<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, 1998

                              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 19, 1999, the registrant had 15,394,460 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 19, 1999 as
reported by Nasdaq, was $41,850,984 (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
1998 are incorporated by reference into Parts II and IV of
this Form 10-K.

Portions of the registrant's Proxy Statement for the 1999
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 1998 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 - 1998
                       TABLE OF CONTENTS
                                                                      Page
                                                                      ----
PART I
  Item 1  - Business
    General                                                              1
    Products                                                             1
    Third-Party Marketing Arrangements                                   7
    Products Under Development                                           8
    Recent Developments                                                  9
    Year 2000 Compliance                                                 9
    Client Services                                                     10
    Marketing                                                           11
    Technology                                                          12
    Research and Development                                            12
    Competition                                                         13
    Proprietary Rights                                                  14
    System Acquisition Agreements                                       14
    Backlog                                                             14
    Employees                                                           15
    Forward-Looking Statements                                          15
    Executive Officers of the Registrant                                21
  Item 2 - Properties                                                   22
  Item 3 - Legal Proceedings                                            23
  Item 4 - Submission of Matters to a Vote of Security Holders          23
PART II
  Item 5 - Market for Registrant's Common Equity and Related
           Stockholder Matters                                          24
  Item 6 - Selected Financial Data                                      24
  Item 7 - Management's Discussion and Analysis of Financial
           Condition and Results of Operations                          24
  Item 7A- Quantitative and Qualitative Disclosures about Market Risk   25
  Item 8 - Financial Statements and Supplementary Data                  25
  Item 9 - Changes in and Disagreements with Accountants on
             Accounting and Financial Disclosure                        25
PART III
  Item 10 - Directors and Executive Officers of the Registrant          25
  Item 11 - Executive Compensation                                      25
  Item 12 - Security Ownership of Certain Beneficial Owners and
              Management                                                25
  Item 13 - Certain Relationships and Related Transactions              26
PART IV
  Item 14 - Exhibits, Financial Statement Schedules, and Reports on
              Form 8-K                                                  26
  Signatures                                                            29


                                   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, 1998, Sunquest had an
installed customer base of more than 1,140 sites, including
155 of the world's largest IDNs, in the United States, Canada,
United Kingdom, Mexico, Saudi Arabia, Ireland and Denmark.

      In order to lower health care delivery costs while
improving the quality of patient care, IDNs need detailed
clinical and management information that enables 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 and existing systems from different vendors.
Sunquest now offers five 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

      Sunquest's business strategy is to engineer its products
for the changing health care environment, now characterized by
the emergence of IDNs and an increasing trend to outpatient
care delivery. These large 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.

                                   1

<PAGE>

       Sunquest now offers five 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 commercial and
medical reference laboratory suite with systems that automate
the clinical, financial and information support operations of
commercial medical laboratories; (iii) the integration and
connectivity suite with systems that allow Sunquest products
to communicate with other vendors' software and hardware
products; (iv) the clinical data management suite with systems
that integrate clinical patient care data directly to the
caregiver or clinical department; and (v) customer support and
services.

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.

  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, security and
     audit trails.  The Clinical Laboratory module released in
     1997 features a new database schema, 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.

                                   2
<PAGE>
     
     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 enhancements 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.
     
     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 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 included 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.  Currently, due to restrictions imposed by the
     United States Food and Drug Administration (the  "FDA"),
     the Company is not actively marketing and selling its own
     version of this product but continues to support those
     sites that are currently using the Blood Bank module.  If
     and when the Company's 510(k) notification for the Blood
     Bank module is cleared by the FDA, the Company
     anticipates that marketing of the Blood Bank module  will
     resume.  See "Risk Factors - Regulation".  The Company is
     marketing and installing the Hemocare product from
     Mediware Information Systems, Inc.  The Hemocare system
     is interfaced with the FlexiLab product.
     
     The Lab Access 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.
     
     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.

