.  In addition, standards for network

                                  21
<PAGE>

protocols, as well as other standards adopted by the industry
for the Internet, are evolving rapidly.  There can be no
assurance that standards chosen by the Company will leverage
its products to compete effectively for Internet business
opportunities as they arise.  If the Company is unable to
develop services and products that attract, retain and expand
its customer base, results of operations and financial
condition could be materially adversely affected.

     Critical issues concerning the commercial use of the
Internet, including security, demand, reliability, cost, ease
of use, accessibility, quality of service and potential tax or
other government regulation, remain unresolved and may affect
the use of the Internet as a medium to support the
distribution of the Company's software.  If these issues are
not favorably resolved, the Company's business, results of
operations and financial condition could be materially
adversely affected.

     In addition, problems with the Company's computer and
communications hardware and network systems, including
problems with third parties' systems, could cause
interruptions.  Those interruptions could result from software
or hardware failures, inadequate Internet infrastructure
capacity and other human or mechanical causes.  The Company
expects to experience occasional, temporary capacity
constraints due to anticipated increased Internet traffic,
which could cause unanticipated system disruptions, slower
response time, impaired quality and degradation of levels of
customer service.  If the Company experiences frequent or long-
term system interruptions, it may experience a decrease in the
number of customers using its products and services over the
Internet.

     Risks Associated with Identifying and Integrating
Acquisitions; Other Strategic Alternatives.  The Company may
grow through the acquisition of complementary products,
technologies or businesses in the HCIS industry.  The
Company's management has limited experience in identifying
appropriate acquisitions and in integrating products,
technologies and businesses into its operations.  The
evaluation, negotiation and integration of any such
acquisition may divert the time, attention and resources of
the Company, particularly its management. There can be no
assurance that the Company will be able to integrate
successfully any acquired products, technologies or businesses
into its operations. In addition, there is significant
competition for acquisition opportunities in the HCIS
industry.  Consolidation in the industry may intensify such
competition and thereby increase the costs of such acquisition
opportunities. The failure to identify and compete
successfully for strategic acquisition opportunities or to
integrate successfully any acquired products, technologies or
businesses could have a material adverse effect on the
Company.  In addition to acquisitions, the Company may from
time to time consider other strategic alternatives including,
without limitation, mergers, consolidations, joint ventures
and recapitalizations.  The evaluation and implementation of
any such alternative may divert the time, attention and
resources of the Company.  There can be no assurance that any
such strategic alternative would be implemented successfully.

     Dependence on Proprietary Rights.  The Company's future
success depends in large part upon its ability to protect its
technology and proprietary rights.  The Company relies on a
combination of patent, copyright, trade secret and trademark
laws and contractual restrictions to establish and protect its
proprietary rights, although the laws of certain foreign
countries in which the Company licenses or may license its
products may not protect the Company's proprietary rights to
the same extent as do laws in the United States.  It may
nonetheless be

                                  22
<PAGE>

possible for third parties to misappropriate the Company's technology
and proprietary information or to develop independently similar or
superior technology.  There can be no assurance that the legal protections
afforded to the Company and the measures taken by the Company will be
adequate to protect its intellectual property. Any misappropriation of
the Company's technology or proprietary information could have
a material adverse effect on the Company's business and
results of operations.  Moreover, the Company is subject to
the risk that others will assert adverse claims and commence
litigation alleging infringement or misappropriation of their
intellectual property rights.  There can be no assurance that
others will not assert claims or commence litigation with
respect to the Company's current or future HCISs.  In any such
event, the Company may be required to engage in protracted and
costly litigation, regardless of the merits of such claims;
discontinue the use of certain software codes, processes or
trademarks; cease to manufacture, use and license infringing
products; develop non-infringing technology; or enter into
license arrangements with respect to the disputed intellectual
property.  There can be no assurance that the Company would be
able to develop alternative technology or that any necessary
licenses would be available or that, if available, such
licenses could be obtained on commercially reasonable terms.
Responding to and defending any of these claims could distract
the attention of management and have a material adverse effect
on the Company's business and results of operations.

