At the 1999 meeting of the Radiological Society of North America, talk of new and better ways to integrate picture archiving and communications systems (PACS) with radiology information systems reverberated from the conference rooms to the exhibition floor. This year, it is expected that much of the excitement at RSNA will be centered on the concept of application service providers (ASPs) and their potential to make PACS technology more widely useful.
Unfortunately, there is likely to be considerable confusion concerning the ASP model: what it is, what it can and cannot do, what each ASP vendor is providing, which organizations can benefit from it, and how it can best be used by each institution. In an effort to clarify the issues, Decisions in Axis Imaging News posed the following questions to Agfa Medical Imaging IMPAX? Solutions executives Robert Cooke, Vice President and Global General Manager, IMPAX Solutions; Douglas M. Tucker, PhD, Vice President, IMPAX Solutions NA; and Dean Kaufman, Director of Strategic Marketing, IMPAX Solutions NA.
Q? Decisions in Axis Imaging News: It seems that many radiologists and administrators are struggling to reach a common understanding of what the ASP model is (and is not). How are you defining it at Agfa IMPAX? Solutions?
A? Kaufman: We see ASP as simply services capability hosted from an off-site location. PACS is bringing radiology departments and imaging centers to the point where they can have easy, universal access to information crucial to operating in a successful manner. The ASP model enables centralization to replace the decentralization typical of so many enterprises, and it should allow centralization to be brought about quickly, easily, and effortlessly.
Cooke: In fact, most ASP models support some level of remote storage. Agfa’s model employs remote storage of data, completely integrated with the traditional IMPAX architecture. The IMPAX architecture is ASP-ready in that a number of our customers already use IMPAX to power an ASP model.
Tucker: ASP is not a new concept. There are a number of exciting, novel services and products that exist today because of this ASP mechanism. The ASP model potentially allows you to reduce the number of on-site devices needed to operate a PACS?and, therefore, the cost. Ultimately, the only equipment you should require are the workstations and the devices that connect them to the Internet or to your own intranet. Agfa is attempting to use ASP in the form of logical extensions of the existing PACS product line. These extensions are intended to increase system capabilities and the ability of Agfa fully and fluently to support customer needs, now and in the future, as those needs evolve due to changing staffing, financial, and other issues.
Kaufman: We see the ASP model as having the potential to deliver significant savings on both sides of the cost equation: the acquisition and the system’s management over the life of the system.
Tucker: ASP, I think, tends to be seen as a lifesaver for radiologists and technologists. These clinicians are health care delivery people. The management of information technology and information technology resources is not their primary job. They want to be free to focus on delivering care to their patients. ASP represents a means to unburden them of the technology-management issues.
Cooke: I would add that the increased attention to the ASP concept is driven by the high demand for talented information-technology staff. With an ASP, a customer outsources this requirement to the ASP provider. It provides the customer the opportunity to focus on its core business and scale its information-technology demands to its business growth (and at a rate consistent with business growth).
Kaufman: I agree. ASP clearly enables hospitals and clinical institutions to focus on their core competency of delivering health care. From a technology-capabilities standpoint, our goal is to be able to add mission-critical capability remotely while monitoring and managing that system better than the customer could. This is because Agfa and its partners have significant experience in the PACS and ASP environment.
Cooke: Health care and (more specifically) radiology are services, plain and simple. The widespread proliferation of PACS and digital radiology infrastructure, the explosive growth of the Internet and communications infrastructure, and the trend toward outsourcing have all contributed to the emergence of the ASP model for radiology.
Q? Axis Imaging News: What are the specific uses of an ASP in a PACS environment?
A? Kaufman: There are three main categories of ASP that relate to PACS. They are technology management, financial management, and outsourcing.
Tucker: The current applications that Agfa is offering are off-site storage of images and remote distribution of images via Internet and via intranet technology. Through Agfa’s technology partners, we will soon be able to host our customers’ PACSs remotely. For example, because ASP is often a Web-based process, a radiologist can readily access a patient’s previously stored history of diseases and pathologies.
Kaufman: ASP PACS also proves its usefulness in the realm of data mining. The ASP model creates opportunities to extract additional value from general, non-patient-specific data that are imbedded in patient records, charts, and other forms of information that can be obtained from many different locations. This kind of capability would be especially useful in a health care delivery system involving multiple institutions. It affords the ability for radiology departments or imaging centers to obtain collective statistics they might not otherwise have been able to have for lack of access to pooled clinical data. ASP technology has the potential to put the data from diverse sites in a centralized repository, which allows the preparation of analyses concerning disease states, outcomes, human-resource utilization, equipment utilization, material consumption, and other topics. The results are more satisfied patients and payors, and a stronger sense of how the business side of the department or center is faring.
Tucker: ASP also offers an additional backup capability. That is important because PACS is becoming the standard way of doing business inside radiology. Our customers are realizing their PACS must be treated like a mission-critical system, and that is having a lot of implications inside and outside the radiology department concerning the way information gets out to the referring clinicians. Finding ways to ensure that mission-critical systems like PACS are there when you need them will be facilitated by ASP services.
