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SANTA CRUZ, Nov 08, 2009 (Santa Cruz Sentinel - McClatchy-Tribune Information Services via COMTEX) -- When Marjorie Hauser started a business in 1984 with an investment of $10,000, no one could foresee that the floppy disks she was selling would, after a decade, become obsolete.

Yet Hauser, who had experience running a clothing shop and selling real estate, has seen her $10,000 investment pay off.

Her company, Data Distributing, has adapted to the technological revolution, developing a software solution that puts a patient's medical records on a compact disc. Annual sales total $10 million.

The company has a database of 2,500 customers, most of them outside of Santa Cruz County, and was selected as a favorite by readers of Medical Imaging Magazine.

Hauser, 69, now chairwoman, and her two dozen employees celebrated 25 years with an invitation-only event at Peachwood's on Saturday.

Like others, the business has been hit by the recession. In boom times, there were 45 employees and sales were $15 million.

Yet the company is holding its own.

One reason is Hauser's philosophy that the customer is king; another is hiring people who hew to that philosophy.

"I always want the phone answered by third ring," she said.

Becky Hayslett, a picture archiving and communication systems administrator with Wellstar Health System in Georgia, chose the Santa Cruz distributor after looking at several competitors.

"Most of them had the same product," she said. "It was more the feeling you got from Data Distributing

that they supported their customer. They were very instrumental in helping us with the transition from film to digital."

At Data Distributing's Santa Cruz headquarters, a two-story office overlooking the San Lorenzo River, employees appreciate Hauser's management style.

"She's good at recognizing potential," said Elenor Shamie, 30, head of procurement, who worked her way up after starting as a part-time file clerk 11 years ago.

"It's so open and friendly, you can bring ideas to the table," said Jason Smith, 44, who oversees shipping and has been with the company since 2001.

"There hasn't been a shipping error in a year," Hauser noted.

Her decision in 1996 to hire her daughter-in-law, Nancy Fisher, is what led to Digital Secure Copy, the company's newest product.

Fisher, who had opened a second office in Irvine and earned a promotion to president in 2003, was talking with a medical records director who wanted X-ray film on a compact disc. She saw a need to be met.

"Mid-sized hospitals make on average 50-100 full chart copies per day," she said, "Copies that go to entities other than the patients themselves."

That includes lawyers, insurers, referring doctors, health care auditors and research companies.

"This is a huge waste of paper, toner, electricity, labor, et cetera for the hospital to fulfill this legal copy requirement," Fisher said.

Data Distributing's software solution, developed with a partner in India, was five years in the making.

"It was a big leap," said Hauser. "We had to do something that was innovative that was ours."

Putting medical records on a CD has become common, but it is not problem-free, according to Brian Casey, editor-in-chief of AuntMinnie.com, an online site for the radiology industry.

"The file formats can be different, CDs can actually carry viruses from other facilities," he said. "It's probably one of the biggest issues in digital image management right now."

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Jondi Gumz

Copyright (C) 2009, Santa Cruz Sentinel, Calif.

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