     Product Liability.  The Company's systems include
applications that may relate to confidential patient medical
histories and treatment plans.  Improper disclosure of this
information or any failure by the Company's systems to provide
accurate and timely information could result in claims against
the Company by its clients or their patients.  A successful
claim brought against the Company in excess of its insurance
coverage could have a material adverse effect on the Company's
business or results of operations, and even unsuccessful
claims could result in the expenditure of substantial funds in
litigation and the diversion of management time and resources.
There can be no assurance that the Company will not be subject
to such claims in the future, that such claims will not result
in liability in excess of any insurance coverage maintained by
the Company with respect to such claims, that insurance will
cover such claims or that appropriate insurance will continue
to be available to the Company at commercially reasonable
rates.

     Fluctuations of Stock Price.  In recent years, the stock
market in general, and the shares of software technology
companies in particular, have experienced extreme price
fluctuations that are often unrelated to the operating
performance of such companies.  The Company has experienced
fluctuations in its stock price related to these general
market fluctuations and to such operating factors as quarterly
fluctuations in its revenues or results of operations, general
conditions in the information technology services industry and
announcements of new products or services by the Company or
its competitors.  These fluctuations may adversely affect the
future market price of the Company's Common Stock.

     Transactions with Affiliates.  The Company has historically
engaged in transactions with affiliates, including Dr. Sidney A.
Goldblatt, Trusts and certain affiliates of the Trusts.  Although
the Company took precautions to achieve results which the Company
believes were equivalent to arm's-length transactions, there can be no
assurance that actual results will be as favorable to the
Company as arm's-length transactions.  In May 1996, the
Company adopted a policy that all future transactions between
the Company and its officers, directors, principal
shareholders and their affiliates shall be on terms no less
favorable to the Company than could be obtained by the Company
from unrelated third parties, and shall be approved

                                  23
<PAGE>

by a majority of the outside independent and disinterested
directors.  This policy does not apply to transactions entered
into before the adoption of the policy or to renewals of
existing transactions on similar terms.


Executive Officers of the Registrant
------------------------------------

     Information concerning the executive officers of the
Company, as of March 17, 2000, is set forth below.

     Name             Age           Position
-------------------  -----  ------------------------
Sidney A. Goldblatt    65   Chief Executive Officer
                            and Chairman of the Board
Mark J. Emkjer         44   President and Chief
                            Operating Officer
Nina M. Dmetruk        47   Executive Vice President-
                            Chief Financial Officer,
                            Secretary, Treasurer and
                            Director
James F. Garliepp      48   Executive Vice President-
                            Chief Design Officer
Ivan G. Boyd           45   Senior Vice President-
                            Sales and Marketing

     Sidney A. Goldblatt, M.D., a co-founder of the Company,
has been Chief Executive Officer of the Company since December
1994, a director of the Company since its formation in 1979
and Chairman of the Board since 1987.  Dr. Goldblatt also
served as President of the Company from September 1986 to
February 2000 and Chief Operating Officer of the Company from
December 1992 to August 1994.  Dr. Goldblatt has served as
President and sole shareholder of  S. Goldblatt Pathology
Associates, P.C. since 1971.

     Mark J. Emkjer has been President of the Company since
February 2000 and Chief Operating Officer since January 1999.
From April 1996 to December 1998, Mr. Emkjer was employed by
Pace, a company that develops clinical decision support
software for IDNs, where he served as President and Chief
Executive Officer.  From January 1991 to March 1996, Mr.
Emkjer was employed by Hospital Cost Consultants, a provider
of clinical and financial software solutions to the health
care industry, where he served as President and Chief
Executive Officer.

     Nina M. Dmetruk has served as Executive Vice President-
Chief Financial Officer of the Company since September 1991
and a director of the Company since December 1991.  She has
served as Secretary of the Company since August 1996 and
Treasurer of the Company since April 1998.  Effective May 26,
1996, Ms. Dmetruk entered into an employment agreement with
the Company under which she agreed to serve as the Executive
Vice President-Chief Financial Officer of the Company on a
full-time basis.  During her earlier service as Executive Vice
President-Chief Financial Officer, Ms. Dmetruk was not an
employee of the Company and devoted approximately 60% to 80%
of her time to the Company's business.  Ms. Dmetruk is a CPA
and a CFP and until May 1996 was the sole owner of a public
accounting firm for more than five years.

                                  24
<PAGE>

     James F. Garliepp has been Executive Vice President-Chief
Design Officer since March 2000.  From September 1991 to March
2000, Mr. Garliepp served as Executive Vice President-Chief
Technology Officer.  Mr. Garliepp previously served as Senior
Vice President-Technology from 1989 to September 1991 and
served in various other positions from 1982 to 1989.

