<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------------
FORM 11-K
---------------------------------------
ANNUAL REPORT
Pursuant to Section 15 (d) of the
Securities Exchange Act of 1934
For the Year Ended December 31, 1994
---------------------------------------
Commission File #0-7416
---------------------------------------
SHARED MEDICAL SYSTEMS CORPORATION
RETIREMENT SAVINGS PLAN
---------------------------------------
SHARED MEDICAL SYSTEMS CORPORATION
51 VALLEY STREAM PARKWAY
MALVERN, PENNSYLVANIA 19355
----------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustee
(or other persons who administer the plan) has duly caused this annual report to
be signed by the undersigned thereunto duly authorized.
SHARED MEDICAL SYSTEMS CORPORATION
RETIREMENT SAVINGS PLAN
DATE: June 13, 1995 BY: /s/ Edward J. Grady
------------- -------------------------
Edward J. Grady
Chairman, Administrative Committee
The total number of pages contained in this report is 13.
--
<PAGE>
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
RETIREMENT SAVINGS PLAN
-----------------------
INDEX TO FINANCIAL STATEMENTS, NOTES AND SCHEDULES
--------------------------------------------------
<TABLE>
<CAPTION>
PAGE
REFERENCE
---------
<S> <C>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 3
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS -
DECEMBER 31, 1994 and 1993 4
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1994 5
NOTES TO FINANCIAL STATEMENTS 6
SCHEDULE OF ASSETS HELD FOR INVESTMENT -
DECEMBER 31, 1994 10
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1994 11
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS 13
</TABLE>
2
<PAGE>
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee
Shared Medical Systems Corporation
Retirement Savings Plan:
We have audited the accompanying statement of net assets available for benefits
of Shared Medical Systems Corporation Retirement Savings Plan as of December 31,
1994 and 1993, and the related statement of changes in net assets available for
benefits, with fund information, for the year ended December 31, 1994. These
financial statements and the schedules referred to below are the responsibility
of the Administrative Committee (Management). Our responsibility is to express
an opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
Management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Shared
Medical Systems Corporation Retirement Savings Plan as of December 31, 1994 and
1993, and the changes in net assets available for benefits, with fund
information for the year ended December 31, 1994, in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment as of December 31, 1994 and of reportable transactions for
the year ended December 31, 1994 are presented for purposes of additional
analysis and are not a required part of the basic financial statements, but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The fund information in the statement of net assets
available for benefits and the statement of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to present
the net assets available for plan benefits and changes in net assets available
for plan benefits of each fund. The supplemental schedules and fund information
have been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, are fairly stated, in all
material respects, in relation to the basic financial statements taken as a
whole.
/s/ ARTHUR ANDERSEN LLP
Philadelphia, PA
May 11, 1995
3
<PAGE>
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
RETIREMENT SAVINGS PLAN
-----------------------
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
-----------------------------------------------
(in thousands)
<TABLE>
<CAPTION>
DECEMBER 31
-------------------------
1994 1993
------------ -----------
<S> <C> <C>
CASH.............................................$ - $ 30
RECEIVABLES:
Participant Contributions...................... 971 878
Company Contributions.......................... 478 447
Dividends, Interest and Capital Gains.......... 63 59
PARTICIPANTS' LOANS RECEIVABLE................... 2,169 1,999
INVESTMENTS, AT FAIR VALUE:
SMS Common Stock............................... 8,883 6,239
Vanguard Money Market Trust.................... 7,522 6,621
Vanguard Fixed Income Securities Fund.......... 12,945 14,164
Vanguard Index Trust........................... 12,581 12,132
Vanguard W. L. Morgan Growth Fund.............. 10,851 12,037
Vanguard Windsor Fund.......................... 30,898 22,711
Vanguard Wellington Fund....................... 2,530 -
Company Contribution Fund...................... 920 697
------------ -----------
NET ASSETS AVAILABLE FOR BENEFITS............$ 90,811 $ 78,014
============ ===========
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
RETIREMENT SAVINGS PLAN
-----------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
---------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1994
