October 30, 2014

Kaiser and IBM – a long history

"Thomas J. Watson, president of IBM, with Mrs. Watson, watch Dora Stewart of Vancouver print checks while Glen A. Rogers, IBM supervisor, looks on." The Bo's'n's Whistle (NW shipyards), 10/21/1943.

Kaiser Permanente is partnering with The Tech Museum of Innovation in San Jose (Calif.) on a new exhibit that shows how technology can help people understand and manage their total health. We've been sharing that message with our members for decades, and The Body Metrics exhibit makes it accessible to anyone.

But before Kaiser Permanente became a leader in electronic health records, even before Kaiser shipyard doctor Dr. Morris Collen first used an International Business Machines mainframe computer to analyze medical test results in the 1960s, Henry J. Kaiser relied on IBM to process payroll records in the WWII shipyards.

At the time, these behemoths weren’t even called computers – they were elaborate electromechanical devices called “machines.” In the Richmond yards, IBM assigned seven engineers to keep them in working order.

A historical image from 1943 working on a large printer.
"E.M. Bousfield, IBM customer engineer, working on intricate insides of a collator. There are 17 miles of wire in this baby." Fore'n'Aft, 12/3/1943.

The use of punch cards to process simple alphanumeric data began with the 1890 U.S. Census, and was a success. This led to the Tabulating Machine Company, founded in 1896, and then the Computing-Tabulating-Recording Company (IBM’s precursor) in 1911. In 1928, IBM introduced an updated version of the punch card with rectangular holes and 80 columns, which became the industry standard for years to come.

The Richmond shipyard magazine Fore ‘n’ Aft described the complicated payroll calculation process in July, 1943:

Six days a week the time checkers and IBM thrive on the sticky detail of keeping track of the thousands of men who work on

Richmond ships, breaking the man hours down according to each job, and compiling tax and security reports for Uncle Sam. It takes about one man in each hundred hired to keep track of the other ninety-nine.

An electric accounting machine-familiarly called a "printer" by IBM operators is just one step short of a robot. On the basis of intricate telephone-like lines hooked up to a board on the left side of the machine, it will do virtually anything but think.

The field time checker turns in cards marked with hours worked by workmen. The time office force sorts them by number, and posts earnings in a board control book, sends cards to the IBM operators in neatly wrapped bundles of 500. IBM gang punches the cards with holes corresponding to rate and hours worked, then sorts them by badge number of each workman, files them away for a week. At week's end, six daily time cards are translated into a single master time card from which your paycheck is written.

A 1943 black and white image of a man holding up the inside of an electronic printer for display
"The fantastic 'brain' of an IBM machine which performs the calculating is displayed by R.L. Gagne, IBM assistant supervisor." The Bo's'n's Whistle, 10/21/1943.

Further steps involved printing out the paychecks on a continuous fold form and delivering them to the paymaster’s office, where the checks were mechanically signed. Finally, the checks were sorted according to badge number, trimmed out to individual pay stubs (thus the expression “cutting a check”), and taken to payroll booths for distribution.

IBM and KP would maintain a strong relationship over the years. In 2001, Dr. Collen recounted this story to Kaiser Permanente contract historian Steve Gilford:

IBM made all their money in punch cards and then eventually got into computers. We got some of their early systems, 1440’s [for early efforts to process medical data]…Relevant to that is that [Thomas J.] Watson Jr., the son who took over IBM, came through and made rounds [during the late 1960s].

I wanted to get him to put up money to go into the overall system.  I remember telling him, “If you support this, it will be good for you, good for us, and IBM will stand instead of for International Business Machines, they’ll be called International Blessed Machines.”  He laughed but nothing ever came of it although eventually we did develop contracts with them.