     Ivan G. Boyd has been Senior Vice President-Sales and
Marketing since November 1997.  From October 1995 to September
1997, Mr. Boyd was employed by ADAC HealthCare Information
Systems, Inc., a division of ADAC Labs, a health care
information systems company, where he served as Executive Vice
President of Sales and Marketing.  From September 1994 to July
1995, Mr. Boyd was employed by First Data Corporation, a
health care information systems company, where he served as
Senior Vice President of Sales.  From June 1980 to September
1994, Mr. Boyd was employed by Digital Equipment Corporation,
a computer manufacturing company, where he served  as
Worldwide Healthcare Director from April 1993 to September
1994 and U.S. Channels Marketing Director from July 1991 to
April 1993.

     The executive officers of the Company are elected by and
serve at the discretion of the Board of Directors.


Item 2.  Properties.

     The Company's principal executive and administrative
offices and its sales and marketing, customer services and
product development facilities are located in two buildings
containing 102,000 square feet of office space and 85,000
square feet of office space, respectively, in Tucson, Arizona.
The Company leases the buildings from Any Travel, Inc., a
travel agency located in Tucson, Arizona, which is owned by
the Trusts.  The lease for the 102,000 square foot building,
which includes an adjacent two-level parking facility,
currently requires monthly rental payments of $100,406 and
expires in September 2001.  The Company occupies approximately
62,656 square feet of office space in the other building and
subleases the remaining space to a number of subtenants.  The
lease for the second building currently requires monthly
rental payments of $74,971 and expires in May 2004. Sunquest
receives monthly rental payments under the subleases totaling
approximately $15,730.  In addition, the Company owns a
facility containing approximately 43,620 square feet, in
Tucson, Arizona, which was purchased in February 1997 for cash
in the amount of $1.8 million.  The building is being leased
to third parties but will eventually be used for office
expansion.  Currently, Sunquest receives monthly rental
payments of approximately $30,289 from this facility.  The
Company also owns a two-story building, containing
approximately 18,000 square feet, in Johnstown, Pennsylvania,
which it may use as an office facility.

     Antrim leases office space in Plano, Texas, containing
approximately 47,420 square feet.  The lease currently
requires monthly rental payments of $64,215 and expires in May
2001.  Antrim receives monthly rental payments under a
sublease totaling approximately $6,222.

     The Company believes that its facilities will be adequate
for its current operations for at least the next twelve
months.

                                  25
<PAGE>

     Borrowings under the Company's line of credit with Bank
of America National Trust and Savings Association ("Bank of
America") are secured by all of the Company's assets.  The
Company has also granted liens on all of its assets to a
vendor to secure amounts due for the purchase of hardware and
other equipment.


Item 3.  Legal Proceedings.

     The civil action instituted by the Company in the United
States District Court for the Western District of Pennsylvania
against Dean Witter Reynolds, Inc. and The Compucare Company
for material misrepresentations and omissions in connection
with the Company's purchase of the outstanding capital stock
of Antrim Corporation was settled in January 2000 without a
material impact on the Company's financial statements.

     On February 23, 2000, Dynamic Healthcare Technologies,
Inc. ("Dynamic") brought an action against the Company in the
Circuit Court for the 11th Judicial Circuit, Dade County,
Florida, alleging breaches by the Company of the Value Added
Reseller Agreement (the "VAR") between them under which the
Company is authorized to grant sub-licenses of Dynamic's
CoPath software product.  Dynamic seeks monetary damages in an
unspecified amount and a declaration by the Court that the VAR
should be terminated as a result of the alleged breaches.  The
Company believes that it has defenses and counterclaims to
Dynamic's allegations and, as such, the Company intends to
vigorously defend against Dynamic's claims.  At the present
time, the Company is unable to determine the probable outcome
of the lawsuit.

     The Company is also subject to legal proceedings and
claims covering a wide range of matters that arose in the
ordinary course of business.  Management is of the opinion
that the potential liability with respect to these legal
proceedings and claims will not materially affect the
Company's financial position or results of operations.


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

     No matters were submitted to a vote of shareholders
during the quarter ended December 31, 1999.

                                  26
<PAGE>

                            Part II

Item 5.  Market for Registrant's Common Equity and Related Stockholder
         Matters.