                                   3
<PAGE>
     
     The Anatomic Pathology module is designed to manage
     specimens and reports, including reports for surgical
     pathology and cytology.  The main features of this module
     are the archiving and retrieving of patient records.  For
     example, the pathologist, while examining specimens, can
     automatically retrieve historic specimen results
     including previous tissue diagnoses, thereby improving
     the timeliness and quality of patient care.  The module
     supports special cytology reports, such as pap smear
     reports.  The Company is no longer actively marketing and
     selling this product but continues to support those sites
     that are currently using the Anatomic Pathology module.
     Sunquest is marketing and selling CoPathPlus ("CoPath")
     developed by Dynamic Healthcare Technologies, Inc.
     CoPath is interfaced with the FlexiLab system.

  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 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.
  

  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.

                                   4
<PAGE>
  
  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.
  
  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.


Commercial and Medical Reference Laboratory Systems

      Antrim, a wholly owned subsidiary of Sunquest, offers
laboratory information systems for the commercial laboratory
marketplace.  Antrim's primary product suites, Answers
Laboratory and Answers Finance, combine to provide total
solutions for customers ranging from small hospital outreach
programs to large commercial reference laboratories.

  Antrim Clinical Systems
  
     Antrim's General 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, sent electronically or printed remotely.  Automatic
     report scheduling with client specific features provides
     for prompt and accurate reporting.
     
     The Antrim Paperless Microbiology product is fully
     integrated with the General 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.
     
     Antrim's Anatomic Pathology product is available for
     laboratories providing pathology and cytology service.
     The product uses the same flexible ordering, reporting,
     and customer service features that distinguishes Antrim's
     other products.

                                   5
<PAGE>

     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 of Medicine ("Snomed") coding, with
     accompanying management reports for data analysis.  QA
     reporting is also available to correlate results and
     document any discrepancies detected.
  
  Antrim Financial Systems
  
     The Answers Finance product suite provides the tools
     needed to manage the laboratory business including
     General Ledger, Accounts  Receivable/Billing, Accounts
     Payable, Materials Management and Electronic Claims/EDI.
  
     The General Ledger application is the core product of
     the Antrim Financial product suite.  The system is
     designed to provide complete management of financial
     information and is fully integrated with all components
     of the Antrim Financial product suite.
     
     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 Sunquest FlexiLab system and General Laboratory,
     as well as the laboratory information systems of other
     companies.
     
     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 offers the ability to
     manage the supplies inventory of the laboratory.
     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.
     
     In addition, Antrim has repackaged its Answers Finance
systems as a Small Business Solution ("SBS") for the broader,
small- to medium-sized laboratory market.  SBS incorporates
standardized code and many of the same Antrim features that enable large

                                   6
<PAGE>

commercial laboratories to process and manage hundreds of thousands of
orders per day, but is sized to meet smaller operators' requirements.


Integration and Connectivity

      Sunquest estimates that it has installed in its LIS
client base over 11,000 interfaces that were developed for
nearly 700 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.

  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.


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, fax 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.
  
  
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 value added remarketer ("VAR")
agreements, joint marketing agreements and licensing
agreements with other vendors.

      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

                                   7
<PAGE>

negotiated directly between the supplier and
the customer or agreements where Sunquest acts as an
intermediary in negotiating the support agreement.

Anatomic Pathology (Departmental Clinical Suite)  In February
1997, the Company entered into a VAR agreement with Dynamic
Healthcare Technologies, Inc. ("Dynamic") to relicense the
Dynamic anatomic pathology product. The agreement grants  the
Company a non-exclusive license to modify, interface, market,
sublicense, support and otherwise use the Dynamic software
program known as CoPathPlus ("CoPath") which is a computer
clinical information system used in surgical pathology,
cytology and autopsy.

Blood Bank (Departmental Clinical Suite) In February 1999, the
Company entered into a Marketing Reseller agreement with
Mediware Information Systems, Inc. ("Mediware") to relicense
the Hemocare blood bank management system.  The agreement
grants the Company a non-exclusive license to market the
Mediware software program known as Hemocare, which is a
computer clinical information system, used in hospital and IDN
blood banks.

