Financial Assessment of a Picture Archiving and Communication System Implemented all at Once

Abstract

The objective of this study was to determine the differential cost between film-based radiology and a hospital-wide picture archiving and communication system (PACS) implemented all at once. The cash flow and running costs of PACS and film-based operation were measured over an 8-year time horizon. When the hospital-wide PACS was implemented over a short period, there was instant conversion into digital film and archives. The net present value (NPV) for PACS operation is US $1,598,698, whereas the NPV for film-based operation is US $2,083,856, indicating a net saving of US $485,157. The payback period is 4 years. The costs of computed radiography and image plates account for 40% of the initial capital expenditure in PACS implementation, followed by computer hardware (30%) and software (9%) costs. Our experience shows that implementation of hospital-wide PACS all at once can produce cost savings. For hospitals intending to go filmless, this study offers a model for financial evaluation of PACS to help in decision making.

Full text

Financial Assessment of a Picture Archiving and Communication
System Implemented all at Once
Ying-Chen Fang, M.D.,
1,2
Ming-Chin Yang, Dr.PH,
2
and Ya-Seng Hsueh, Ph.D.
2
The objective of this st udy was to determine t he
differential cost between film-based radiology and a
hospital-wide picture archiving and communication sys-
tem (PACS) implemented all at once. The cash flow and
running costs of PACS and film-based operation were
measured over an 8-year time horizon. When the
hospital-wide PACS was implemented over a short
period, there was instant conversion into digital film
and archives. The net present value (NPV) for PACS
operation is US $1,598,698, whereas the NPV for film-
based operation is US $2,083,856, indicating a net
saving of US $485,157. The payback period is 4 years.
The costs of computed radiography and image plates
account for 40% of the initial capital expenditure in
PACS implementation, followed by computer hardware
(30%) and software (9%) costs. Our experience shows
that implementation of hospital-wide PACS all at once
can produce cost savings. For hospitals intending to go
filmless, this study offers a model for financial evalua-
tion of PACS to help in decision making.
KEY WORDS: Medical economics, picture archiving and
communicating system (PACS), cost analysis, computer-
assisted radiography, radiology and radiologists
BACKGROUND
P
icture archiving and communication systems
(PACS) reduce the number of unread, retaken,
and lost films. PACS can improve performance
through changes in work flow. Productivity of
technologists is also increased in computed tomog-
raphy (CT) and plain-film studies after PACS im-
plementation.
1Y7
Many hospitals implement the
system gradually, starting with a mini-PACS in
the radiology department. However, because of the
complexity of patient care, films are still produced
for viewing outside the department. Building a
partial PACS in a hospital involves accessory costs.
In many studies, the costs of PACS exceed the
savings.
8Y10
In today’s health care environment,
reducing health care expenditures is a major ob-
ject for hospital management. Whether implemen-
tation of PACS can create net savings through
reduction of film-related expenses remains to be
proven. Pratt et al
10
performed an incremental
cost analysis and found that when film-based
operation was gradually replaced by PACS over
an 8-year time horizon, the department incurred
additional net costs with PACS. At Hammersmith
Hospital in the United Kingdom, where a PACS
was constructed from 1991 to 1996, computed
radiography (CR) was used within the department
but laser-printed images were provided to outside
users until the whole hospital switched to digital
imaging.
11
PACS was associated with significant-
ly increased costs. Our review of the PACS
literature revealed no comprehensive cost analy-
ses of implementation of a hospital-wide PACS all
at once. We tried to build a model for financial
assessment of hospital-wide, full-scale PACS to
1
From the Department of Radiology, Taipei City Hospital
Heping Branch, 33 Sec 2 Chung-Hwa Rd, Taipei, Taiwan,
Republic of China.
2
From the Health Care Organization Administration,
College of Public Health, National Taiwan University, 17
Xu-Zhou Rd, Taipei, Taiwan, Republic of China.
Correspondence to: Ying-Chen Fang, M.D., Department of
Radiology, Taipei City Hospital Heping Branch, 33 Sec 2
Chung-Hwa Rd, Taipei, Taiwan, Republic of China; tel: +886-
2-23889595-2218; fax: +886-2-23889606; e-mail: ycf32@
yahoo.com.tw
Copyright
*
2006 by SCAR (Society for Computer
Applications in Radiology)
Online publication 14 June 2006
doi: 10.1007/s10278-006-0632-6
44 Journal of Digital Imaging, Vol 19, Suppl 1, 2006: pp 44Y51

