Applied Radiology

In today's healthcare environment, reducing costs and improving efficiencywhile adding value to patient care is on the radar screen of virtually allhealthcare organizations. While many new and emerging technologies promise todeliver on these justifiable goals, radiology departments and those chargedwith making purchasing decisions need hard data to prove the long-term value ofthe technology. Such is the case with dry laser imaging technology. Introducedin 1994, dry laser imagers have become the most rapidly adopted laser imagingsystems in history. They accounted for more than half of all laser imagerspurchased in the U.S. in 1997. For facilities still considering the switch fromwet laser imagers to dry laser imagers, a comparative cost analysis can providethe data needed to make informed decisions about such an investment, as well asa concrete demonstration of the long-term efficacy of the technology.
The medical imaging community has often been more successful in dealing withthe short-term aspects of cost, and less cognitive of the long-term effects. Atthe same time, experience has indicated that a large segment of the life-cyclecost for a given system is attributed to operational and support activities(e.g., up to 75% of the total cost), both measured over a long-term timeperiod.1 Based on this scenario, Stone Family Enterprises, Inc.-Medical ImagingConsultants developed a program that would provide a comparative cost analysisof wet laser imaging systems vs the KodakTM (formerly Imation) DryViewTM LaserImaging System at 25 hospitals throughout the United States. The study foundthat facilities switching from their wet laser imagers to dry laser imagingsystems would average a 16 percent savings in film processing costs.

Study overview

The study was designed to analyze the capital and operating costs of the wetlaser imaging system and the dry laser imager at each site. Aggregate data wasthen assembled. Capital costs included the cost of planning and purchasing thewet or dry laser imaging systems and the necessary support equipment, buildingcomponent costs, and opportunity costs (opportunity costs can be expressed asthe incremental marginal loss from money that is not invested in a betterpaying proposal).2 Operating costs included the cost of the film, consumables,maintenance, service, safety, and utilities. In both cases, capital andoperating costs included all of the complex combinations of resources, such aspersonnel, equipment, and film.
In short, the life-cycle cost analysis quantified the total investment for allnecessary activities spread across the system's life cycle-planning, selectionof equipment, site preparation, cost of the system, operational use, sustainingsupport, and the projected costs to operate the system.3 The life-cycle for thestudy covers a 5-year span. Study design The study was designed to address anumber of questions: Do dry laser imagers require fewer or more personnel tooperate it? If more personnel are required, how long will this affect the costof the system? Will existing personnel need to be extensively retrained and, ifso, at what cost? Does dry technology decrease or eliminate certain steps inthe laser imaging process? Are the capital equipment costs for a dry systemmore or less than for a wet system? Does the finished film cost more or lesswith a wet system than with a dry system?
Background information for these surveys was provided by a radiology departmentrepresentative at each of the survey sites. In our study, equipment costs andthe cost of the dry laser film was provided by the Kodak account representativefor each respective site. Verification of water, wastewater, and electricityrates were verified by the researchers. In instances where support equipmentdocumentation was unavailable, information was gleaned from industry catalogs.All of this information was then plugged into an algorithm to determinefinished film costs for wet laser imaging systems and dry laser imaging systemsat the same facilities.

Survey findings

The numbers below are a compilation of results from the 25 participatingsites:

• Average wet system cost/site totals-5-year life-cycle: $981,818.22
• Average DryView system cost/site totals-5-year life-cycle: $876,608.62
• Average savings per site with DryView system-25 sites: $140,535.52
• Average wet laser imaging system finished film (per film) costs: $3.37
• Average DryView finished film (per film) costs: $2.73

Summary

The survey addressed the concerns an institution might have when determiningwhether or not to invest in dry laser imaging technology. It took a close lookat labor savings and costs; the impact of the technology on patient care(reduced examination times); and the effect of the technology on the efficiencyof radiologists and attending physicians. It is true that the bottom line wouldnot be affected in most cases by labor savings in the areas served by theradiologists or attending physicians. However, where time savings wererealized, the whole enterprise (the hospital) benefited-not just the medicalimaging department. Cost reduction opportunities take on different forms witheach medical imaging application. The following list represents some of theareas where dry laser imaging systems provide potential savings:

Potential cost savings with dry laser imaging

Cutting purchase costs:
1. Reduces the number of types of supplies in stock.
2. Reduces the number of purchase orders necessary to sustain a laser imagingoperation

Cutting process costs:
1. Reduces the number of steps needed to arrive at a finished product.
2. Reduces the cost of one or more steps in the imaging process.
3. Automates operations.
4. Reduces materials consumption.
5. Reduces a significant source of image variability (QC).
6. Faster patient throughput due to the ease of siting dry laser imagingsystems. Positioning of an image processing system no longer is dictated byease of access to water, floor drains, and venting systems. Because of the timesaved each day in technologist labor, patient films are available sooner to theradiologist.
7. Staff training is not required to deal with EPA and OSHA regulations forhandling chemical spills (i.e., spent fixer), or hazardous materials (HazMats).
8. Saves time on film processor crossover cleaning and saves an average of 10minutes per day in performing processor linearity checks.

Cutting equipment downtime:
1. Eliminates daily crossover cleaning.
2. Linearity checks are no longer needed for a wet laser imager.
3. No wet laser imager preventive maintenance needed from one to two times permonth.
4. Eliminates laser imaging system downtime due to clogged drains caused byalgae buildup.

Cutting administrative overhead:
1. Labor can be shifted to other areas of need in the department due to processsimplification.
2. Tighter QA/QC controls can be maintained due to the elimination of manysteps (in labor, inventory, and in service cost to the equipment) in theoperation.

Reducing liability costs:
1. No contact dermatitis problems associated with handling developer and fixer.
2. No respiratory discomfort due to fumes given off by the chemicals used inwet processing systems.
3. No concerns with the EPA or OSHA associated with the disposal of chemistry.
4. Lower risk to the institution from flooding caused by clogged drains, etc.
5. Lack of liability concerns with the improper disposal of fixer that containssilver. (Liability does not stop for the hospital when it turns the chemistryover to an industrial reclaimer service.)

Soft savings realized:
1. Reduces patient room/recovery room charges due to placement of a dry laserimager.
2. Reduces waiting time for radiologists and referrals due to laser equipmentsiting.

References

1. Hanan M: Consultative budgeting: How to get the funds you need fromtight-fisted management, p 115. New York, American Management Association,1994.
2. Blanchard B: System engineering management: New dimensions in engineering,pp 1-3. New York, John Wiley and Sons, Inc., 1991.

Table

Questions to ask when investing in new technology
When you are buying into a new technology, you need to ask the followingquestions:

• How valid is this new technology?
• Will we as an institution have to hire more radiologists, technologists,managers, or service engineers as the result of purchasing this new technology?
• What are the building requirements, i.e., the need to add new space or therenovation needs to existing space?
• Will we have to add additional support equipment to make the system fullyoperational?
• Is this new technology cost-effective?
• Does this technology fit in with the institution's short- and long-rangegoals?
• Will this new technology improve the quality of patient care?