Today's health care market faces fierce competition that fosters the strong development of consolidated delivery networks. This consolidation has led to complex and geographically distributed enterprises struggling to cope with demands for rapid access to patient information. These paradigm changes require that health care systems reengineer information storage and delivery, as well as refine the overarching data repositories and access systems that support the health care consumer.

A prominent feature in this evolution is the electronic medical record (EMR), which gives providers, regardless of their location, access to all of a patient's pertinent information. A significant EMR component and an integral part of the solution to the challenges of medical technology is picture archiving and communications systems, or PACS. PACS integrate imaging modalities with computerized image storage for easy and efficient access to patient imaging information throughout the enterprise.

Although PACS technology now is maturing rapidly, this was not always the case. While the technology was emerging during the 1980s, 40 percent of the imaging studies produced in U.S. hospitals were not even read within the first 24 hours. By today's standards and according to guidelines established by organizations that accredit hospitals, such slow action on clinical data would result in lost reading contracts for the radiologists. This adds up to enormous waste-if one calculates just the cost of producing the film, let alone interpreting it. A recent study conducted by the Mayo Clinic and Foundation concluded that the average radiology examination costs more than $16 just to produce the hospital's "technical component" (those costs incurred in the production of the radiological images).1 The price of this technical component does not include the cost of a staff radiologist to interpret the imaging results.

In any boardroom of any health care organization today, chief executive officers (CEOs) and directors are being bombarded with proposals to purchase PACS systems. Many of the past technical and computer technology limitations to implementing PACS have been resolved. CEOs who are more information technology (IT) savvy are weighing the expense of the PACS implementation against the benefits that can be derived for the enterprise. They know PACS technology is among the most complex and costly projects an enterprise can undertake. They realize that PACS technology requires a substantial commitment of both time and resources-both of which are in high demand and short supply. They demand to know the bottom line: "Will PACS technology provide sufficient value for my organization to justify its costly and complex implementation ?"

CEOs define value as solutions to some of the pervasive business problems facing their organizations. Enterprises must deliver productivity improvements and cost reductions in imaging services while providing better patient care. Thus, the decision-making process in addressing PACS must begin with a clear understanding of the business model of the organization and the strategic future direction of the business, in concert with industry and technology trends.

Chief information officers (CIOs) want to know what additional infrastructure will be required and how a new PACS system will interface with legacy and heritage systems. All parties involved in the decision should understand that traditional paradigms and procedures for the delivery of imaging services-from the acquisition of the image to the delivery of the final image product to the customer-will evolve after implementing PACS.

Today's business dilemma for health care enterprises

Managed care and/or capitation have driven down health care costs and margins as regional markets have been penetrated. Hospitals, physician groups, and other medical professionals are competing for fewer health care dollars in an environment of increased patient loads and cost reduction commitments. The industry has evolved into a marketplace where financial considerations reign supreme. One way to increase revenue is to increase the volume of healthy covered lives (capitation contracts) or to compete for large contracts for "carve-out" services and tertiary care.

The financial risk under these capitated arrangements often falls on the health care institution providing the services when the mix of covered lives is not as healthy as demographics first indicate. Hospitals need to expand their geographic competitive reach when populations close to their central facility are not large enough to provide the desired revenue or population mix. This and other factors have spawned the growth of integrated delivery networks (IDNs) that are distributed geographically more so than the traditional U.S. health care model. In turn, the need to communicate confidential patient information within expanded IDN borders has broadened the need for complex electronic medical record systems and linked information systems. For access to imaging information throughout the IDN, PACS technology (or teleradiology) has become a viable option.

Planning for PACS

If effective PACS purchasing decisions are to meet the objectives of chief executives, boards, and changing organizations, decision-makers need a rigorous and structured process for planning, procuring, implementing, and evaluating the new system. An effective methodology can leverage existing technology investments and minimize financial risk by aligning the PACS procurement and implementation with the organization's business and strategic technology plan.

The overall objective of this structured process is to identify whether PACS requirements meet a given health care organization's specific needs, as well as its long-range strategic IT and business objectives. Vendors selling PACS usually cannot assist institutions with such critically comprehensive planning. It is therefore unlikely that a vendor can objectively evaluate an organization's PACS requirements and recommend a system without a bias toward the vendor's own system. A more practical alternative is using a vendor-neutral IT consultant with specialized PACS expertise.

The vendor-neutral consultant will engage the health care enterprise in a structured discovery and data gathering process designed to evaluate the business case for PACS, protect the institution from mistakes in the design, and ensure that the final solution will help solve some of the pressing business problems they face. The consultant of choice should have experience in health care strategic planning, information

systems planning/implementation/integration, and PACS planning and implementation. The firm should be prepared to roll up its sleeves and work with the institution throughout planning, selection, and implementation. In addition to the services above, the consultant's job also includes business process reengineering to support the process evolution that will maximize the benefits of implementing this technology.