Cooke: Very true. Increased centralization of the storage of data reduces risk. The more places data are stored, the more they are vulnerable. Of course, at a minimum, they should be stored twice, and in two locations. The remote-storage model, again, reduces the risk of data loss. There is an industry-wide perception that ASPs make the upgrade cycle easier. This is largely based on the use of Web technology and simple, less customized applications. In the area of PACS, whether an ASP will make on-site upgrades any easier is unclear. It is clear, however, that since most ASP models involve some level of remote storage, the management and migration of stored data will become easier?at least for the customer of the ASP provider. In theory, this minimizes risk and should facilitate easier upgrades.
Kaufman: An ASP PACS can represent an enormous marketing tool for radiologists, since it helps them support referring physicians wherever those referring physicians happen to be located. If a radiologist can get information about a patient back to the referring physician more rapidly and efficiently, then that physician and others like him or her will find it easy and highly productive to utilize that radiologist.
Tucker: The advantage of the ASP model is apparent to customers whose enterprises reach out to large numbers of referring physicians but have a PACS that is safeguarded by a very good firewall. In order to get data out to those referring physicians, you must punch multiple holes in that firewall. From a technology standpoint, that can be a formidable task. The ASP model of remote hosting would dramatically simplify matters because the referring physicians would access data through the vendor’s Web site.
Kaufman: It is important to note that this can be achieved without using an ASP model. What ASP does, however, is spare PACS users the need to deploy servers, build the supporting information technology infrastructure, and deal with connectivity issues at each of the institutions or centers that make up the enterprise.
Q? Axis Imaging News: What are the financial benefits of ASPs?
A? Kaufman: The most well-known economic benefit is that ASP can eliminate the high, up-front capital costs of information-system acquisition. It eliminates all the budgeting and associated life-cycle issues. These are issues that, in a practical manner, serve to limit the proliferation and adoption of new technology. With the ASP model, you basically pay for the system as you use it, and that is an enormous benefit. Typically, ASP models are based on a fee-per-use formula. Commonly, these formulas specify that you pay a fixed amount for each examination stored, distributed, or viewed. Usually, the amount you are charged per use is very reasonable. An ASP PACS therefore can represent tremendous value. The value derived is immediate because you only pay for what you use at that moment. You have not tied up your capital in acquiring an in-house system, the cost of which represents usage that will occur and be extracted in the future.
Cooke: The concept is really all about risk management for the customer: reducing financial risk through lowered up-front investment and a pay-as-you-go model; reducing business risk, because the information technology scales with business demand; and reducing technical risk as the number of places data are stored. Finance plays into the model, as well. Providing customers with alternate, activity-based pricing models is also related to the ASP equation. In fact, to facilitate risk management properly, pricing for the ASP model must scale with usage and offer a low up-front investment. The ASP model may or may not reduce the overall information-technology expenditure, but it will allow a business, such as a radiology department, to focus on its core competence with the confidence that the technology will be there as required.
Tucker: The ASP model represents a different way of looking at risk. For example, assume a customer is growing rapidly, which means having to acquire a great deal of storage. The challenge for the customer is figuring out how to pay for the acquisition. Many ASP models would allow this customer to share the risk with the vendor and spread the cost out over time. This is a very attractive proposition to customers.
Cooke: There is always some latent risk. There are always boxes and applications to maintain in the environment where the application must be used. This is an important consideration in selecting an ASP provider. Perhaps the risk has changed now. The risks have migrated toward the question of which provider to use. Does the provider have a proven model? Perhaps most important, can the provider make PACS work in any and all environments? In the end, there is no greater risk than having a PACS implementation that does not meet the needs of the institution and satisfy users.
Q? Axis Imaging News: Is it less expensive to use an ASP than it is to acquire an on-site PACS?
A? Tucker: PACS ownership carries a cost that is more than the price of the acquisition. There is also the cost to keep the system up and running over the life of the system. That includes outlays for personnel and incremental improvements of the system. Over the span of 5 to 7 years, these expenditures often prove to be higher than the original cost of acquisition. Reducing the acquisition cost is helpful, but the biggest improvement stands to be made by doing a better job of managing those lifetime and life-cycle costs of the system. Those are costs that get buried into other pieces and parts of the budget, but really have a direct bearing on how well the overall system works.
Q? Axis Imaging News: Would having Agfa handle PACS support through its ASP free space or on the on-site servers make the system faster?
A? Tucker: Yes to both questions. Consider off-site storage. We always recommend to our PACS customers that when they purchase a system, they duplicate data at all times as a precautionary measure. Doing so requires dual storage devices, and we recommend that these devices be located, at minimum, in different parts of the facility. By going to an ASP model of PACS, it is not necessary to acquire that second data-storage device. The data can be maintained by the ASP vendor at the vendor’s site. In fact, the PACS customer would not even need to acquire the first data-storage device. All of the data storage could be handled by the ASP vendor.
