NEW ORLEANS - One of the most-hyped developments in digital image management over the past year has been the rise of the application service provider (ASP) model. Vendors are touting the ASP approach as a solution that’s tailor-made for healthcare facilities that want to adopt PACS without the pain of a huge up-front investment.
But ASPs may not be for everyone, and facilities considering the ASP approach should do their homework first. That’s the conclusion of a panel Wednesday morning at this week’s Healthcare Information and Management Systems Society (HIMSS) meeting in New Orleans.
The ASP model changes the information technology management process by locating software and key services at a remote site -- often one that is maintained by a vendor that contracts with the client. The vendor is responsible for managing the IT infrastructure, and the client typically pays for service on a per-unit basis. The approach is already common in other industries, such as finance and insurance.
In the Wednesday panel, Phil Drew of Concord Consulting Group in Concord, MA, advised potential ASP adopters to first determine if PACS is right for them based on a comprehensive financial analysis. If the answer is yes, they should compare the operating costs of an ASP model to what a facility might spend if it simply bought a PACS through the traditional capital equipment acquisition process.
Using a hypothetical 200-bed hospital as a model, Drew determined that a conventional PACS for the facility would probably cost about $2.2 million, assuming that it produced 100,000 exams a year generating 2.5 terabytes of data. Locating all of the PACS functions off-site with an ASP would probably cost $11 per exam, he said, a figure that can be compared to the per-unit cost proposed by an ASP.
Based on his analysis, Drew believes the ASP approach makes the most sense for small and medium-sized facilities. It's important to remember that ASPs require extremely fast data transmission lines -- even a dedicated T1 line is too slow. At the hypothetical 200-bed hospital, it would take seven or eight hours to transmit a day’s image data to an off-site archive over a T1. Get a T3 line, he advised.
A larger facility’s experience with ASPs was provided by Patricia Whelan, senior IT manager for the radiology department at Massachusetts General Hospital in Boston. Whelan advised potential ASP purchasers to be as specific as possible in their negotiations with a potential vendor partner. "Be sure you know what you are getting," she said.
MGH has its own PACS network in place, but the institution began considering the ASP approach due to the heavy demands being placed on its archive. The facility uses 10 TB of storage a year, an amount that is quickly filling MGH’s digital linear tape (DLT) archive.
Uptime guarantees should be incorporated into any ASP contract, she said, with specific financial penalties included if targets aren’t met. To ensure compliance, the ASP vendor must have the tools in place to measure system performance and uptime.
"Performance metrics are the most important things to measure your success," she said.
Whelan echoed Drew’s comments on the need for facilities to conduct a cost analysis with a conventional PACS to determine if the fit is right. Like Drew, she believes ASPs are particularly well-suited for small and mid-sized facilities.
Institutions looking at ASPs shouldn’t be blinded by market hype, advised John Glaser, vice president and chief information office at Partners HealthCare System in Boston. Just because a vendor is an ASP doesn’t mean that it's competent, or that its applications function well, he said.
Glaser believes ASPs are a manifestation of a revolution sweeping the general IT industry -- a revolution that's making the physical location of applications and services irrelevant. As a general rule, healthcare institutions should adopt practices that reflect this trend, he said.
ASPs can also help healthcare facilities shift their costs from the capital budget to the operating budget, which also reflects a long-term trend toward the consideration of IT as an operating expense rather than a capital expense.
Ultimately, the ASP decision depends on how well the ASP model fits the institution's financial capabilities, and whether its functionality meets the institution's needs.
"It gets back to the age-old issue of 'what does it do and what does it cost?'" Glaser said.
By Brian CaseyAuntMinnie.com staff writer
February 8, 2001
Related Reading
Comdisco enters ASP storage marketplace, November 29, 2000
DLT, MOD have different strengths in PACS storage; more choices on the way, September 19, 2000
GE readies launch of PACS application service provider program, July 19, 2000
PACS veteran offers real-world lessons to PACS implementation, July 3, 2000
Algotec pursues ASP model in bid for PACS market success, May 5, 2000
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