Deciding if, how, and when to invest in PACS can be a daunting effort. In addition to representing a significant financial investment, PACS can have huge strategic, operational, cultural, and even emotional impact on an organization and its customers. Those most successful in implementing business-changing technologies carefully evaluate the potential impact from multiple perspectives and disciplines. The following case study examines the multidiscipline PACS planning and analysis effort at Wake Radiology, a private radiology practice performing more than 100,000 examinations per year at seven outpatient facilities in Raleigh, NC, and surrounding areas.


Effective PACS planning and analysis involve more than a simple spreadsheet to evaluate costs and savings. In order to provide a more meaningful, representative, and realistic result, Wake Radiology commissioned the business, clinical, technical, and process engineering expertise of a team of individuals from both inside and outside of the practice. The team’s mission was not to recommend a particular vendor or implementation strategy, but rather to facilitate an informed technology decision by providing insight into and perspective on the full impact of an integrated technology implementation within the Wake Radiology operation. The effort included:

  • An examination of technology’s fit with the organization’s strategic plan
  • A Web-based customer needs assessment
  • A detailed work-flow evaluation (pre- and post-implementation)
  • An existing technology assessment
  • A system configuration recommendation
  • And the development of a corresponding financial model

Strategic Planning, Technology

Information technology serves a valuable role in medical imaging, but the acquisition of technology is not in and of itself the goal. It can be, however, the means to the end when applied appropriately. At the core of the Wake Radiology PACS implementation analysis was the following question: How can technology be used to better meet the goals and vision of the practice? In the quest for the right answer, additional strategic questions immediately came to mind:

  1. Is the practice currently meeting the needs of its customers?
  2. What are the growth expectations of the practice?
  3. Will the practice be distributed or centralized?
  4. Will the practice be generalized or specialized?

No single answer was necessarily required or even expected for these questions, but it became clear that there was the need to explore the range of possibilities before the search for the right technology solution could begin.

To be most effective, PACS does not involve a stand-alone application. Rather, it includes a host of integrated systems, including archive devices, diagnostic workstations, imaging equipment, health care information systems, and image distribution systems.

No one expected PACS to be the magic wand that solved every problem, but as with other medical imaging operations, Wake Radiology was interested in achieving the host of possible benefits of an integrated technology solution including:

  • Direct cost savings associated with radiographic film, processors, chemistry, processor maintenance, storage space, and film handling/distribution
  • Increased connectivity and integration between facilities that could better accommodate and enable growth and flexibility
  • Productivity improvements
  • Increased revenues through eliminating lost examinations and increasing effective capacity
  • Fewer repeated studies due to poor radiographic techniques and misplacement of films
  • Decreased time to interpret and communicate diagnoses, and
  • A more progressive image in the community

While many process efficiencies and direct cost savings can be achieved by eliminating the overhead associated with handling hard-copy film, Wake Radiology was not pursuing PACS merely for a return-on-investment. It was well understood that the costs associated with purchasing and supporting PACS could more than offset any direct cost savings, depending on the level of integration and particular solution chosen. To assess the full potential value of PACS, Wake Radiology sought not only to quantify the direct impact and hard benefits, but also to evaluate the indirect impact and softer benefits.

Customer Needs Assessment

Determining this impact and ensuring a successful implementation first meant understanding the needs of all Wake Radiology customers. To gain this understanding, a Web-based survey was prepared and distributed by email notification to approximately 50 practice referrers.? (Survey results automatically populated a relational database for subsequent detailed analysis.)

The survey included questions regarding the respondent’s background, familiarity with PACS and the Internet, need for hard-copy images, desire for PC-based diagnostic tools, as well as opinions about current access to images and current image quality.

Survey results indicated that a majority of respondents had heard of PACS. Most respondents believed that Wake Radiology already provided a high-quality and timely service. Most, however, did indicate a desire for PC-based diagnostic tools, Web-based image access, and? remote consultation. There was a strong sentiment (expressed by multiple respondents in an additional comments section) that PACS was relatively untested and represented a substantial deviation from current practice. These respondents cautioned Wake Radiology to carefully coordinate any film-less technology implementation with the referring community.

Work-flow Analysis

As part of the analysis, Wake Radiology’s work flow (approximated across facilities) in the existing film-based environment was carefully evaluated and charted from the point of order entry through results reporting. In the existing process, between 35 and 40 human input steps were noted. The same process was charted assuming the implementation of an integrated technology solution. In such an implementation, the process was reduced to between five and 10 steps. To further illustrate the potential operational improvements, an animated work-flow simulation model was constructed using these flowcharts, time study data, information gathered in staff interviews, and a standard simulation software package.

