Economics of Filmless Radiology

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SCAR U analyzed the economics of filmless radiology on June 4th at the Society for Computer Applications in Radiology (SCAR) Annual Meeting in Orlando, Fla. Paul Nagy, PhD, director of informatics research at University of Maryland, provided strategies for buying PACS on a small wallet. Eliot Siegel, MD, vice chair of radiology at University of Maryland, focused on the economic challenges of dealing with a PACS divorce. Bruce Reiner, MD, director of radiology research at the VA Maryland Health Care System, and Sean Casey, CEO of Virtual Radiologic Consultants, teamed up to share the concept of grid radiology.


PACS on a Small Wallet

The PACS market is evolving into a more mature market. Hardware prices are dropping, and software integration is becoming increasingly critical, said Nagy. Hardware accounts for less than 30 percent of the cost of PACS.
   
Commercial off-the-shelf hardware can meet many needs in radiology, Nagy said. A commercial 2 megapixel monitor is suitable for reading almost all studies except DR and CR.
   
While hardware and software have relatively short lifespans, standards last 25 to 50 years. "Learn IHE and DICOM and use it where applicable to solve problems," says Nagy. Integration is a key concern; although all vendors conform to DICOM, the standard is flexible with varying levels of integration among products. Finding out whether or not proposed vendors connect at the RSNA Connectathon can save integration time and costs after the purchase.
   
Nagy offered four vendor selection tips:
  • Don't select one vendor prematurely.
  • Market competition is a positive; use it to your advantage.
  • Learn from all vendors.
  • Rely on the KLAS report for user satisfaction information.
Several other details can trim PACS costs. Line item pricing allows buyers to see and verify the cost of all components -- particularly hardware that can be purchased from other suppliers. Asking for a software-only price ensures that hardware is not tied into legacy components. The contract should specify payment on acceptance, which can be measured by functionality or filmlessness.
   
A decision matrix that evaluates the total cost of ownership, functionality, technology, integration capabilities and industry relationships can guide the purchase decision, says Nagy. Relevant users should stick to relevant components. That is, radiologists should analyze functionality; and IT should review technology.


Economics of a PACS Divorce

Both first and second time PACS buyers can learn from PACS divorces, according to Siegel. With the average PACS lifetime lasting five to seven years, buyers are beginning to enter the replacement PACS market. Siegel offered advice for lessening the pain of a PACS divorce as well as strategies for a healthy PACS 'marriage' for both first and second time PACS buyers.
   
Once a hospital or imaging center and PACS vendor decide to part ways, data must be migrated from the old PACS to the new one with data migration taking approximately 30 percent as long as data acquisition. That is, if the first PACS operated for five years it will take 1.6 years to migrate the data to the new system. Costs for data migration range from 40 cents to $1.20 per study, Siegel said. Some sites operate both systems during the data migration period. The advantage is relatively simple access to studies; however, it can cost twice as much to run two systems. Plus, radiologists will need to access both systems, which can disrupt productivity and workflow. Another option is a data access gateway from the new PACS to the old PACS; however, performance may be less than optimal with a gateway, says Siegel. Finally, the site can turn off the old PACS but must transfer the data, so timing can be tricky. "Data migration is expensive and time-consuming," concluded Siegel.

A final hitch is responsibility for data migration; options include third party migration vendors or the facility as most PACS vendors are unwilling to assume responsibility for the task.
   
Siegel offered a combination approach as a possible solution to the data migration quandary. That is, maintaining the first PACS as the radiology PACS and replacing the enterprise wide distribution system, providing the new enterprise system with copies of new studies and enabling access to priors. "This may be the first step in the migration strategy or a long-term solution," Siegel noted.
   
Siegel shared results of a survey about PACS buying habits. A large percentage of divorcees opt for ASP or fee-for-use financing on the second round. Experienced buyers also have chosen 'pre-nuptial agreements' specifying responsibility for database migration in the RFP and other critical sticking points. 
   
Siegel concluded with advice for profiting from the spate of PACS divorces.
  • Include obsolescence protection in the contract.
  • Limit pre-paid service contracts.
  • Consider a software-only PACS migration if you have a strong and motivated IT department.
  • Focus less on the RFP and more on vendors' track record.
  • Don't forget to calculate time and cost required to swap vendors.
  • Don't plan for a long-term relationship with one vendor.

Grid Radiology is the way of the future

Grid radiology is a concept of the radiology environment of the future that aims to solve problems of increasing image utilization and data complexity as the radiologist shortage grows, predicted Bruce I. Reiner, MD, director of radiology research at the VA Maryland Health Care System at an educational session June 4th at the Society for Computer Applications in Radiology (SCAR) Annual Meeting in Orlando, Fla.
   
It applies the concept of grid computing, which links multiple computers from different locations as a unified source, to the radiology business to optimize the radiologist supply/demand imbalance. Potential forms could be a large enterprise teleradiology practice, loosely associated radiologists or independent groups working on the same platform or network or a giant website where radiologists could find work or hospital could locate radiologists.
   
Necessary infrastructure includes a meta-PACS that ties multiple PACS together as one system, IHE XDS to integrate multiple enterprises and a virtual radiology environment.
   
In addition to easing the radiologist shortage, grid radiology could decrease reimbursement, tie reimbursement to quality and increase sub-specialization, predicts Reiner.