------------------------------------
(in thousands)
<TABLE>
<CAPTION>
COMMON MONEY FIXED INDEX MORGAN
STOCK MARKET INCOME TRUST GROWTH
FUND FUND FUND FUND FUND
------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest and Dividends.............. $ 242 $ 267 $ 1,060 $ 365 $ 150
Capital Gain Distributions.......... - - 110 45 288
PARTICIPANTS' CONTRIBUTIONS............. 1,022 904 2,159 2,006 1,693
COMPANY CONTRIBUTIONS................... 176 155 352 311 290
PARTICIPANT REDISTRIBUTIONS............. (700) 30 (2,252) (1,492) (2,292)
NET REALIZED GAINS(LOSSES) ON
DISPOSAL OF INVESTMENTS............. 120 - (347) 1 (57)
UNREALIZED APPRECIATION(DEPRECIATION)
OF INVESTMENTS...................... 2,054 - (1,609) (217) (545)
DISTRIBUTIONS TO PARTICIPANTS........... (311) (382) (620) (582) (715)
PARTICIPANTS' LOANS ISSUED, NET OF
REPAYMENTS....................... 55 (87) (96) (8) (46)
------- ------- -------- -------- --------
NET INCREASE(DECREASE) IN PLAN ASSETS... 2,658 887 (1,243) 429 (1,234)
NET ASSETS AVAILABLE FOR BENEFITS:
BEGINNING OF YEAR................... 6,404 6,750 14,407 12,379 12,263
-------- -------- --------- --------- ---------
END OF YEAR......................... $ 9,062 $ 7,637 $ 13,164 $ 12,808 $ 11,029
======== ======== ========= ========= =========
<CAPTION>
COMPANY
CONTRI- PARTICI-
WINDSOR WELLINGTON BUTION PANT
FUND FUND FUND LOANS TOTAL
----------- ----------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest and Dividends.............. $ 1,117 $ 53 $ 24 $ - $ 3,278
Capital Gain Distributions.......... 1,730 3 - 2,176
PARTICIPANTS' CONTRIBUTIONS............. 4,601 315 - - 12,700
COMPANY CONTRIBUTIONS................... 729 47 - - 2,060
PARTICIPANT REDISTRIBUTIONS............. 4,489 2,217 - - -
NET REALIZED GAINS(LOSSES) ON 27 - - - (256)
DISPOSAL OF INVESTMENTS.............
UNREALIZED APPRECIATION(DEPRECIAT
OF INVESTMENTS...................... (3,115) (33) 220 - (3,245)
DISTRIBUTIONS TO PARTICIPANTS........... (1,223) (19) (24) (40) (3,916)
PARTICIPANTS' LOANS ISSUED, NET OF
REPAYMENTS....................... (40) 12 - 210 -
----------- ----------- --------- --------- -----------
NET INCREASE(DECREASE) IN PLAN ASSETS... 8,315 2,595 220 170 12,797
NET ASSETS AVAILABLE FOR BENEFITS:
BEGINNING OF YEAR................... 23,106 - 706 1,999 78,014
----------- ----------- --------- --------- -----------
END OF YEAR......................... $ 31,421 $ 2,595 $ 926 $ 2,169 $ 90,811
=========== =========== ========= ========= ===========
</TABLE>
The accompanying notes are an integral part of this statement.
5
<PAGE>
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
RETIREMENT SAVINGS PLAN
-----------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1994 and 1993
--------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
------------------------------------------
The accompanying financial statements have been prepared on the accrual
basis of accounting. Shared Medical Systems Corporation (the "Company") has
elected to file with the Securities and Exchange Commission financial
statements prepared in conformance with guidelines issued under the
Employee Retirement Income Security Act of 1974, as amended.
Investments of the Shared Medical System Corporation Retirement Savings
Plan (the "Plan") are presented in the statement of net assets available
for benefits at fair value.
Realized gains and losses are calculated by subtracting the value of the
assets at the beginning of the Plan year (if held on the first day of the
Plan year) or their acquisition date (if purchased during the Plan year)
from the proceeds received. Unrealized appreciation/depreciation of
investments is calculated by subtracting the fair value of the assets at
the beginning of the year, adjusted for assets purchased during the year
(valued on date of acquisition) and/or sold during the year (valued as
described above) from the fair value of assets at the end of the year.
Plan receivables reported on the statements of net assets available for
benefits have not been allocated on an individual fund basis. Therefore,
the December 31, 1994, fair values reported for each investment fund on the
statements of net assets available for benefits differ from the ending fund
balances reported on the statement of changes in net assets available for
benefits, but the statements agree in aggregate.
(2) DESCRIPTION OF THE PLAN:
------------------------
ELIGIBILITY
-----------
Employees of the Company, as defined in the Plan, are eligible to
participate in the Plan with respect to base contributions and employer
matching contributions (both as described below) on the first day of
employment, and with respect to employer profit-sharing contributions (also
described below) on the January 1 coincident with or following the first
day of employment. Approximately 4,266 employees were eligible to
participate in the Plan as of December 31, 1994.