     The Company's Common Stock is traded on the over-the-
counter market and is quoted on the Nasdaq National Market
System under the symbol "SUNQ."  The following table sets
forth, for the periods indicated, the high and low sales
prices of the Common Stock as reported by the Nasdaq National
Market System.

                             Price Range
     Period                High       Low
-------------------------------------------
1999
  First quarter          $15.0000  $ 9.3750
  Second quarter         $16.5000  $10.7500
  Third quarter          $17.7500  $12.2500
  Fourth quarter         $16.0000  $10.6875

                             Price Range
     Period                High       Low
-------------------------------------------
1998
  First quarter          $12.3750  $ 7.8750
  Second quarter         $11.0000  $ 6.7500
  Third quarter          $12.3750  $ 7.2500
  Fourth quarter         $15.0000  $ 6.8750

     Except for S corporation distributions, no dividends have
been declared or paid on the Company's Common Stock.  The
Company anticipates that it will retain future earnings, if
any, to fund the development and growth of its business and
does not anticipate paying any cash dividends on its Common
Stock in the foreseeable future.  The Company's line of credit
prohibits the payment of capital distributions or dividends.
At March 17, 2000, there were 41 holders of record of the
Common Stock, and the Company believes that on that date there
were in excess of 1,300 beneficial owners of the Common Stock.


Item 6.  Selected Financial Data.

     The information required by this item is included in the
Company's Annual Report to Shareholders for the fiscal year
ended December 31, 1999 (the "Annual Report") and such
information is incorporated herein by reference.


Item 7.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations.

     The information required by this item is included in the
Annual Report and such information is incorporated herein by
reference.

                                    27
<PAGE>

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

      The Company is exposed to market risk from changes in
interest rates.  The Company's primary interest rate risk
relates to its short-term investments in Tax-exempt Municipals
and Short-term Demand Notes all of which are classified as
available-for-sale.  At December 31, 1999, the Company had
total short-term investments of $37.2 million.  Assuming a 10%
increase in interest rates on the Company's short-term
investments (i.e., an increase from the December 31, 1999
weighted-average interest rate of 5.56% to a weighted-average
interest rate of 6.12%), the fair value of these investments
would decrease by approximately $621,000.


Item 8.  Financial Statements and Supplementary Data.

     The financial statements, together with the report
thereon of Ernst & Young LLP dated February 8, 2000, and
supplementary data required by this item are included in the
Annual Report and such financial statements and supplementary
data are incorporated herein by reference.


Item 9.  Changes in and Disagreements with Accountants on
         Accounting and Financial Disclosure.

     None


                            Part III

Item 10. Directors and Executive Officers of the
Registrant.

     The information set forth under the caption "Executive
Officers of the Registrant" in Part I of this Annual Report on
Form 10-K and the information set forth under the caption
"Election of Directors" and "Section 16(a) Beneficial
Ownership Reporting Compliance" in the Company's Proxy
Statement for the 2000 Annual Meeting of Shareholders (the
"Proxy Statement") is incorporated herein by reference.


Item 11. Executive Compensation.

     The information set forth under the caption "Executive
Compensation and Related Information" in the Proxy Statement
is incorporated herein by reference.


Item 12. Security Ownership of Certain Beneficial Owners
         and Management.

     The information set forth under the caption "Security
Ownership of Certain Beneficial Owners and Management" in the
Proxy Statement is incorporated herein by reference.

                                  28
<PAGE>

Item 13. Certain Relationships and Related Transactions.

     The information set forth under the caption "Certain
Transactions and Business Relationships" in the Proxy
Statement is incorporated herein by reference.


                            Part IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

 (a) The following documents are filed as a part of this Report:

     (1) Financial Statements (Incorporated by reference in Item 8)
         ----------------------------------------------------------

        Report of Independent Auditors dated February 8, 2000

        Consolidated Balance Sheets as of December 31, 1999 and 1998

        Consolidated Statements of Income and Comprehensive
        Income for the years ended December 31, 1999, 1998 and 1997

        Consolidated Statements of Shareholders' Equity for
        the years ended December 31, 1999, 1998 and 1997

        Consolidated Statements of Cash Flows for the years
        ended December 31, 1999, 1998 and 1997

        Notes to Consolidated Financial Statements

        [All financial statement schedules are omitted as
        inapplicable or because the required information is
        included in the Consolidated Financial Statements or
        the Notes to Consolidated Financial Statements.]