help in the formulation of strategies for PACS
implementation.
METHODS
The study hospital is a government-owned hospital. It has
482 beds and 100 physicians. The radiology department per-
formed 150,000 studies in 2002. Between 1997 and 2002, there
was a 10% annual increase in utilization of the radiology
department.
By 2004, some imaging modalities had already been
installed, including four conventional x-ray machines, one
DICOM (digital imaging and communications in medicine)-
compatible ultrasound, one CT unit, and one magnetic reso-
nance unit. An older CT unit was already transforming images
into DICOM format by gateway. A hospital-wide PACS was
proposed in mid 2003 and implemented from January to March
2004. As part of PACS, additional imaging modalities were also
purchased, including three high-capacity CR processors and
one autochest CR.
The PACS was fully integrated with a hospital information
system (HIS) via a radiology information system (RIS). The
requested information generated by HIS was transformed into a
modality work list for the DICOM-compatible machine as im-
age tags. The modality performed procedure step allows study
completion information to feed back to HIS.
The reason we chose to move from film-based operation to
filmless all at once was to avoid running costs of dual systems
and to reduce the cost of laser films, which are more expensive
than conventional films. After installation of and education
about PACS, the hospital reached the goal of a 100% reduction
in film within 2 weeks, except in the mammography and re-
mote fluoroscopic units. Because films in outpatient clinics are
the least frequently viewed, we began the transition to filmless
operation at outpatient clinics, followed by the emergency
room and wards. After PACS was fully implemented, two of
the five full-time employees in the film library were dismissed,
and the remaining three switched to doing registration and
scheduling. Besides the supporting staff from the vendor, half
of the employees in the information technology (IT) depart-
ment share the management of PACS. The net present value
(NPV) of the differential cost between film-based operation
and PACS was calculated.
Assumptions
All assumptions used in this research were based on the
experience of five heads of radiology departments, two pro-
fessors expert in administration of health care organizations, and
one professor of computer science. The assumptions were as
follows:
1. An 8-year time horizon is used.
2. A discount rate of 3% is assumed.
3. The number of examined images increases by 5% per year,
with 2002 as the reference year.
4. If PACS were not installed, the hospital would have to
purchase three film processors at years 0, 4, and 8.
5. The PACS short-term storage holds 1 year of recent im-
ages, and the long-term images are stored in redundant
array of independent disks (RAID) arrays, purchased an-
nually according to the amount of image files.
6. Backup tapes for disaster recovery are purchased constant-
ly every year during the estimation period.
7. The annual maintenance cost of PACS is estimated at 5%
of the initial purchase cost.
8. The hardware of PACS work stations used by clinicians
and radiologists can last for 4 years and will be replaced in
the fifth year.
9. The upgrade costs of software PACS are included in the
maintenance cost.
10. Both CR and conventional film cassettes are replaced at a
similar rate and similar prices; it is assumed that there is
no significant price difference between them.
11. The concurrent web viewing for multiusers can cover the
increasing demand for viewing images.
12. The price of computer-related hardware remains the same
during the estimation period.
Differential Cost Analysis
PACS Cost Model
Time zero is the time when the hospital became 100%
filmless. Maintenance for the first 2 years was included in the
initial purchasing contract.
The CR cassettes bought at time zero were guaranteed for
2 years. No additional CR cassettes were needed in the first
2 years. We estimated that from the third year, 10 cassettes
would be replaced annually.
Two database servers perform in a high-availability backup
pattern. The archive server is composed of two database
servers under the database management system of ORACLE 9i
with the function of real application cluster (RAC) and Data-
guard to reach the availability of 99.999%. When there is a
network failure, a plan of manually connecting machinery
directly to a laser printer for temporary film output is used.
Storage is categorized as short-term storage, long-term storage,
and backup tape systems. The short-term storage consists of a
2 terabyte (TB) hard disk; after partition, there are 1.4 TB avail-
able, including 1 TB for image storage. There are two forms of
images, with different compression rates for client-server im-
age viewing and web-based image viewing. The short-term
storage can keep at least 6 months of studies. RAID arrays are
used for long-term storage and are purchased annually. With
the 5% yearly increase in examined images, the annual long-
term storage needed is adjusted by 1-TB steps according to the
amount of image data to be generated.
Two of the five full-time employees in the film library were
dismissed. Besides supporting staff from the vendor, half of the
personnel of the IT department share the management of PACS.
Film-Based Cost Model
Operation costs of a film-based system include the cost of
purchasing and maintaining film processors; the cost of films,
FINANCIAL ASSESSMENT OF A PACS IMPLEMENTED ALL AT ONCE 45

