Although the term is not new, application service provider (ASP) is the latest buzzword in radiology. Generally, it refers to off-site, Web-based software and storage. In an ASP model, the user does not have the software loaded on his or her machine; rather, the application is hosted remotely. There have been recent developments for on-site ASPs; however, these usually are not considered to be true ASPs but are tossed into the ASP category because of the way the service is billed out. Typically, users pay for ASP arrangements based on a negotiated dollar amount per unit of service.

In radiology, the ASP concept includes Web-based software and storage solutions, but has expanded to include on-site as well as off-site equipment and storage. Hospitals and institutions are excited as much or more by the method of payment as they are by the location of the equipment off-site. Most ASPs charge hospitals for each examination that is completed and stored. In many cases an ASP will provide hospitals with a full PACS for a per-examination charge, operationalizing what would otherwise be a huge capital expense. Although operational costs might increase to accommodate the PACS, hospitals eventually can save money on film and printing supplies, and some believe that a large ASP, with many clients, might offer significant savings to users based on economies of scale.

Case Studies

What does ASP mean in practice? Conversations with two customers of one firm that offers both short-term on-site and long-term off-site storage for medical images revealed that the company operates a data storage center and a mirror site for backup. Clients also get 30 days of on-site storage. Images are sent to both the on-site redundant array of inexpensive disks (RAID) server and the off-site data center simultaneously. All images are available on demand using the company’s software. Images that are stored locally are available almost instantly. After 30 days, images are accessed from the data center, which may take slightly longer. The basic price structure: During the first year, it is $.30 a month per study. After the first year, it is $.02 cents a month per study. Over a 7-year period, each study costs $5.09 to store.

Dennis Dionne, at the Washington Hospital Center in Washington, DC, and Mark Leggett at Saratoga Hospital, in Saratoga, NY have been using the service for less than a year, so their experience is still very new and should be viewed accordingly.

Washington Hospital Center was just 2 months into its relationship when Dionne was interviewed in December 2000. The hospital conducts about 240,000 procedures a year. The radiology operations are sprinkled throughout the facility. The hospital is about 60% digital, according to Dionne, radiology administrator, but all digital modalities are not connected to a PACS, which means some data have to be transferred to the modality by the technician. The hospital uses modalities from many different vendors. To view studies, Washington Hospital Center uses a free DICOM viewer, and plans a significant investment in PACS over the next several years.

Why off-site archiving? “Someone who does this on a global basis has to be more efficient,” Dionne explains. He adds that offsite storage frees up real estate, eliminates the need to hire extra staff, and eliminates the problem of obsolescence. But the biggest factor that sent the hospital to look for an off-site storage solution was the cost. The hospital has set aside $1.8 million for PACS over the next several years; $500,000 of that money would be required for archiving. By operationalizing the archive expense, including the four dedicated T1 lines used to connect with the ASP provider, that $500,000 can be used to buy more digital modalities and connect them to the network. The hospital accepted the increased operating expenses associated with the ASP archival solution, because a full PACS will realize other savings. “We currently spend $750,000 annually on film,” says Dionne. “If we can cut that by 50%, we will be close to breaking even. The hardest transition will be during the middle years while we are still running some parallel systems.”

Installing the system entailed a bit of trial and error, but Dionne says the company handled the entire installation and had everything up and running within 3 weeks. So far, Dionne has had no complaints.

The Data dilemma

Mark Leggett, director of medical imaging, Saratoga Hospital, says he turned to an ASP because of a rapidly growing test volume, up 41% since 1996 and expected to grow at least another 25% over the next several years. The capital expense involved in scaling up on-site archiving was enormous. The hospital does about 75,000 studies annually. “The CIO and I spent a lot of time looking at this,” Leggett says. The hospital operates a PACS and is about to install a Web site that will provide access outside the hospital. The ASP vendor is providing a full year of on-site storage for Saratoga Hospital, far more than the usual 30 days. The hospital connects to the vendor using one-third of a T1 line operating as a virtual private network (VPN). The hospital estimates that it is already saving about $50,000 annually by eliminating its laser film. Leggett says the integration was relatively care-free. “Some fussing was involved, but the vendor took care of everything,” he says. “It ran a test box for about a month, then set up the final integration.”

Clearly, two sites with a few month’s experience with an ASP is not a large enough sample from which to draw conclusions. Both hospitals are still in the hopeful honeymoon stage with their application service provider. Further inquiries over the next several months will be reported. n

Keith J. Dreyer, DO, PhD, is vice chairman of radiology, computing and information services, Massachusetts General Hospital, Boston, and a Decisions in Axis Imaging News editorial advisory board member.