© PACS Justification ©

The justification of a PACS should never depend solely upon the reduction of expenses, especially personnel. There are other ways to justify a PACS. This portion presents ideas both in dollars and cents as well as system benefits. The benefits will vary according to your institutional business culture as well as degree of implementation.

Justification of a PACS will provide benefits in three main areas, hard dollar operating costs, soft costs and revenue enhancement opportunities. The easiest component to quantify is the hard dollar operating cost reduction.

There are many operational costs that should be considered when trying to utilize a cost savings analysis. The following are the most common and easiest to quantify:

Hard dollar costs associated with a PACS integration.

Operational or variable costs :

Salaries associated with file room.
Film for copies and image storage.
Collateral materials needed to support hard copy image storage.
Processor Maintenance and Chemicals.
Water and sewage along with the decrease in environmental hazard liability.
Time inefficiencies, retrieving film, searching for lost film, hanging films and copying films.
Purging and storing films.

Space :

Dark room space.
File room space.
Storage for film supplies in both radiology and materials management.

Soft Costs - are realized by determining the benefits outside of radiology. Once determined some of the benefits could be measured prior to installation. To date only assumptions can be made on most benefits as there are not enough PACS installed that fully integrated to hospital operations to quantify.

Increased efficiencies for Physician.

Highly efficient consults can take place without either party leaving their location. This translates into less time wasted for physicians to either meet physically or have the patient schedule visits for consults while transporting images.
Physicians can possibly see more patients as they could easily review patient records from the office.
An integrated PACS could also create patient schedules customized according to the radiologist schedule, as all radiologists do not perform exactly alike.

Decreased operational costs for the hospital are possible.

Full PACS integration allows true centralized schedules with physicians and sometimes even patients scheduling their own exams.
Conflict scheduling is immediately available because the PACS/RIS interface allows resource management as well as physician management.
Results reporting goes hand in hand with image transfer creating less delay in patient treatment therefore potential savings on hospital stays. This translates into a higher competitive edge for contracts with HMOs etc.
Faster treatment allows for a healthier patient population which will essentially help curb the rising medical costs.
With full integration patients physically access the medical system at a reduced rate since a higher degree of information is available remotely. Patients don't have to drive, park and seek directions to find departments for medical information.
With decreased physical contact less ancillary staffing is needed as patient population grows allowing for growth in revenue generating positions.

Revenue Enhancement - occurs as services outside the normal geographic boundaries are provided. Hospitals can partner with the radiologists and staff physicians, to the benefit of both, while extending patient care to remote areas.

Add revenue through remote patient care.

Provide imaging services to remote areas with fewer personnel (physician).
Perform over reads for smaller hospitals and Emergency interpretation services for rural facilities.

Increase the hospital profile through increased physician expertise.

PACS integration allow Hospitals to attract and market specific physician specialists and experts.
Not everyone likes to live in a metropolitan area. This is an opportunity for rural hospitals to compete with larger facilities.

Hospitals can strategically place services.

Merge with other hospitals to strengthen community position and create a hospital services network.
Decrease costly duplicate services through merging.

Managed Care and Capitated Care need not decrease Hospital revenue.

An integrated PACS allow hospitals to compete for contracts with a better understanding of cost of services.

Cost of service increases each time a patient utilizes ancillary services. This Spreadsheet is in Quattro Pro and will give a fair estimate of potential savings with a PACS installation.