PARTICIPATION
-------------
Base Contributions - Eligible employees may contribute, through salary
------------------
reductions, up to 15% of compensation, subject to certain limitations under
the Internal Revenue Code (the "Code"). The percentage of before-tax
contributions ("Base Contributions") by a participant is subject to
adjustment by the Company at any time to maintain the Plan's compliance
with the anti-discrimination requirements of the Code.
Employer Matching Contributions - The Company may match, through
-------------------------------
discretionary employer contributions, a portion of a participant's base
contribution in an amount to be determined annually by the Company's Board
of Directors. For the Plan years ended December 31, 1994 and 1993 the
Company contributed $2,060,000 and $1,659,000 respectively, in matching
contributions.
6
<PAGE>
Profit-sharing Contributions - The Company may make an employer profit-
----------------------------
sharing contribution as determined at the discretion of its Board of
Directors. Such contribution will be allocated in accordance with the Plan
document. For the Plan years ended December 31, 1994 and 1993 there were no
profit-sharing contributions.
Employee Stock Ownership Contributions - The Tax Reform Act of 1986
--------------------------------------
repealed the payroll-based tax credit allowed by the Code. As a result, the
Company has not made a contribution to the employee stock ownership portion
of the Plan (the "ESOP") for Plan years ended subsequent to December 31,
1986. Employer ESOP contributions made prior to January 1, 1987, were
invested in Shared Medical Systems Corporation Common Stock, and are
included in the Company Contribution Fund.
Vesting - All participants are fully vested in their base contribution
-------
account balances at all times. A participant becomes 20% vested in his
employer matching and employer profit-sharing contributions after three
years of service. A year of service is defined as a calendar year in which
the participant completes at least 1,000 hours of service. An additional
20% vests each year thereafter, with full vesting after seven years of
service. Forfeitures are used to reduce employer matching or employer
profit sharing contributions for the year in which the forfeitures occur.
Investment Directions - Participants may elect to have their base, employer
---------------------
matching, and profit-sharing contributions to the Plan invested in the
following funds, provided that each fund selected must receive a proportion
of not less than 10% of a participant's contribution:
Shared Medical Systems Corporation Common Stock: This fund invests
-----------------------------------------------
in Company common stock.
Vanguard Money Market Reserves Prime Portfolio: The objective of
----------------------------------------------
this fund is to seek maximum current income, preservation of
capital, and liquidity by investing in a portfolio of money market
instruments.
Vanguard Fixed Income Securities Fund Long-Term Corporate Bond
--------------------------------------------------------------
Portfolio: The objective of this fund is to provide a high level of
---------
current income, consistent with maintenance of principal and
liquidity, by investing in a diversified portfolio of long-term,
investment-grade bonds.
Vanguard Index Trust 500 Portfolio: The objective of this fund is
----------------------------------
to attempt to provide investment results that correspond to the
price and yield performance of publicly traded stocks, in the
aggregate, as represented by the Standard & Poor's 500 Composite
Stock Price Index.
W.L. Morgan Growth Fund: The objective of this fund is long-term
-----------------------
growth of capital by investing in a portfolio of common stocks.
Windsor Fund: The objective of this fund is long-term growth of
------------
capital and income by investing in a portfolio of common stocks. As
a secondary objective, the Fund also seeks a reasonable level of
current income.
7
<PAGE>
Wellington Fund: This fund is designed to provide conservative
---------------
investors with a prudent investment program with the following
objectives: a)conservation of principal; b)reasonable income return;
and, c)profits without undue risks.
In the absence of any written designation of investment fund preference,
the Trustee shall direct that all base, employer matching or employer
profit-sharing contributions received for any participant be invested in
the Vanguard Money Market Reserves Prime Portfolio.
Participants may reapportion their account balances among investments two
times during the year. The opportunity to reapportion account balances is
available in March, June, September, and December.
The Common Stock Fund and each Vanguard fund, with the exception of the
Wellington Fund which was added as an investment option of the Plan as of
April 1, 1994, individually represent more than 5% of the net assets
available for benefits of the Plan for the years ended December 31, 1994
and 1993.
Participant Loans - A participant may borrow the lesser of $50,000 or one-
-----------------
half of the vested balance of the participant's base contribution account
and employer matching contribution account, with a minimum loan amount of
$1,000. A participant may not have more than one loan outstanding at any
time. The participant may elect repayment terms of one to five years,
except that a loan used to acquire the participant's principal residence
may have a longer term. The interest rate charged for the term of the loan
is based on comparable market rates for secured loans with similar terms.
