Friday, July 3, 2015

If replacing your PACS could just be as easy as buying a new car.

I have a 2005 Ford Expedition with 160k miles on it and every year or so, I ask myself whether it
makes sense to get a newer vehicle to replace it. I consider the cost of acquiring a new vehicle, buying or leasing it, the potential gain I get in having a more fuel-efficient car, and what it cost me in maintenance and repair of my old vs a new car.

All of this is relatively easy to calculate for a car, however, for a PACS there are many more factors that play a role. First of all, when you buy a PACS, you have pretty much sunk all of your investment in a big hole, it is almost impossible to recover any of it, let alone have a trade-in. The PACS software is licensed to you and you alone, you are not allowed to resell it in most cases (check your software license agreement). So, when you depreciate it, there is little or no residual value; at best you might be able to reuse some of your high-resolution medical monitors, but that is about it.

One of the risks, therefore, is that if your business model and/or application changes before you have depreciated it, or before your lease ends, you are at the mercy of your vendor to work with you to upgrade the system. For example, you might decide that you want to use a Vendor Neutral Archive (VNA) as a backbone instead of relying on the PACS archive, or you want to add cloud storage to make images available for physicians, or add 3-D mammography (tomosynthesis) requiring either server side rendering or another architectural solution to allow for prefetching and processing of these huge images, or any other major change that your current PACS cannot facilitate. A major upgrade or even new purchase might be in order in this case.

Keep in mind, there are several hidden costs involved with changing a PACS. There are costs with migrating data, running two PACS systems in parallel for a while (maybe 3-12 months), which also requires two service contracts if they are from different vendors, training costs and lost time, etc.
At the same time there may be hidden cost savings. The old system might be less efficient, if so, you should be able to quantify the efficiency increase (less staff, more procedures), however, there could also be “soft benefits” such as better quality and less chance for errors, which are hard to measure. Some of the current PACS systems are getting unreliable and buggy as hardware is getting older. One of my recent students told me that his PACS system goes down at least once a week, which is a source of frustration and lost time for sure. He is obviously looking for a replacement to reduce those downtime costs.

Talking with Michael Cannavo, an experienced PACS consultant, he said that many changeover costs are under-estimated by most users. It is therefore prudent to make sure you get all of the facts on the table before making the decision about whether a replacement makes sense. As a matter of fact, you might decide to hang on to your current system for a while, or the other way around, whatever makes financial sense.

Replacing it takes a lot of planning and a certain amount of lead-time. Going back to my car, if that breaks down, I can go to the dealership and after haggling with a salesman for about one or two hours, I can drive away with a replacement. Replacing a PACS system is not as easy and requires at least a few months for the purchasing process followed by months of work for migration and implementation including training.

Another factor to take into account is the maturity of the changeover and/or upgrade. If you like to be on the leading edge, that is fine as long as you are prepared for what is sometimes called the “bleeding” edge effect. My rule of thumb is to never go for the first version of a new release, e.g. release 6.0; wait ‘til at least 6.1 or 6.2. I know of hospitals that hold out for a few years and wait until after version 3 or later before upgrading. It is not that vendors do not always do a good job with testing new releases, most of them do; (shame on the few who don’t and dump insufficiently tested upgrades), but it is almost impossible to test all permutations of system configurations, modalities, RIS/HIS/EMRs, voice recognition systems and the many plug-ins and additional applications that people run on their systems. So there are bound to be problems, bugs and errors.

In conclusion, changing a PACS is similar to buying a new car but only to a limited degree; you need to do a comprehensive financial assessment and look at your return on investment, the devil in the PACS case is in the details, make sure you have all costs covered. In the meantime, I’ve decided to drive my 2005 Expedition for another two years. It is paid for and it serves our purpose, i.e. hauling at least five of our grandkids and pulling my 3,000 lbs. heavy RV with ease. But I do the math every year just to make sure, something you should consider doing for your PACS on a regular basis as well.