An enterprise-wide, structured PACS planning approach should involve a broad cross section of the imaging and user community whether the organization is considering an enterprise-wide or single facility PACS solution. Figure 1 outlines a vendor neutral, comprehensive, enterprise-wide strategic planning methodology for PACS.

The scope and benefits of PACS reach beyond the radiology department. While this broader vision is exciting, it also greatly expands the exposure, expense, and operational impact of PACS. It further emphasizes the need to be comprehensive and include all key players in the planning and decision-making process. This will ensure that the IDN produces a complete, robust list of requirements, and structures a solution with universal buy-in to meet its specific needs. It is imperative that the methodology allow an organization to conduct full financial modeling of PACS' impact on the entire IDN, based on the implementation "scenario" selected at the conclusion of the modeling process. If a health care system approaches planning in any other way, it risks not identifying major system requirements until much later. This could have two major negative impacts on the enterprise:

1) Costs could be badly underestimated, requiring an infusion of unbudgeted capital and resources to achieve objectives. 2) The organization may

not realize the full range of benefits from effectively implementing internal changes in operational strategy and workflow process that PACS initiatives require. Using a robust, structured planning process to establish a sound business case assures the organization that it is fully prepared to move on to the next steps: developing a request for proposal (RFP) and conducting the PACS vendor selection process.

RFP requirements and vendor selection

The modeling exercise described above will produce a high-level list of PACS equipment needs and can also produce archive size requirements-depending on the level of detail in the planning process. Both are instrumental in preparing an effective RFP. A well-developed and written RFP will protect the organization from some of the potential procurement pitfalls of PACS. Among these is the implementation timeframe "creep" common to the industry today. This is not entirely a vendor problem, as some institutions have not adequately established PACS project scope or expectations ahead of time.

The RFP also should include detailed specifications for the locations and types of required equipment, and a high-level project plan so the vendor can specify the installation accurately (figure 2). Changes in explicit and "hidden" operational and procedural processes throughout the enterprise due to PACS should be considered carefully. Enterprises should be able to capitalize on industry "best practices" that emerge as more systems are installed throughout the industry. Incorporating industry best practices helps organizations manage the process and minimize financial risk.

Prior to issuing the RFP, an important step in the process is pre-qualifying vendors by talking with vendor references about their experience with the prospective vendor in installing and supporting a PACS system. Determine whether the reference system was implemented in a timely fashion and whether it has actually performed according to the level specified in the vendor's response to the RFP.

Implementation

Implementing and integrating a PACS requires significant planning, workflow redesign, system configuration, and training. As noted, a common problem in implementing a PACS is not anticipating workflow changes and thus not taking full advantage of the cost efficiencies possible. When evaluating the mix of image generation technologies, it is imperative to recognize the need for different types of interface technologies. Even though established communications standards can be supported by newer equipment purchased today, older equipment already installed in your institution may require specialized protocol conversion devices to "talk" to the new PACS equipment. Even standard interfaces sometimes can be problematic. Vendors should be able to specify all devices required during the vendor quotation phase of the project. Even with that information in hand, however, the actual installation and configuration of these devices is not trivial. It takes experienced implementers to manage these processes and insure a favorable outcome.

Finally, connections to radiology information systems or hospital information systems, computed radiography, digital radiography, and results reporting can consume months prior to the go-live date for the system. Proper planning and orchestration of these activities is also critical to a successful implementation.

Still more requirements

Once a system is running in test mode, validation testing of all data connections and transfers is crucial. It is also a good idea to begin archiving images a number of weeks (or months, if possible) before going live. This will minimize the pain of transition to electronic imaging by decreasing dependence on old hard-copy images once the system is live.

Summary

Once an enterprise has determined that it is advisable to evaluate a strategy for PACS, the informed decision to select, implement, and operate PACS begins with a sound, business oriented approach and judicious planning up front. Building a documented business case is the first step. This forces management to establish baseline expectations for system implementation throughout the enterprise as well as providing an accountability structure and project leadership. Choosing not to ignore or slight this important step when embarking on complex and costly PACS technology initiatives will produce solid business strategies that successfully meet the current and future business and medical service objectives of a provider organization. AR

References

1. King BF: Calculate film costs before going electronic. Diagnostic Imaging 19(9):47-50, 1997.

Ms. Chaney is practice director of imaging and PACS, and Ms. Cotter is the product marketing director at Science Applications International Corporation in San Francisco, CA.