The interest rates as of December 31, 1994 and 1993 were 8.75% and 7.00%,
respectively.
Withdrawals - A participant may elect to make withdrawals of supplemental
-----------
contributions (after-tax contributions made to the Plan prior to January 1,
1989) in accordance with the Plan. After withdrawing all amounts credited
to his/her supplemental contribution account, the participant can withdraw
his/her remaining vested account balance in accordance with Plan provisions
for hardship withdrawals.
Distribution of Benefits - Upon termination of service due to death,
------------------------
disability, retirement, or other reasons, a participant shall be entitled
to benefits based on the net vested amounts in the participant's accounts.
The form of payment of these benefits is a lump sum distribution or
installment payments, in accordance with Plan provisions. As of December
31, 1994, there were no outstanding claims payable.
Termination of the Plan - The Company has the right under the Plan to
-----------------------
discontinue its contributions at any time and to terminate the Plan subject
to the provisions of ERISA. In the event of plan termination, affected
participants will become fully vested in their account balances and receive
a complete distribution in accordance with Plan provisions.
Administration of the Plan - The Plan is administered by the Administrative
--------------------------
Committee, which is appointed by the Board of Directors.
CoreStates Hamilton Bank, 100 North Queen St., Lancaster, Pennsylvania
17604, is the trustee for the Plan, and Towers, Perrin, Forster, and
Crosby, Centre Square West, 1500 Market Street, Philadelphia, Pennsylvania
19102 is the Plan recordkeeper. All costs with respect to services
performed for the Plan by CoreStates Hamilton Bank and by Towers, Perrin,
Forster, and Crosby, were paid by the Company.
8
<PAGE>
Custodian of Investments - CoreStates Hamilton Bank is the custodian for
------------------------
certain securities and assets of the Plan. Vanguard Group of Investment
Companies ("Vanguard"), a diversified mutual funds company with its offices
at 100 Vanguard Boulevard, Malvern, Pennsylvania 19355, serves as custodian
for the remaining securities and other assets of the Plan. All custodial
costs in connection with the Plan are paid by the Company.
(3) FEDERAL INCOME TAXES APPLICABLE TO THE PLAN:
-------------------------------------------
The Internal Revenue Service ruled in 1994 that the Plan, as amended and
restated effective January 1, 1989, continues to meet the requirements for
qualification contained in section 401(a) of the Code. The Administrative
Committee and legal counsel believe the Plan was designed and operated in
compliance with the applicable requirements of the Code. Accordingly, no
provision for Federal income taxes has been included in the accompanying
financial statements.
(4) SUBSEQUENT EVENT
----------------
Effective January 1, 1995, the Plan was renamed the Shared Medical Systems
Corporation Employee Stock Ownership Plan (the "PAYSOP"), and was amended
and restated to provide for the transfer of all net assets of the Plan,
other than PAYSOP account balances, to a new plan, the SMS Retirement
Savings Plan (the "New Plan"), which was established effective January 1,
1995.
All participant account balances, except for the PAYSOP, were transferred
to the New Plan, effective January 1, 1995. The New Plan is designed to
operate in a manner consistent with the prior Plan, and Vanguard will serve
as trustee, recordkeeper, and custodian of the net assets of the New Plan.
It is management's intention to terminate the PAYSOP effective January 1,
1995, and to distribute all participant account balances pending a
favorable determination by the Internal Revenue Service.