Integration Server (Clinical Data Management Suite)  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.


PRODUCTS UNDER DEVELOPMENT

      The following products are under development utilizing
the same client-server architecture as the Company's existing
systems.  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 "Risk 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 outpatient system deals with retail
pharmacy functionality and is currently under development.
Its core functionality is derived from the Meditrust
application licensed by Sunquest in November of 1997.

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.

                                  8
<PAGE>

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.

Lab Data Network ("LDN")(Clinical Data Management Suite) is an
open architecture system comprised of numerous component
solutions to address the laboratory alliance and consolidation
trends in the health care industry.  The LDN system will
enable disparate lab systems within a health care network to
send orders, specimens and results to each other and to a
central lab data repository.  "Core Labs" and "Centers of
Excellence" models can be effectively automated with the LDN
system.   The outreach client base can also be provided with
results views from the lab data repository populated by
disparate lab systems.

Departmental System Enterprise Viewer (Clinical Data
Management  Suite) will be an operating environment for
information management.  The Departmental System Enterprise
Viewer product will support flexible results display, enable
clinical decision-making, and will be the medium for orders
communication. Data can be presented as spreadsheets, graphs,
and/or text, as well as in icon-based summaries.  Views can be
presented for trending of results for one encounter or across
encounters and will allow providers to "drill down" for more
detailed results information.  The system will be "web
enabled" to provide a uniform "look and feel".


RECENT DEVELOPMENTS

      On March 29, 1999, the Company entered into a software
asset purchase and sales agreement with New Era of Networks,
Inc. ("NEON") whereby NEON purchased all right, title and
interest in the software known as version 1.0 of the
Enterprise Master Patient Index ("EMPI").  The EMPI product
permits the linkage of patient information even if the
information originated in disparate information systems
throughout an enterprise.

    Simultaneously, the companies amended a previous
agreement which will give Sunquest a non-exclusive right and
license to embed NEON's Transaction Distribution Manager
product ("TDM").  TDM is a product that greatly simplifies the
task of performing inter-application data interchange.  In
addition, Sunquest received reseller rights to sublicense and
market the EMPI product when used in conjunction with one or
more other software products or services proprietary to
Sunquest or its subsidiaries.  Sunquest plans to resell EMPI
and future enhanced versions developed by NEON when providing
its clinical suite systems or its Lab Data Network product
offering.

      Sunquest anticipates that related to these transactions
it will record a pre-tax gain on the sale of assets of
approximately $680,000 in the quarter ending March 31, 1999.


YEAR 2000 COMPLIANCE

      The Year 2000 issue is the result of computer programs
being written using two digits rather than four to define the
applicable year.  Any of the Company's software programs,
whether sold as products of the Company or used internally,
may recognize a date using "00" as the year 1900 rather than
the Year 2000.  This could result in a system failure or
miscalculations causing disruptions of operations, including,
among other things, a temporary inability to process
transactions, send invoices, or engage in similar normal
business activities.

                                   9
<PAGE>

      Based on a current assessment, the Company believes that
virtually all of the current releases of its products are Year
2000 compliant, and with respect to those that are not, the
Company anticipates releasing Year 2000 compliant versions by
the end of the first quarter of 1999.  The Company plans to
release a Year 2000 compliant version of its IntelliCare
software in October of 1999 for the one customer using the
IntelliCare system.  The Company believes that the costs
incurred to make its products Year 2000 compliant will be
immaterial.  The Company plans to have all clients converted
to Year 2000 compliant versions of its products by October
1999.  Pursuant to contract terms, clients are obligated to
cooperate with the Company in the installation of system
enhancements, including the current Year 2000 compliant
versions.  As of December 31, 1998, approximately 94% of the
Company's clients were using or installing Year 2000 compliant
versions of its products.
     