chemicals, film jackets, conventional film cassettes, and film
disposal; and the wages of film library clerks. Previous records
of film-related costs were used to calculate costs of film-based
operation. Ten cassettes are replaced annually. Space in the
film library is kept for archiving old studies.
Net Present Value
When the financial impact of a project is assessed, after
identification of all annual cash flows, the timing of the cash
flows determines their relative values from today’s perspective.
A dollar is worth more today than it will be 1 year from
now.
10,12,13
NPV is estimated according to the following
formula:
NPV ¼
X
N
t¼0
C
t
1 þ r
ðÞ
t
where C
t
is cash flow at time t, r is the discount rate, and N is
the lifetime of the project. The capital expenditure for PACS is
a negative value. The cost savings of film-based operation are a
positive value. NPVs were calculated according to the discount
rate of 3%. The payback period is the time when PACS
produces cost savings compared with film-based operation.
For the sensitivity analysis, NPVs were recalculated for
discount rates of 0%, 3%, and 5%
13
; initial capital expenditure;
annual increase in examined images; CR-related costs; com-
puter-related hardware costs; and maintenance costs, to
compare with the NPV for base-case assumption.
RESULTS
Costs of PACS Operation
Table 1 presents a summary of costs for PACS
operation. The initial capital expenditure for PACS
implementation at time zero was US $699,497.
There is a surge in costs in year 5 because of work
station-related hardware replacement. The NPV is
US $1,598,698. CR processors and CR cassettes
account for most of the cost (40.0%), followed by
work station-related hardware (29.8%), work sta-
tion software (8.9%), storage (8.3%), servers
(7.8%), web access (4.3%), and network (0.9%).
Costs of Film-Based Operation
Table 2 shows the costs of film-based operation.
The NPV is US $2,083,856. The film-related costs
such as films, film processing chemicals, and film
jackets and stickers increased as the number of
examined images increased annually. The costs of
films, chemicals, and film jackets make up 58%
of the total costs, followed by film processor costs
and related costs (22%), and wages for film
library clerks (20%).
Table 1. Costs of PACS operation, 2004Y2012 (US $)
NPV Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
CR readers 203,030
CR cassettes 76,618 15,152 15,152 15,152 15,152 15,152 15,152
Image and database server 54,603
Work station-related hardware 208,736 208,736
Client-server work station
software 62,424
Web server and licenses 30,303
Storage 57,895 6,061 6,061 6,061 6,061 9,091 6,061 9,091 6,061
Network 5,886
Maintenance 34,975 34,975 34,975 34,975 34,975 34,975
IT staff 7,273 7,273 7,273 7,273 7,273 7,273 7,273 7,273
Mammography film and
chemical and film magazine 9,382 9,382 9,382 9,382 9,382 9,382 9,382 9,382
Full-time employee for
administration 36,000 36,000 36,000 36,000 36,000 36,000 36,000 36,000
Film processor maintenance 6,545 6,545 6,545 6,545 6,545 6,545 6,545 6,545
Annual cost 699,497 65,261 65,261 115,387 115,387 327,154 115,387 118,417 115,387
PV 699,497 63,360 61,515 105,595 102,520 282,206 96,634 96,284 91,088
NPV 1,598,698
CR: computed radiography; IT: information technology; NPV: net present value; PACS: picture archiving and communi cation system;
PV: present value.
46 FANG ET AL