Wake Radiology’s strategic course indicated the need for a technology solution that provided maximum flexibility. To support this need, the team proposed a technology configuration with the following basic specifications:

  • A core image and information database residing at the largest imaging center (also adjacent to the practice’s IT department)
  • Satellite centers connected by the existing wide area network (WAN).
  • A Web server configured at the core for image and report distribution

To provide redundancy in the event of a WAN failure, the configuration equipped the busiest satellite locations with their own local area network (LAN) image servers.? These LAN servers would have the ability to transfer image data to the core image and information database (provided in this implementation by the radiology information system [RIS]) continuously as a background operation. Workstations and imaging equipment at these larger locations would be linked directly to their respective LAN servers. The smaller satellite facilities would send to and query data directly from the core database. Nondigital and non-DICOM modalities would be transitioned into the configuration over a 3-year period.

The implementation of additional RIS functionality was recommended to ensure maximum functionality and data integrity.?? At the time of the analysis, some in-house radiology information system functionality existed, but enhancements would be required to support an integrated PACS.

Financial Model Assumptions

Financial models based on the proposed configuration were constructed for both fee-per-procedure/application service provider and capital implementation strategies. Each model incorporated infrastructure improvement costs, projected hardware/software costs, a specific transition plan, supply and labor costs, projected archive costs, installation and maintenance costs, and corresponding payback analysis.

To quantify infrastructure improvement needs, the following components of Wake Radiology’s existing technology infrastructure were evaluated:

  • WAN and LAN
  • Hardware (servers, workstations, brokers)
  • Imaging equipment (all modalities)
  • Information systems and software
  • DICOM compliance and capabilities

Existing LAN/WAN specifications were determined to be sufficient for the proposed configuration. Costs associated with implementing RIS and with bringing DICOM information to the imaging network were included in each model. In some cases, software and/or hardware devices were required to achieve the necessary DICOM compliance. In other cases, older imaging equipment was already scheduled for replacement with newer, DICOM-ready equipment.

Only those costs incurred as a direct result of the planned PACS implementation were included in the models. Each model also allotted costs for a full RIS implementation (purchased from an outside vendor or developed internally) in year 1 and a computed radiography implementation at five sites in year 2. The costs to deploy Web-based image distribution and DICOM worklist functionality were also included in both models.

Other factors incorporated into the financial models that did not change between implementation strategies included:

  • Workload and projected growth rate
  • Film/chemistry costs
  • Films per study
  • Memory per study
  • Repeat rates
  • Current labor costs
  • Interest rates
  • Transition plan

The transition plan references the intended migration (as a percentage of total examinations) of each individual modality to PACS over a 5-year implementation period. In both models, MRI and CT are brought fully to the PACS in year 1. Remaining modalities are brought by year 3.

Also incorporated in the models were costs specific to the implementation strategy chosen including:

  • Archive costs
  • Hardware costs
  • Software costs
  • IT personnel costs
  • System maintenance costs
  • Training costs

These costs were estimated using preliminary pricing provided by select vendors.

Other Factors

To provide a more representative financial analysis, each model also incorporated a hard-copy factor (HCF) and residual film factor (RSF). HCF refers to the percentage of a particular type of worker’s time that can be directly attributed to handling hard-copy films, roughly corresponding to the percentage of time that could conceivably be eliminated by PACS. In this analysis, HCF values were established based on time study and industry survey data.

It was deemed unreasonable to expect that any worker time could be eliminated at “go live.” In both models, HCF was assigned at 0% in years 1 and 2? for all workers and staff and at 50% for film librarians and couriers and 40% for technologists in years 3 through 5.

RSF refers to the percentage of film that cannot be eliminated even with a 100% PACS implementation. To accommodate a realistic transition to a filmless environment, RSF was set at 60% in year 1, 40% in year 2, 20% in year 3, and 10% in years 4 and 5. To achieve an equitable comparison, HCF and RSF were held constant between implementation strategies.

Cost-Benefit Analysis

The fee-per-procedure model yielded nearly $1.7 million in interest-corrected savings over 5 years, while requiring approximately $925,000 in interest-corrected capital funds over the same period. The capital model provided $2.0 million in interest-

corrected savings over 5 years, requiring $1.4 million in interest-corrected capital funds to achieve that savings. Differences in financial performance were attributed to the yearly maintenance costs of the capital implementation and the “deferred” costs associated with the fee-per-procedure approach.

However, while many assumptions were made to “level the playing field” between the two approaches, it was emphasized that this financial analysis did not reflect quality, functionality, or vendor support factors that could ultimately be critical in the final technology decision.


The results of the implementation analysis were shared with the Wake Radiology leadership in both a written document and in formal presentation. The multidiscipline analysis was not presented as the final answer or as the end of the process, but rather as a framework to continue the implementation process in an informed manner. At the time of print, a proof-of-concept deployment in select Wake Radiology areas was in progress. Such a deployment was deemed to provide the opportunity for further planning and for internal and external customers to develop a comfort level with the technology, prior to a full implementation.

Mark R. Janas, MBA, is executive director, ValRad Inc, Raleigh NC, [email protected]. Steve Munie, PACS administrator, Wake Radiolgy, Raleigh, NC; Mike Heim, BSIE, process engineering consultant; and Imre Gaal, MS, MD, clinical technology advisor, Wake Radiolgy, participated in the planning team for this project.