Q? Axis Imaging News: Does using an ASP relieve a customer of any responsibility for satisfying the requirements of the federal Health Insurance Portability and Accountability Act (HIPAA)?
A? Tucker: I would not think so. It seems pretty clear that PACS customers are always going to be obligated to meet HIPAA requirements. The ASP vendor will also acquire a responsibility to ensure that the PACS customer is able to satisfy the HIPAA requirements of protecting and keeping safe each patient’s individual and identifiable health care data.
Q? Axis Imaging News: For which types of organizations is the ASP model going to prove most beneficial?
A? Tucker: The argument can be made that all users should be able to benefit from the ASP model; however, in practical terms, the degree of benefit a user will derive depends on the specific type of challenge that needs to be addressed. Some users are challenged by dollars. They lack access to capital dollars to purchase a large PACS that will be based in-house. Others are challenged by the fact that they cannot (or do not want to) recruit personnel to operate a system.
Kaufman: ASP can be beneficial for large institutions that may have financial and internal information-technology resources, but do not have the space to maintain a large infrastructure for PACS (or, perhaps, do not have the financial resources available to pay for space acquisition). ASP also can be beneficial for enterprises that are experiencing rapid growth and are finding it a daunting challenge to manage the technology needs internally that such growth requires over time. ASP makes it extremely convenient to turn over to a vendor, such as Agfa, the responsibility for managing the growth of PACS.
Tucker: Our storage-only ASP PACS solutions will appeal to customers who do not wish to expend the capital necessary to acquire sufficient long-term storage capacity or the personnel necessary to operate and maintain a system in-house.
Q? Axis Imaging News: If an enterprise planning its first PACS uses an ASP, are there traditional PACS components that it can delete from its acquisition plan?
Tucker: First, regardless of whether we place PACS entirely on your floor or offer it in part or in total through remote hosting, it is still IMPAX, which is our core product line. The only thing that changes with the ASP model is the way we deliver the system’s capability to the customer. ASP will allow us to complement our existing IMPAX products and services delivery capability, so that our customers can better manage the issues they are facing with regard to capital, staffing, growth, and systems management. Second, our discussion with the customer would center around the functional capability they want. Our focus would be on what capability should be delivered via an ASP model versus what capability would be better delivered via an outright purchase. The goal is to facilitate the process of thinking about capability and functionality, not hardware and software.
Q? Axis Imaging News: Can an enterprise that has a PACS from another vendor still take advantage of Agfa’s ASP offerings?
A? Tucker: In all probability, yes. One of the hallmarks of our IMPAX product line is adherence to industry standards, which gives us the ability to interface our information-management system to other vendors’ acquisition devices or third-party display devices. For example, our remote storage ASP product provides a Digital Imaging and Communications in Medicine front end so that we could function as your off-site data copier, even though your in-house PACS is Brand X.
Kaufman: The bottom line here is that just because you are not an Agfa shop at this juncture does not mean that you cannot utilize Agfa’s ASP offerings.
Q? Axis Imaging News: What do you predict for the ASP model in the years to come?
A? Kaufman: The emergence of the ASP model of PACS is going to prod customers to look much more closely at the soft and hidden costs of having a large mission-critical information system at their site: everything from the cost of floor space in the computer room to the cost of using more electricity and air conditioning. ASP enables the functionality and benefits of PACS to be available to a wider audience, potentially in easily managed slices. Over the course of the coming 12 to 36 months, the ASP model will mature?and quite significantly. Possibly, some of the remote-hosting and pay-as-you-go aspects of the ASP model will be combined with capabilities that do not now exist, but probably will as the Internet becomes more reliable and better able to deliver image-based information.
Tucker: The evolution of the ASP model of PACS will be governed, to a large extent, by the answer to the question, “What do consumers want from health care?” We think consumers want to be able to go to any provider of care as needed, to receive the best quality care possible, and to obtain that high-quality care without also having to pay significantly more money for it. From the provider side, satisfying these consumer needs will require standardization of quality, equal access to information, and convenience. That means the ASP model will have to develop in ways that maximize information sharing and that ensure providers can deliver in a timely manner information to destinations near and far. I think the near future also holds the end of inconsistent information about the ASP model. We are entering a critical period for the ASP marketplace. We are beginning to see definitions placed around this business. This will have a significant bearing on where the ASP marketplace goes. Agfa accepts these challenges because we know we have very tangible product offerings, integrated into the whole delivery system of the IMPAX product line.
The Agfa ASP is a works-in-progress not currently available for sale in the United States.
Robert Cooke is Vice President and Global General Manager, IMPAX? Solutions, Agfa Medical Imaging
Douglas M. Tucker, PhD, is Vice President, IMPAX Solutions NA
Dean Kaufman is Director of Strategic Marketing, IMPAX Solutions NA
Rich Smith is a contributing writer for Decisions in Axis Imaging News
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