Table 3. Incremental cost summary, 2004Y2012 (US $)
NPV Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
Costs related to PACS implementation
CR processors j203,030
CR image plates j76,618 j15,152 j15,152 j15,152 j15,152 j15,152 j15,152
Image and database
server j54,603
Work station-related
hardware j208,736 j208,736
Work station-related
software j62,424
Web server and
licenses j30,303
Storage j57,895 j6,061 j6,061 j6,061 j6,061 j9,091 j6,061 j9,091 j6,061
Network j5,886
Maintenance j34,975 j34,975 j34,975 j34,975 j34,975 j34,975
IT staff j7,273 j7,273 j7,273 j7,273 j7,273 j7,273 j7,273 j7,273
Mammography film,
chemical and
film magazine j9,382 j9,382 j9,382 j9,382 j
9,382 j9,382 j9,382 j9,382
Film processor
maintenance j6,545 j6,545 j6,545 j6,545 j6,545 j6,545 j6,545 j6,545
Savings from film-based operation for 8 years
Dismissal of full-time
employee 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000
Film processors 60,606 60,606 60,606
Film cassettes 15,152 15,152 15,152 15,152 15,152 15,152 15,152 15,152
Films, chemicals,
film jackets 145,533 152,810 160,450 168,473 176,896 185,741 195,028 204,780
Film processor
maintenance 26,182 26,182 26,182 26,182 26,182 26,182 26,182 26,182
Incremental cost
per annum j638,891 181,606 188,882 146,397 215,025 j48,924 171,687 177,944 251,332
Incremental PV
per annum j638,891 176,316 178,041 133,973 191,048 j42,202 143,785 144,685 198,404
Incremental NPV 485,157
CR: computed radiography; IT: information technology; NPV: net present value; PACS: picture archiving and communication system;
PV: present value.
Table 2. Costs of film-based operation, 2004Y2012 (US $)
NPV Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
Film processors 60,606 60,606 60,606
Film cassettes 15,152 15,152 15,152 15,152 15,152 15,152 15,152 15,152
Films, chemicals,
film jackets 145,533 152,810 160,450 168,473 176,896 185,741 195,028 204,780
Film processor
maintenance 26,182 26,182 26,182 26,182 26,182 26,182 26,182 26,182
Film-related employee 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000
Annual cost 60,606 246,866 254,143 261,783 330,412 278,230 287,074 296,362 366,719
PV 60,606 239,675 239,555 239,569 293,568 240,004 240,419 240,969 289,492
NPV 2,083,856
NPV: net present value; PV: present value.
FINANCIAL ASSESSMENT OF A PACS IMPLEMENTED ALL AT ONCE 47

Differential Cost Analysis
The NPV for the differential cost between PACS
and film-based operation for the time horizon of the
project is equal to the NPV for film-based operation
minus the NPV for PACS operation. The NPV for
the differential cost is US $485,157, indicating a
net saving for PACS operation (Table 3).
Sensitivity Analysis
Table 4 shows the sensitivity analysis for each
parameter. The NPV of US $485,157 by our as-
sumptions was the base case.
Figure 1 shows the accumulated present value
for every year of the project. The accumulated
NPV becomes positive at the beginning of the
Fig 1. Accumulated present value. Adjusted payback period is 4 years.
Table 4. Sensitivity analysis
Low sensitivity Base case High sensitivity Comments/reference
Discount rate 0% 3% 5% To undertake a sensitivity analysis, for discounting
and the annutization of capital expenditures, make sure
that this includes 0%, 3% and 15%
13
NPV ($) 645,058 485,157 399,658
% of base NPV 133% 100% 82%
Annual increase in
examined images 0% 5% 10%
At Baltimore Veteran Affairs Medical Center, utilization
of radiology services increased 48% in 3 years
13
.
There was a 10% annual increase in examined images at our
hospital from 1998 to 2003.
NPV ($) 252,954 485,157 767,250
% of base NPV 52% 100% 158%
Initial cash flow 70% 100% 130% When a large number of equipment purchases are to be
made, vendor-estimated discounts of 15Y50% are assumed
for many purchases
3
.
NPV ($) 695,006 485,157 275,308
% of base NPV 143% 100% 40%
CR-related costs 70% 100% 130%
Same as above
NPV ($) 590,471 485,157 201,471
% of base NPV 121% 100% 66%
Computer-related
hardware costs 70% 100% 130%
Same as above
NPV ($) 586,021 485,157 384,294
% of base NPV 21% 100% 79%
Maintenance costs 3% 5% 10% Annual maintenance cost at Hammersmith Hospital is
approximately 6%.
Usual cost of computer-related maintenance (without hardware
replacement) is set at 5%; with hardware replacement, cost
sometimes ranges up to 10%.
NPV ($) 556,593 485,157 306,568
% of base NPV 115% 100% 63%
48 FANG ET AL