     The Company is also assessing the Year 2000 readiness of
its third-party suppliers and business partners.  Although the
Company believes that these third-party suppliers and business
partners are taking appropriate action to ensure that their
products are, or will be, Year 2000 compliant, failure by such
suppliers and business partners to adequately address  their
Year 2000 readiness could affect the Company's business.  The
Company continues to review the Year 2000 readiness of its
third-party suppliers and business partners.

     Although the Company expects all of its products and
systems to be Year 2000 compliant and all clients to have
installed Year 2000 compliant versions of its products before
December 31, 1999, it cannot predict with complete accuracy
the outcome of its Year 2000 program.  If its Year 2000
program is not successful or if the systems of suppliers and
clients  material to the Company fail or malfunction in the
Year 2000, the Company's business, financial condition or
results of operations may be adversely affected.

      The Company has determined that a portion of software
programs developed by other vendors and utilized internally
will require upgrades to new versions to properly utilize
dates beyond December 31, 1999.  After reviewing the plans of
these vendors, the Company believes that the upgrades to such
software programs will be completed by the fourth quarter of
1999.  The cost of Year 2000 compliant software related to
systems developed by other vendors and used internally is
included in the related software maintenance agreements.  The
Company believes that consulting costs incurred in
accomplishing the installation of Year 2000 compliant software
will be immaterial.

     Efforts by clients to address their Year 2000 issues may
absorb a significant portion of their information technology
budgets in the near term and may cause them to either delay or
accelerate the purchase and implementation of new applications
and systems.  While these purchasing decisions may increase
demand for certain of the Company's products and services,
including its Year 2000 offerings, it could also decrease
demand for other offerings.  The outcome of these purchasing
decisions could affect the Company's revenues or change its
revenue patterns.


CLIENT SERVICES

      At December 31, 1998, the Company's client services
section employed approximately 482 professionals who provide
implementation, application and system support, education and
consulting services to the Company's clients.  The client services

                                  10
<PAGE>

section primarily employs medical technologists and
other health care professionals in supporting and implementing
clinical information systems.  Computer professionals to
support complex IDNs complement these personnel.  Client
services employees attend rigorous training including, where
required, a formal nine to 12-month initial training program
to comply with the Company's certification requirements.

      Sunquest utilizes a "train the trainer" philosophy to
educate its clients.  This training consists of a structured
process of project management and education with flexible
schedule options, with training held at both Company and
client sites.  Additional client education services are
provided through computer-based training or formal ongoing
educational courses and regional seminars.

     System conversion, instrument training and operations
training are included in the Company's post-implementation
program.  Each client is assigned a support analyst who
understands how the software has been tailored for the client
and how best to provide ongoing support.  Full application and
systems support coverage is available from the Company's "help
desk" 24 hours a day and seven days a week.  Experts in each
area provide instrument and application interfaces, devices,
operating system and hardware support.  The Company uses
outside consultants and self-administered surveys to
continually assess the quality of its services.  In addition,
Sunquest uses a call tracking system to provide on-line
project status reports and on-line support, and facilitate
shift-to-shift continuity.

      Sunquest also provides consulting services to assist
clients in analyzing and implementing strategic organizational
changes, such as planning an IDN expansion program,
reengineering departmental processes, and establishing new
commercial laboratories.   Upon request, the Company also
provides custom programming services to customers on a fee-for-
service basis.

      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.  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.


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 4,000 commercial and medical reference
laboratories in the United States.  The Company also markets
its systems and services to the approximately 600 hospitals in
the United Kingdom, Scandinavia and throughout Europe 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, the
Antrim User Group meetings, direct mail campaigns,
telemarketing and advertisements in trade journals.

                                  11
<PAGE>

      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 three divisions: (i) North American which is
divided into two areas, Western and Eastern, offering all of
the Company's clinical products; (ii) European Sales, offering
the Company's systems in the United Kingdom and  Europe; and
(iii) Antrim Sales, offering commercial and medical reference
laboratory systems.  At December 31, 1998, the Company
employed a sales and marketing force of approximately 104
individuals.