     (2) Exhibits
         --------

     3A    Amended and Restated Articles of Incorporation of
           the registrant. (1)

     3B    Amended and Restated Bylaws of the registrant. (1)

     10.3  Sunquest Information Systems, Inc. and Affiliates 401(k)
           Profit Sharing Plan (as Amended and Restated Generally
           Effective January 1, 1997). (2) (3)

     10.4  Qualified Plan Trust Agreement dated September 2, 1999
           between the registrant and T. Rowe Price Trust Company. (2) (3)

     10B   Lease Agreement dated as of September 17, 1991
           between the registrant, as lessee, and Any Travel,
           Inc., as lessor, with respect to the premises located
           at 4801 East Broadway Boulevard, Tucson, Arizona. (1)

                                  29
<PAGE>

     10E   Triple Net Lease Agreement dated as of May 2, 1994
           between the registrant, as lessee, and Any Travel, Inc.,
           as lessor, with respect to the premises located at 1121-
           1161 North El Dorado Place in Tucson, Arizona. (1)

     10I.3 Stock Incentive Plan of 1996, as amended March 12, 1998. (2) (5)

     10K   Business Loan Agreement dated as of March 8, 1996,
           as amended March 11, 1996, among the registrant,
           Sunquest Europa Limited and Bank of America  Arizona, and
           related Security Agreements. (1)

     10N   Tax Indemnification Agreement dated as of April 30, 1996,
           between the registrant and its shareholders of
           record as of April 30, 1996. (1)

     10P   Employment Agreement effective May 26, 1996 between
           Nina M. Dmetruk and the registrant. (1) (2)

     10Q   Lease dated June 1, 1996 between Antrim Corporation,
           as lessee, and Massachusetts Mutual Life Insurance
           Company, as lessor, with respect to office space in
           Plano, Texas. (6)

     10S   Form of Underwriting Agreement dated May 30, 1996,
           filed as Exhibit 1A to Registration Statement No. 333-2790
           and incorporated herein by reference.

     10T   Business Loan Agreement dated as of December 30, 1997,
           among the registrant, Sunquest Europa Limited, Antrim
           Corporation, Sunquest Pharmacy Information Systems, Inc.,
           Sunquest Germany GmbH and Bank of America National Trust
           and Savings Association. (5)

     10.2  Second Amendment to Business Loan Agreement
           dated December 30, 1997, among the registrant,
           Sunquest Europa Limited, Antrim Corporation,
           Sunquest Pharmacy Information Systems, Inc.,
           Sunquest Germany GmbH and Bank of America National
           Trust and Savings Associations, filed as Exhibit
           10.1 to Form 10-Q for the quarter ended June 30, 1999.

     10U   Stock Purchase Agreement with The Compucare Company,
           dated as of November 26, 1996, filed as Exhibit 2A to
           Form 8-K dated December 11, 1996 and incorporated
           herein by reference.

     10.1  Employment Agreement effective December 14, 1998
           between Mark J. Emkjer and the registrant. (2) (4)

     13.1  Financial Information Section of Annual Report to
           Shareholders for 1999. (3)

     21.1  Subsidiaries of the registrant. (3)

                                  30
<PAGE>

     23.1  Consent of Independent Auditors, dated March 27, 2000. (3)

     27.1 Financial Data Schedule for the year ended December 31, 1999. (3)

     99.1 CD Presentation (3)

     ___________________
     (1)  Filed, under the same number, as an exhibit to Registration
          Statement No. 333-2790 and incorporated herein by reference.

     (2)  Management contract or compensatory plan or arrangement.

     (3)  Filed herewith.

     (4)  Filed, under the same number, as an exhibit to the Form
          10-K for the year ended December 31, 1998.

     (5)  Filed, under the same number, as an exhibit to the Form
          10-K for the year ended December 31, 1997.

     (6)  Filed, under the same number, as an exhibit to the Form
          10-K for the year ended December 31, 1996.


(b)  Reports on Form 8-K

        No reports on Form 8-K were filed by the registrant during
    the quarter ended December 31, 1999.

                                  31
<PAGE>

                          SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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, in
the City of Johnstown, Commonwealth of Pennsylvania, on March 27, 2000.

