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May 10, 2004

Cost Analysis: Film vs. PACS
By Michael R. Orand, RT
Vol. 5 No. 10 p. 38

One of the most common questions on the minds of imaging department heads today is “When is the right time to convert to PACS?” You won’t get far in answering that question without assessing the cost and financial implications of a PACS implementation. This article will focus on the cost justifications and economics of going filmless.

Imaging departments face the constant challenge of controlling expenses. In today’s managed care environment, increasing revenue by raising fees is not a likely option. So to maintain profit margins, departments must reduce expenses and increase productivity. Converting from radiographic films to digital images can result in cost savings over the long term. However, finding a solution that fits your facility can be a delicate balance.

The financial planning for a successful transition from film to digital requires understanding the economics, operations, and market implications related to a PACS. Other factors enter the equation, including facility renovation and infrastructure support.

Careful Audit
Direct costs such as film, chemicals, and record storage immediately come to mind when considering PACS costs. However, there are also indirect costs to consider, such as savings to those who may be accessing films. In most imaging departments, film-related cost is secondary to labor cost. Additionally, when processes change, efficiency increases and productivity may increase.

Consider the following cost checklist when assembling a cost justification:

Direct Costs
Materials. Document the following specific materials costs:
• exam totals per room per modality and calculate the number of films per exam;
• film, chemistry, and service costs on a monthly or annual basis (list for each modality, including portables);
• costs for jackets, labels, markers, and other supplies; and
• related costs for couriers—either internal staff or outside courier services.

Labor costs. Document each salary cost with overhead/benefits on an annual basis for technologists and clerical and file room staff.

Equipment costs. If your equipment is nearing replacement time, consider the difference in cost of newer technology that would bring you into the digital arena. If the radiographic equipment is in good condition but the film processor is not working properly, consider computed radiography. This would bring your largest volume of work into a digital format, making it available for soft-copy display. Newer cassetteless digital radiography equipment is more expensive and should be documented to offset the cost savings related to other elements of a film-based environment.
Software/hardware costs. The annual costs for the modalities can run approximately 10% of the purchase price. However, depending on applications, they can add significantly to the price of the equipment. Negotiate these costs for any new digital equipment.

Indirect Costs
Lost studies. Lost studies fall into two categories: read and nonread. Read studies are completed examinations in which a report was rendered and the examination may be misplaced, but a report is available and patient care was delivered. Nonread examinations have no report for the examination, meaning you cannot charge for the technical component. The examination must be repeated, and the revenue associated with the first examination is lost. A PACS minimizes the issues of lost studies because the image is online, redundantly archived, and accessible to many at one time.

Building/space allocation costs. Facility-related costs vary substantially depending on factors such as mechanical and electrical systems, room sizes, and facility age. With any plan for migrating to a PACS, study changes in tech core work areas where film processors will be replaced with other technology and where film view boxes will be replaced with monitors. Lighting needs changing in reading spaces and a redesign of workspace is often required.

In many instances, newer digital equipment requires more space. However, the ability for one digital room to accommodate the work of two rooms could result in less required space. To achieve maximum throughput, increases to dressing areas or sub waiting spaces may also be required, thus adding to construction and furniture costs.

Infrastructure/archiving costs. While PACS workstations and servers have evolved from being almost cost-prohibitive to affordable, off-the-shelf computer technology, there are costs associated with archiving and storage that have to be carefully studied. When analyzing the server requirements, the statistics captured above for numbers of exams by modality will be used to calculate server requirements. This analysis is typically performed by a PACS or information technology consultant to calculate and analyze file size and speed and determine the extent of data that is in long-term archives vs. short-term storage.

The term “Mini PACS” represents a limited number of modalities producing a digital or video output connected to a server for soft-copy display and perhaps some degree of storage. The main advantage of this is increased availability for images to be read. Other advantages can be achieved if filming is not performed and CDs are the recording device. Once again, the cost of this transition should be studied closely since many sites still use laser cameras to make copies, thereby not capturing the true cost savings.

Referring physicians and nurses. According to a recent study, referring physicians and nurses can spend approximately two weeks per year looking for patients’ films. It is essential to calculate this lost time across an integrated delivery system and include it in the cost analysis.

Once statistics for materials, labor, equipment, and other costs are assembled, an analysis can provide the bottom line cost per exam. This cost per exam can quickly be reexamined within a PACS environment to illustrate the savings per exam. The increase in room turnover and the reduction of steps associated with going filmless can translate into increased volumes and revenue.

— Michael R. Orand, RT, is a senior consultant with Equipment Collaborative, Inc. He has more than 35 years of experience in radiology equipment, room design, and PACS implementation.

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