TECHNOLOGY

     Sunquest's clinical products operate on terminals, Intel-
based PC systems, IBM RS6000 and a variety of Digital
Equipment Corporation ("DEC") server systems.  Users access
the Company's applications using IBM compatible PCs and/or
terminals.  The FlexiLab and FlexiRad products are offered on
both IBM and DEC platforms.  The FlexiMed product is offered
on the IBM RS6000 platform.  Antrim's suite of products is
offered on IBM RS6000 and DEC platforms.

      The Company utilizes the M computer language (also known
as "MUMPS" or "Massachusetts General Hospital Utility  Multi-
Programming System") in the development of its laboratory and
radiology clinical systems as well as Microsoft's Visual C++,
Visual Basic and SQL-Server database for its newer modules.
FlexiRad is a completely client-server system while the
FlexiLab system  uses both client-server and  terminal  based
modules.  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
Windows 95 for the client operating system.  Antrim has
developed all its information systems in the M language.

      Sunquest is migrating its laboratory and radiology
clinical systems to new technology by developing the object-
oriented presentation layer and client-base  business logic
layer so that M-based data structures, relational data
structures and object database structures (all residing on the
server) 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 release management methodology.  This
process includes on-going analysis of the marketplace,
determination of users' requirements,
    
                                  12
<PAGE>

preparation of design specifications, and usability testing to
ensure that new systems meet clients' standards.

      Sunquest's product development managers are responsible
for product architecture, improvements to existing products,
construction verification and inspection.  The Company's
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, 1998, approximately 198 product development
engineers were assigned to improving and extending the
Company's existing systems and approximately 26 engineers were
assigned to the development of products in new product areas.

      In 1998, 1997 and 1996, the Company's research and
development expenses before capitalization of software
development costs totaled approximately $18.5 million, $16.9
million and $12.8 million, respectively.  See "Risk 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, product architecture, functionality and
features, ease of use, rapidity of implementation, quality of
client support, 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 "Risk 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 same extent as do laws in
the United States.  It is the Company's policy to require employees,

                                   13
<PAGE>

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.

      The trade name Sunquest and other marks used by Sunquest
in its business, such as FlexiLab, have 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.  The trade name Antrim and other marks
used by Antrim in its business, such as Answers, have also
been registered with the United States Patent and Trademark
Office.  In addition,  FlexiRad and  FlexiMed, among other
marks, are trademarks of Sunquest and Sunquest Pharmacy,
respectively.  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, 1998, the Company had a total contract
backlog of $122.0 million, which consisted of $61.1 million of
system sales and $60.9 million of support and services.  At
December 31, 1997, total contract backlog was $99.5 million,
which consisted of $49.3 million of system sales and $50.2
million of support and services.   System sales backlog
consists of the unearned amounts of signed contracts which
have not yet been recognized as revenues.  Support and service
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 accommodate clients' needs and since
installations typically require eight to 15 months to
complete.

                                  14
<PAGE>

EMPLOYEES

      As of December 31, 1998, the Company had 899 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 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

                                  15
<PAGE>

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 and Year 2000 compliant software.  An inability
to accomplish this migration or any significant delay in such
migration 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 or its Clinical Data Management suite of
products, and HCIS enhancements successfully or the failure to
respond effectively to technological changes 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, product architecture, functionality and
features, ease of use, rapidity of implementation, quality  of
client support, 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.

      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.  During 1997,
the Company identified a trend toward longer sales and
installation cycles with integrated delivery network
customers.  Any continuing trend of delays in progress toward
completing a material system installation or a number of
smaller installations could reduce the revenues recognized in
any given period and could have a material adverse effect on
the Company's business and results of operations.  Because a
significant percentage of the Company's expenses, particularly
employee compensation, is relatively fixed, variations in the
timing of system sales,

                                  16
<PAGE>

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.

     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.
     
     Under an FDA 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 established registration, device listing, premarket
notification or 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 Company believes that the laboratory information
systems are likewise exempt.  However, 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.
     