fourth year. In the fifth year, with the accessory
costs generated from replacement of work station-
related hardware including diagnostic and physi-
cian usage, the PACS operation shows fewer net
costs than film-based operation. Therefore, the
payback period is roughly 4 years.
After the implementation of PACS, clinicians
are pleased with the new benefits such as saved
time on film archiving, telephone consultation on
images by concomitant image sharing, and a de-
creased number of lost films. The emergency room
and ICU can accelerate patient treatment by
omitting the time used for film transportation. The
outpatient clinics also benefit by the reduction of
patient waiting time for instant imaging reading.
Since the set-up of the filmless environment and
this article was written (an 8-month period), there
has been no server failure except for a 5-h down-
time at night for the entire hospital IP address
change. No exact film output was made.
DISCUSSION
Our study shows that implementation of PACS
all at once can produce net savings. With low
initial capital outflow and a sufficient number of
examinations, a hospital-wide PACS with careful-
ly controlled expenditures brings the advantage of
computer technology and has a favorable eco-
nomic impact.
The keys to success in implementing PACS all
at once include full support of the chief executive
officer, support of clinical physicians, cost savings,
and process simplification. Cost savings are the
main issue in adoption of PACS. The main savings
of PACS are attributable to the tremendous re-
duction in film-related variable costs, followed by
savings in film processors and wages of film li-
brary clerks. When a PACS is set up, the rapid
transformation to a filmless environment is a key
factor in reducing costs. A hospital-wide, whole-
scale PACS set up all at once can produce the
best chance to filmless operation.
However, there are some risk factors associated
with implementation of PACS all at once. Ac-
ceptance by clinical physicians; a user-friendly in-
terface for registration employees, technicians,
radiologists, and physicians; and integration of
HIS-RIS and PACS are the most difficult compo-
nents. The IT and radiology departments should
work together for request for proposal. For the
system to be fully accepted by the physicians, we
had a previous version of mini-PACS for the lim-
ited DICOM-compatible US and CT modalities
implemented in year 2000. Physicians were al-
ready aware of the advantages of PACS and had
the basic idea of image viewing. They viewed
images from mini-PACS while the original films
were being used by other physicians or radiolog-
ists. In planning for a hospital-wide PACS, clinical
physicians had input about the sites of image work
stations, the functions of image viewers, the length
of time for image pop-up, the hot keys of HIS that
bring out images, etc. Before the transition to
working without hard-copy films, the advanced
concept of PACS was introduced to each hospital
department via a scheduled program, and several
hospital-wide briefings of the system were con-
ducted. During the 2-week transformation, the
system was gradually incorporated into outpatient
clinics, then the emergency room and wards. The
members of the vendor and radiology departments
offered on-site consultation to assist others to
retrieve images without hard-copy film.
To establish a PACS, we faced the issues of
multimodality and multivendor scenarios, includ-
ing vendors of system integrators, image viewing
software, x-ray machinery, CR readers, network-
ing, personal computers, high-resolution monitors
for medical purposes, etc. However, our institu-
tion purchased PACS all in one project to simplify
the administrative procedure. A vendor with a
well-established reputation and experience is re-
quired. The multimodality vendors, integrated to-
gether for competition purposes, and a program
manager led the process of implementation.
Those image files from previous mini-PACS
were migrated into the new system. The film li-
brary is still opened for the retrieval of old films.
The film library is still opened for the retrieval of
old films. However, the usage of the service re-
duced rapidly from 20 film jackets per day to 5
per day in 2 months. This number further de-
creased to 10 films per month in 6 months because
the new images were digitized as opposed to being
made into hard-copy films. As a result of the
reduction in workload, two out of five film library
clerks were reassigned to other departments. We
did not plan for space recovery because additional
manpower and space would be needed to move
these old films. Thus, the cost for space of film
FINANCIAL ASSESSMENT OF A PACS IMPLEMENTED ALL AT ONCE 49