9
<PAGE>
ITEM 27 (a)
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
RETIREMENT SAVINGS PLAN
-----------------------
SCHEDULE OF ASSETS HELD FOR INVESTMENT
--------------------------------------
DECEMBER 31, 1994
-----------------
(dollars in thousands)
<TABLE>
<CAPTION>
IDENTITY OF ISSUE DESCRIPTION COST VALUE
- ----------------- ----------- -------- ---------
<S> <C> <C> <C>
Shared Medical Systems SMS Common Stock
Corporation ("SMS") 271,240 shares $ 5,110 $ 8,883
Vanguard Money Market Trust- Money Market Fund
Prime Portfolio 7,522 7,522
Vanguard Fixed Income Mutual Fund
Securities Fund 1,608,057 shares 13,359 12,945
Vanguard Index Trust Mutual Fund
292,781 shares 10,494 12,581
W. L. Morgan Growth Fund Mutual Fund
955,202 shares 11,207 10,851
Windsor Fund Mutual Fund
2,454,228 shares 32,411 30,898
Wellington Fund Mutual Fund
130,466 shares 2,563 2,530
Company Contribution Fund SMS Common Stock
28,102 shares 963 920
Participant Loans (interest rates ranging
from 7.0% to 8.75%) Loan Fund 2,169 2,169
-------- ---------
$ 85,798 $ 89,299
======== =========
</TABLE>
10
<PAGE>
ITEM 27 (d)
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
RETIREMENT SAVINGS PLAN
-----------------------
REPORTABLE TRANSACTIONS (1)
----------------------------
FOR THE YEAR ENDED DECEMBER 31, 1994
------------------------------------
(dollars in thousands)
<TABLE>
<CAPTION>
CURRENT
VALUE OF
ASSETS ON
PURCHASE SELLING COST OF TRANSACT NET GAIN
IDENTITY OF PARTY DESCRIPTION OF TRANSACTION PRICE PRICE ASSETS DATE (LOSS)
- ------------------------------- -------------------------- -------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Shared Medical Systems Purchase of 65,957 shares of
Corporation Shared Medical Systems
Corporation Common Stock (2) $1,727 $1,727 $1,727 -
Shared Medical Systems Sales and distributions of 45,457
Corporation shares of Shared Medical Systems
Corporation Common Stock (2) $1,254 $1,134 $1,254 $120
Vanguard Group of Purchases of 2,526,602 units of
Investment Companies Vanguard Money Market Trust
Fund $2,527 $2,527 $2,527 -
Vanguard Group of Sales of 1,625,612 units of
Investment Companies Vanguard Money Market Trust
Fund $1,626 $1,626 $1,626 -
Vanguard Group of Purchases of 461,612 shares of
Investment Companies Vanguard Fixed Income Securities
Fund $3,943 $3,943 $3,943 -
Vanguard Group of Sales of 389,827 shares of
Investment Companies Vanguard Fixed Income Securities $3,206 $3,553 $3,206 ($347)
Fund
Vanguard Group of Purchase of 62,610 shares of
Investment Companies Vanguard Index Trust $2,708 $2,708 $2,708 -
Vanguard Group of Sales of 46,619 shares of
Investment Companies Vanguard Index Trust $2,043 $2,042 $2,043 $1
</TABLE>
11
<PAGE>
ITEM 27 (d)
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
RTIREMENT SAVINGS PLAN
----------------------
REPORTABLE TRANSACTIONS (1)
---------------------------
FOR THE YEAR ENDED DECEMBER 31, 1994
------------------------------------
(dollars in thousands)
<TABLE>
<CAPTION>
CURRENT
VALUE OF
ASSETS ON
PURCHASE SELLING COST OF TRANSACTION NET GAIN
IDENTITY OF PARTY DESCRIPTION OF TRANSACTION PRICE PRICE ASSETS DATE (LOSS)
- ------------------------- -------------------------- -------- ------- ------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Vanguard Group of Purchases of 212,177 shares of
Investment Companies W. L. Morgan Growth Fund $2,467 $2,467 $2,467 -
Vanguard Group of Sales of 259,277 shares of W.L.
Investment Companies Morgan Growth Fund $3,051 $3,108 $3,051 ($57)
Vanguard Group of Purchases of 901,265 shares of
Investment Companies Windsor Fund $12,418 $12,418 $12,418 -
Vanguard Group of Sales of 79,749 shares of
Investment Companies Windsor Fund $1,143 $1,116 $1,143 $27
Vanguard Group of Purchases of 130,719 shares of
Investment Companies Wellington Fund $2,568 $2,568 $2,568 -
Vanguard Group of Sales of 253 shares of
Investment Companies Wellington Fund $5 $5 $5 -
CoreStates Hamilton Bank Purchases of 40,478,818 units of
Hamilton Money Market Fund $40,480 $40,480 $40,480 -
CoreStates Hamilton Bank Sales of 40,509,754 units of
Hamilton Money Market Fund $40,510 $40,510 $40,510 -
</TABLE>
(1) Transactions or series of transactions in excess of 5% of the current fair
value of Plan assets at the beginning of the Plan Year.
(2) This is also a party-in-interst transaction.
12
<PAGE>
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee
Shared Medical Systems Corporation
Retirement Savings Plan:
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated May 11, 1995, on the Shared Medical Systems
Corporation Retirement Savings Plan financial statements as of December 31, 1994
included in this Form 11-K, into the Company's previously filed Registration
Statement on Form S-8 (File No. 33-34089).
/s/ ARTHUR ANDERSEN LLP
Philadelphia, PA
May 11, 1995
13