     During a GMP inspection that was conducted by the FDA and
completed in February 1998, the FDA representatives informed
the Company that its LISs might be subject to regulation,
although the agency made no formal determination to this
effect.  The Company believes its LISs are not subject to
active regulation but instead are exempt under the principles
announced in the FDA's 1989 draft policy in the same manner as
its HISs and pharmacy information management systems.  If the
FDA should issue a formal determination, to the industry
generally or the Company specifically, that the Company's LISs
are subject to active device regulation, the Company will be
required to comply with the applicable device regulatory
requirements.
     
     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 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

                                  17
<PAGE>

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, which is pending FDA review.  The Company's
ability to sell, promote, and install its Blood Bank product
is contingent upon FDA clearance of the 510(k) notification.
There can be no assurance as to when, if at all, such FDA
clearance will be obtained.  Compliance with the premarket
notification and other device regulatory requirements could be
costly and could delay or preclude the introduction of certain
new products.
     
     Based on the FDA's December 1998 letter and pending
completion of current discussions with the FDA, sales,
promotion, and new installations of the Company's Blood Bank
product were suspended, although the Company has continued 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.  The Company is unable to determine
at this time the effect, if any, that the marketing
restrictions on the Blood Bank product may have on its
business.  To provide an alternative to the Blood Bank
product, the Company has entered into a reseller agreement to
offer the Hemocare blood bank information system product,
which is manufactured by Mediware Information Systems, Inc.  A
510(k) notification for Hemocare has been cleared by the FDA.
     
     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 is still ongoing.

     Antrim has discontinued marketing and support for its
Answers Blood Bank product, and has withdrawn its 1996 FDA
510(k) notification.

       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 its 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;  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.

                                  18
<PAGE>

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 77.3% 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 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.

      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 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.

       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

                                  19
<PAGE>

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 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, the President and Chief
Executive Officer of the Company, the 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

                                  20
<PAGE>

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 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 26, 1999,  is set forth below.

     Name             Age              Position
     ----             ---              --------
Sidney A. Goldblatt    64     President, Chief Executive
                              Officer and  Chairman of
                              the Board
Mark J. Emkjer         43     Chief Operating Officer
Nina M. Dmetruk        46     Executive Vice President-
                              Chief Financial Officer,
                              Secretary, Treasurer and
                              Director
James F. Garliepp      47     Executive Vice President-
                              Chief Technology Officer
Ivan G. Boyd           44     Senior Vice President-
                              Sales and Marketing
Joanna S. Broder       55     Senior Vice President-
                              Client Services

      Sidney  A. Goldblatt, M.D., a co-founder of the Company,
has been President of the Company since 1986, Chief Executive
Officer since December 1994, and a director of the Company
since its formation in 1979 and Chairman of the Board  since
1987.  Dr. Goldblatt also served as 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 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.

                                  21
<PAGE>

     James F. Garliepp has been Executive Vice President-Chief
Technology Officer since September 1991.  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.

      Joanna S. Broder has been Senior Vice President-Client
Services since March 1997.  From January 1995 until she joined
the Company, Ms. Broder was employed by AT&T Government
Markets, a telecommunications company, where she served as
Assistant Vice President, Collaborative Solutions.  From
November 1989 to November 1994, Ms. Broder was employed by
Digital Equipment Corporation, a computer manufacturing
company, where she served as Program Manager.

      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 $98,437 and
expires in September 2001.  The Company occupies approximately
59,000 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 $73,718 and expires in May 2004.  Sunquest
receives monthly rental payments under the subleases totaling
approximately $18,618.  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 $27,525 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 $61,206 and expires in May

                                  22
<PAGE>

2001.  Antrim receives monthly rental payments under a
sublease totaling approximately $6,000.

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

      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.

     On July 30, 1998, the Company instituted a civil action
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 all of
the outstanding capital stock of Antrim Corporation from The
Compucare Company on November 26, 1996.  The Complaint seeks damages
substantially in excess of $75,000.

     The Company is or may be subject to legal proceedings and
claims covering a wide range of matters that arise 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, 1998.