                    SUNQUEST INFORMATION SYSTEMS, INC.
                              (Registrant)

                    By:  /s/ Sidney A. Goldblatt
                         _______________________
                         Chief Executive Officer

      Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the date indicated.

     Signature             Title                             Date
     ---------             -----                             ----

/s/ Sidney A. Goldblatt    Chairman of the Board and         March 27,2000
_______________________    Chief Executive Officer
 Sidney A. Goldblatt       (Principal Executive Officer)
                           and Director

/s/ Nina M. Dmetruk        Executive Vice President and     March 27, 2000
_______________________    Chief Financial Officer
 Nina M. Dmetruk           (Principal Financial and
                           Accounting Officer) and Director

/s/ Richard W. Barker      Director                         March 27, 2000
_______________________
 Richard W. Barker

/s/ Larry R. Ferguson      Director                         March 27, 2000
_______________________
 Larry R. Ferguson

/s/ Curtis S. Goldblatt    Director                         March 27, 2000
_______________________
 Curtis S. Goldblatt

/s/ Stanley J. Lehman      Director                         March 27, 2000
_______________________
 Stanley J. Lehman

/s/ Charles A. Schliebs    Director                         March 27, 2000
_______________________
 Charles A. Schliebs

                                  32
<PAGE>

              Sunquest Information Systems, Inc.

       Form 10-K For Fiscal Year Ended December 31, 1999
                  Commission File No. 0-28212
                  ---------------------------

                         Exhibit Index
                         -------------

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

3A              Amended and Restated Articles of Incorporation of
                the registrant. *

3B              Amended and Restated Bylaws of the registrant. *

10.3            Sunquest Information Systems, Inc. and Affiliates 401(k)
                Profit Sharing Plan (as Amended and Restated Generally
                Effective January 1, 1997).

10.4            Qualified Plan Trust Agreement dated September 2, 1999
                between the registrant and T. Rowe Price Trust Company.

10B             Lease Agreement dated as of September 17, 1991
                between the registrant, as lessee, and Any Travel,
                Inc., as lessor, with respect to the premises located at
                4801 East Broadway Boulevard, Tucson, Arizona. *

10E             Triple Net Lease Agreement dated as of May 2, 1994
                between the registrant, as lessee, and Any Travel, Inc.,
                as lessor, with respect to the premises located at 1121-
                1161 North El Dorado Place in Tucson, Arizona. *

10I.3           Stock Incentive Plan of 1996, as amended March 12, 1998. *

10K             Business Loan Agreement dated as of March 8, 1996,
                as amended March 11, 1996, among the registrant,
                Sunquest Europa Limited and Bank of America Arizona, and
                related Security Agreements. *

10N             Tax Indemnification Agreement dated as of April 30,
                1996, between the registrant and its shareholders
                of record as of April 30, 1996. *

10P             Employment Agreement effective May 26, 1996 between
                Nina M. Dmetruk and the registrant. *

10Q             Lease dated June 1, 1996 between Antrim Corporation,
                as lessee, and Massachusetts Mutual Life Insurance
                Company, as lessor, with respect to office space in Plano,
                Texas. *

10S             Form of Underwriting Agreement dated May 30, 1996. *

<PAGE>

10T             Business Loan Agreement dated as of December 30,
                1997, among the registrant, Sunquest Europa Limited,
                Antrim Corporation, Sunquest Pharmacy Information Systems,
                Inc., Sunquest Germany GmbH and Bank of America National
                Trust and Savings Association. *

10.2            Second Amendment to Business Loan Agreement dated
                December 30, 1997, among the registrant, Sunquest
                Europa Limited, Antrim Corporation, Sunquest
                Pharmacy Information Systems, Inc., Sunquest Germany
                GmbH and Bank of America National Trust and Savings
                Associations. *

10U             Stock Purchase Agreement with The Compucare Company,
                dated as of November 26, 1996. *

10.1            Employment Agreement effective December 14, 1998
                between Mark J. Emkjer and the registrant. *

13.1            Financial Information Section of Annual Report to
                Shareholders for 1999.

21.1            Subsidiaries of the registrant.

23.1            Consent of Independent Auditors, dated March 27, 2000.

27.1            Financial Data Schedule for the year ended December
                31, 1999.

99.1            CD Presentation

___________________
* Incorporated by reference.