The high price of admission bars many hospitals and imaging centers from enjoying the benefits of a picture archiving and communications system (PACS), which requires huge up-front capital investments for equipment and ongoing management demands that can sometimes take a hospital off mission. Vendors are trying to get around these barriers with a concept borrowed from the computer industry but new to radiology-the application service provider (ASP). The ASP is a potentially cost-effective PACS solution for institutions with tight resources. ASPs originated as a plan to provide application software and data storage off-site over the Internet via Web browser. The concept is barely a year old in radiology, but already it has gone beyond Web-based services to on-site hardware and operations.

ASPs install and operate a PACS for a hospital or imaging center. The institution pays a fee-per-examination, avoiding some of the capital expenses associated with a PACS. This model offers the benefit of shifting the cost out of the capital budget and into the institution’s annual operating budget. In theory, radiology-focused ASPs are more than alternative financing plans that operationalize what would otherwise be capital expenses. ASPs could reduce the need for an institution to operate a complex computer network and also offer customers quick access to the latest applications, along with technical support. Finally, many vendors are suggesting that ASPs will produce economies of scale that will make it possible for smaller institutions to operate a PACS. For example, a vendor could offer long-term archiving with disaster recovery from a central site, the cost shared among many institutions. Centralized telephone support or image management over a Web server might also be cheaper if many institutions share a single facility. These economies of scale are just theoretical and yet to be proven.

Variations on a Theme

ASP models vary from vendor to vendor. Some vendors will install a complete PACS, including digital acquisition modalities, interpretation quality workstations, short-term storage, image distribution, and long-term archiving. This vendor might also operate the system on-site, providing all technical personnel along with all technical support. Other vendors offer part of a PACS, like long-term archiving.

Future ASP models could include full radiology information system (RIS) functionality, disaster recovery, subspecialty over-reads, primary interpretation, night coverage, 3-D services, and online continuing medical education. The ASP vendors surveyed for this article offer a PACS, or a subset of a PACS, in various combinations.

Most vendors do not manufacture all of the components required for a PACS, so they frequently form partnerships with other suppliers. Since a PACS is usually installed along with existing radiology and hospital information systems, each institution has different needs that require custom solutions, so most vendors are flexible and will develop an ASP pricing model for any configuration an institution requires. Most vendors will build both software and equipment upgrades into their per-examination charge, so hospitals can be assured of maintaining currency.

Beyond Software

In their original conception, ASPs were about software applications. Many vendors produce image-management and viewing software as their primary product, but will build and operate a PACS with hardware from other vendors. For example, a company that produces a software product allowing the efficient distribution, storage, and retrieval of images among many servers essentially provides a database for databases. The database is centrally managed off-site, and all institutions tied to that server can trade images electronically.

This vendor plans to offer an ASP model PACS solution in the near future. Although primarily a software company, it will install and operate a complete PACS, for a per-examination charge, through its partnerships with two vendors to supply hardware.

Two other vendors, which also produce image-management software, will install and operate a complete PACS for a per-examination charge. Both companies will try to craft a unique PACS solution for each hospital and imaging center in an effort to find an economic model that works.

Yet another vendor, primarily in the business of deep-archiving, operates an off-site, centralized data storage facility that provides institutions with an “infinite hard drive.” Following a true ASP model, the company will charge for chunks of storage space on a monthly basis. The service includes a mirror facility that is always up to date and can come online if the main facility goes down. The vendor will also build and operate a complete PACS for an institution on a fee per-examination basis. Since the vendor manufactures neither software nor hardware, customers can choose any hardware-independent image management and viewing software and any appropriate hardware. The vendor will pull together a package based on the customer’s preferences.

Archiving ASP

Keith J. Dreyer, DO

One vendor seeking to deliver its ASP concept to radiology is strictly in the archiving business. It produces software designed to manage long-term, large archives efficiently and to make the systems easily scalable. The company will install and manage a long-term archiving system on-site for a per-examination charge. The company says that on-site archiving is still the most popular with customers because of security issues, and that it has not had much call for off-site storage. The vendor can offer off-site storage, though, through its partner.

Another PACS hardware vendor that offers a complete turnkey PACS solution based on a per-examination charge will install both diagnostic and clinical workstations, a wide area network, and servers to cache and manage images temporarily. In this model, large, off-site data centers handle all image archiving. The data centers are connected to the radiology center via a secure virtual private network (VPN) and clinicians use the vendor’s software to retrieve and view the image. Like most vendors, this one includes obsolescence protection in its per-examination charge, and provides on-site training and telephone support.

This vendor reports that its ASP model is best suited for institutions that do 70,000 or fewer examinations. Although it manufactures modality hardware, the vendor’s PACS solution does not include the acquisition devices. Customers must make separate lease or purchase arrangements for that equipment.

Web Solutions

A major manufacturer of computed radiography (CR) equipment also offers Web server-based image management and viewing software that can form the heart of a PACS, transparently managing images and transferring data to and from the RIS. Physicians access the data on a Web browser wherever they have an Internet connection. But, like many vendors, this one will build and operate a complete PACS solution on a fee per-examination basis, including the company’s CR equipment. It will craft individually tailored solutions for a customer that might include everything from a full PACS to image management and viewing software only. Virtually all installations are on-site, although the company can arrange for off-site storage if a customer requires.

Another major manufacturer of PACS software will set up and manage a complete PACS using an ASP financial model (by the examination). The company will design an offering based on the customer’s needs. It is capable of offering both off-site (through its partner) and on-site image archiving and can deliver those images to users over the Web. This vendor can include, as part of its ASP model, a radiology information system or a solution to connecting several radiology information systems from diverse institutions. Eventually this vendor will offer additional services, including subscription-based content services and reference images. It will also act as facilitator and consultant to large, multi-hospital organizations that wish to offer an ASP PACS solution to each of its member institutions.


Obviously, there are many complicated, difficult, and apparently confusing issues to consider when looking at an ASP model. Customers need to be diligent and thorough. Here are some things to consider:

  1. How reliable and stable is the vendor?
  2. What happens to the images if the vendor goes out of business?
  3. Who owns the images and can they easily be converted to standard formats and/or transferred to other systems?
  4. Has the vendor made adequate provisions for backup and disaster recovery?
  5. If some of the equipment is off-site, how reliable and secure is the Internet connection or other network line, and does it offer enough bandwidth (ie, is it fast enough)?
  6. Does the vendor have a financial incentive to eliminate all the hospital’s film as quickly as possible, or will duplication erode any expected savings?
  7. Can the hospital’s existing information system handle the ASP’s requirements, or will the hospital have to spend additional funds upgrading infrastructure?

Eventually, organizations such as the American College of Radiology, the Radiological Society of North America, and the Society of Computer Applications in Radiology could consider creating a set of policies and recommendations that define minimum acceptable configurations for ASPs with clear requirements for on-site backup, security, and exit strategies, including a path for exporting and migrating data to other vendors. ASPs offer many potential benefits for patients and providers, but they also offer challenges and problems and should be approached with caution by hospitals and imaging centers until the industry sorts itself out and/or standards and policies are established to guide buyers and vendors.

Keith Dreyer, DO, is vice chairman of radiology, Massachusetts General Hospital, and assistant professor of radiology, Harvard Medical School, Boston. He is a member of the Decisions in Axis Imaging News editorial advisory board.