                                  23
<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
-------------------------------------------
1998
  First quarter          $12.375   $ 7.875
  Second quarter         $11.000   $ 6.750
  Third quarter          $12.375   $ 7.250
  Fourth quarter         $15.000   $ 6.875

                             Price Range
         Period            High       Low
-------------------------------------------
1997
  First quarter          $17.625   $ 9.750
  Second quarter         $15.750   $ 8.125
  Third quarter          $17.175   $10.500
  Fourth quarter         $15.000   $ 6.500

     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 19, 1999, there were 36 holders of record of the
Common Stock, and the Company believes that on that date there
were in excess of 900 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, 1998 (the "Annual  Report") and such
information is incorporated herein by reference.


ITEM 7. MANAGEMENTS'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.

                                  24
<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, 1998, the Company had
total short-term investments of $27.3 million.  Assuming a 10%
increase in interest rates on the Company's short-term
investments (i.e., an increase from the December 31, 1998
weighted-average interest rate of 4.09% to a weighted-average
interest rate of 4.50%), the fair value of these investments
would decrease by approximately $761,000.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

      The financial statements, together with the report
thereon of Ernst & Young LLP dated February 5, 1999, 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 1999 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.

                                  25
<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 5, 1999

        Consolidated Balance Sheets as of December 31, 1998 and 1997

        Consolidated Statements of Income and Comprehensive
        Income for the years ended December 31, 1998, 1997 and
        1996

        Consolidated Statements of Shareholders' Equity for
        the years ended December 31, 1998, 1997 and 1996

        Consolidated Statements of Cash Flows for the years
        ended December 31, 1998, 1997 and 1996

        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)

     10A   Profit Sharing Plan, as amended December 28, 1994,
           together with Profit Sharing Trust Agreement. (1) (2)

     10A.1 Profit Sharing Plan, as amended December  31,1997. (2) (4)

     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)

                                  26
<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) (4)
     
     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. (5)

     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. (4)

     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) (3)

     13.1  Financial Information Section of Annual Report to
           Shareholders for 1998. (3)
     
     21.1  Subsidiaries of the registrant. (3)

                                  27
<PAGE>

     23.1  Consent of Independent Auditors, dated March 26, 1999. (3)

     27.1  Financial Data Schedule for the year ended December 31, 1998. (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, 1997.

     (5)  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, 1998.


                                  28
<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 29, 1999.

                    SUNQUEST INFORMATION SYSTEMS, INC.
                              (Registrant)

                    By:  /s/ Sidney A. Goldblatt
                         _____________________________________
                         President and 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     President and Chief Executive       March 29, 1999
________________________     Officer (Principal Executive
 Sidney A. Goldblatt         Officer) and Director

/s/  Nina M. Dmetruk         Executive Vice President and        March 29, 1999
____________________         Chief Financial Officer
 Nina M. Dmetruk             (Principal Financial and
                             Accounting Officer) and Director

/s/  Richard W. Barker       Director                            March 29, 1999
______________________
 Richard W. Barker

/s/  Larry R. Ferguson       Director                            March 29, 1999
______________________
 Larry R. Ferguson

/s/  Peter P. Gombrich       Director                            March 29, 1999
______________________
 Peter P. Gombrich

/s/  Curtis S. Goldblatt     Director                            March 29, 1999
________________________
 Curtis S. Goldblatt

/s/  Stanley J. Lehman       Director                            March 29, 1999
______________________
 Stanley J. Lehman

                                   29
<PAGE>

              Sunquest Information Systems, Inc.
                               
       Form 10-K For Fiscal Year Ended December 31, 1998
                  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. *

10A            Profit Sharing Plan, as amended December 28, 1994,
               together with Profit Sharing Trust Agreement. *

10A.1          Profit Sharing Plan, as amended December 31,1997. *

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. *

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 1998.

21.1           Subsidiaries of the registrant.

23.1           Consent of Independent Auditors, dated March 26, 1999.

27.1           Financial Data Schedule for the year ended December 31, 1998.

___________________
* Incorporated by reference.