library as a sunk cost in both operations was not
included in the differential cost analysis. The
PACS servers consist of two racks and are stored
in the computer room of the IT department that has
been set up for all mainframe servers. However,
after 8 years, the films can be disposed of (thereby
freeing up some space).
The average life of x-ray machines is estimated
to be 8 years. However, computers are usually less
durable than x-ray machines. This means that in
the fifth year of the project, work station hardware
will need to be replaced. Although most compa-
nies replace computers every 3 years, some replace
computers after a longer period for cost saving.
According to the Internal Revenue Service (IRS),
BThe entire acquisition cost of a computer pur-
chased for business use can be...depreciated over a
5-year recovery period.^ We counted on using this
hardware for PACS for 4 years and then purchasing
new materials in the fifth year. This factor was not
considered in most of the existing articles on fi-
nancial evaluation of PACS,
8Y10
or the costs were
probably included in maintenance costs.
For comparison between PACS and film-based
operation, the differential cost should include costs
of film processors and costs of maintenance re-
quired for both types of operation. The costs of film
processors will have a positive impact, in terms of
NPV, on implementation of PACS, as in our case.
In recent years, interest rates have lowered to
historic levels. We used 3% as the discount rate
on the basis of average bank interest rates. As the
NPV is positive, increasing the discount rate would
decrease the NPV by a certain amount, but it does
not make it negative.
Annual incremental increases in the expected
number of images examined have a great influ-
ence on NPV. At the Baltimore Veterans Affairs
Medical Center,
15
use of radiology services in-
creased, in 3 years, by 82% among inpatients and
38% among outpatients after PACS implementa-
tion. Our hospital had a 10% annual rate of increase
from 1998 to 2002. Although we expect (after
PACS implementation) a higher annual increase in
number of examinations, insurance reimbursement
factors have a tremendous impact on the behavior
of physicians. We adopted a modest rate of 5% as
the base case. If there is no increase in number of
examinations, the NPV is still positive, which is
about 24% of the base case. When the volume of
examinations increases more than we assumed it
would, the variable costs of PACS operation will
be the costs of storage of image files—costs far
lower than the variable costs of film-based opera-
tion—and thus there will be a great cost advantage.
The initial capital expenditure is determined by
the PACS design. Minimizing purchase price
without hampering daily medical service is the
key to cost savings. In our design, there is no ex-
pensive form of long-term storage. RAID arrays
are purchased annually according to the expected
volume of image files, and tapes are used for di-
saster recovery. These approaches cut the purchase
price to a large degree. CR processors and cassettes
account for 40% of the initial cost. Therefore,
the need for CR processors should be carefully
evaluated.
Expense of work station-related hardware makes
up 30% of cost for PACS. We have an equal
number of diagnostic work stations and radiolog-
ists. For clinician work stations, imaging graphic
ports and high-resolution monitors were added on
to existing computers if possible. Web design with
a certain number of concurrent users offers the
unlimited image viewing capability for new work
station demand and uses already existing com-
puters, without added hardware costs.
Mammography was not digitized in our design,
because the high costs of direct radiography mam-
mography machines and accessory diagnostic work
stations with 5 K-resolution monitors offset any
savings achieved through filmless operation. For
mammography to be digitized, the number of ex-
aminations should be high enough to achieve
economies of scale. If a mammography screening
center has a high study volume, a separate NPV
evaluation could be performed to help in decision
making. In our hospital, the cost of film-based op-
eration for mammography is less than US $15,152
per year, which does not justify digitization.
Maintenance fee is a highly fluctuating variable
that might include service on software and/or hard-
ware. The maintenance cost is set at 5% of the
initial purchasing price in the base case analysis,
and after plugging in a range of scenarios from 3%
to 10% maintenance fee, the NPV of the project
remains beneficial with the worst scenario being
63% savings.
There are a lot of difficult tasks in PACS im-
plementation. Being a large investment, PACS
requires the support of the CEO. Due to the high
price, cost savings should be expected from the
50 FANG ET AL

installation of PACS. If this was not the case, the
investment would impede the financial structure
of the hospital. For hospitals planning on adopt-
ing PACS, all of the departments in which medi-
cal imaging is generated should plan early and
gradually replaced equipment with standardized
DICOM-compatible plug-in-and-play function.
Otherwise, by upgrading the equipment or insert-
ing gateways (which cannot offer full imaging
adjustment), the costs of PACS will increase.
Cooperation between the IT and radiology de-
partments and general agreement in the entire
workplace are easier to achieve for small- to
medium-sized hospitals. Larger medical institu-
tions may face more difficulties from resolute
physicians who wish to adhere to traditional film
reading. If the equipment in the hospital is mostly
non-DICOM-compatible, the costs of installing
PACS will be higher, and its benefits will be lim-
ited. Also, the computer apparatus may not be as
durable and replacements may be needed earlier
than scheduled, which will increase the cost.
CONCLUSION
PACS can reduce patients’ waiting time,
prompt the management of critical patients,
reduce unavailability of images, increase produc-
tivity of devices and technicians, enable on-line
phone consultation, save time for physicians and
radiologists, and reduce staffing needs.
14,16
Our
study shows that a properly designed PACS can
produce cost savings compared with film-based
operation. For hospitals intending to go filmless
soon, this study offers evidence, obtained through
differential cost analysis, in support of PACS
implementation.
ACKNOWLEDGMENT
I thank Professor Hsin-Ginn Hwang for his encouragement
and advice regarding the content of this paper. I am grateful to
Dr. Ta-Yi Huang and Mr. Tsair-Jin Perng for help in PACS
design and process reorganization. Thanks also to Dr. Ran-
Chou Chen and Dr. Adeline Woan-Chwen Jaw for suggestions
about assumptions.
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