White Paper: ASPs in Healthcare

Application Service Providers in Healthcare:
The Movement Toward Leasing Software, Hardware and Information Technology Services

(outhead)
The Growing Trend in Healthcare Technology Accelerated by Internet Delivery
“By 2003, about 70 percent of physician offices may be using software on a Web delivery system, as well as electronic commerce,” predicts Mark Anderson of Meta Group Inc., a Stamford, Conn. consulting company.

Overview

The days of every healthcare organization (HCO) owning all of its software, hardware, networks, databases and technology centers and employing a full information technology staff soon may end. The GartnerGroup states [Followed by long quote]... And the Forrester Research predicts [Followed by long quote]… The rapid movement toward leasing software, hardware, networks and IT services is fueled by several converging factors causing healthcare organizations to rethink their IT resources strategy.

Problems in Healthcare IT

HCOs are feeling the impact of significant — and growing — capital investment in IT resources. The GartnerGroup states [Followed by long quote]… HCOs see investments in software, hardware, networks, databases, maintenance and people claim an increasingly larger piece of the operating pie.

With an IT labor shortage, workers are hard to attract and retain. HCOs compete against businesses paying higher salaries to hire and keep skilled IT workers. Some even pay technical workers what they pay doctors — and still experience high turnover rates.

Implementing system changes in-house often takes 12 to 18 months. First, projects compete for IT time and resources. Second, designing changes, implementing and testing is a complex, detailed process requiring full focus. Once started, projects to streamline operations or fix problems are a year or more away from running. With mission-critical projects waiting, tying up resources on 12- to 18-month projects is often seen as providing a low return on investment.

HIT is bombarded daily with rapid technological advances. There are multitudes of technology choices, each with varying features — and new generations reach market daily. Selecting new technology or components that would work best in an individual healthcare environment can be frustrating and overwhelming.

It can take years for an IDN to implement an enterprise-wide suite of applications. Linking several locations and even more departments using different equipment is tremendously complex. And during the years the project is underway, healthcare staff continues to work with existing limitations, lower efficiency and productivity.

HCOs running a range of applications often work with multiple vendors. With up to 50 vendors supporting one IDN, managing multiple technology partners — local, regional, national and even international — is a job in itself. Performance, maintenance, support, system compatibility, upgrades and end-user training are just a few issues varying by vendor.

Buying software requires significant up-front as well as maintenance and support costs. HCOs buying software pay for one-time software licenses, based on the number of users — plus the up-front cost of installing the application on each PC and training users. Then, ongoing maintenance and support in-house claims an annual cost and resource commitment equaling 75 percent of implementation [per ebaseOne]. Most organizations can afford neither high-end functionality when purchasing nor installing updates later.

The ASP Solution

For these reasons and more, healthcare organizations are turning to Application Service Providers (ASPs) as a solution to their IT needs.

What is an ASP?

An ASP is a provider of software-based services that are delivered to customers over the Internet or a wide area network. The ASP leases its (or another company’s) software and manages information technology and network systems to the HCO — providing the infrastructure and bundling services to deliver the application to end-users.

In short, an ASP provides an alternative method of delivering software to end-users — instead of buying or licensing software, an organization leases or rents it. The technical term describing these services is application hosting. The ASP hosts the application on its servers and network and the HCO time-shares or rents the application.

ASPs typically provide:

• A data center supporting 24x7 application and server system administration
• A backup data center for uninterrupted service
• Network services supporting applications across WEB and WAN
• Scalable hardware platforms
• Database storage
• Thin-client architecture that allows the application to run using networked personal computers
• Front-end portal access and connectivity
• Skilled IT staff
• Security features such as encryption, firewalls and hardware and software technology
• Maintenance, support and application enhancements

Because the HCO “time-shares” the ASP data center site, its major IT infrastructure costs are eliminated. Spreading infrastructure costs across many organizations creates economies of scale for the ASP that, in turn, lowers each HCO’s cost of providing the application throughout its enterprise. HCOs lease the software on a cost-effective per-month, per-member-per-month or per-employee-per-month basis.

The ASP can be compared to a telephone company, bundling complex services and technology to deliver a simple, easy-to-use service to end-users...

The ASP Solution from Per-Se Technologies

Per-Se Technologies, Inc. is a global leader in delivering comprehensive business management services, financial and clinical software solutions, and Internet-enabled connectivity...Per-Se has provided physician billing services from remote data centers for a number of years. These services are delivered to more than 9,000 users through technology solutions accessed over the Internet or wide area network. Current Per-Se ASP offerings are…

Besides having ASP experience and being a leader in data center and technology expertise, Per-Se specializes in designing solutions specifically for the healthcare industry, including developing the software applications it offers.

Every Per-Se ASP solution will include: front-end portal access; Internet connectivity; the software application; data center hardware, database management; security features; guaranteed uptime, with backup through two data centers; 24x7 operations, monitoring, maintenance and support; skilled IT infrastructure personnel; consultation, planning and design; installation and testing; and training.

Internet-delivered ASP Services: Tomorrow’s Technology Today

In today’s accelerated global business environment, delivering applications over the Internet is rapidly becoming the norm in application procurement. HCOs are finding that ASPs’ application technology and services significantly reduce IT infrastructure costs and turnaround time for delivering application functionality to end-users enterprise-wide — and free them from IT risk, cost and complexity to focus on the business of providing quality healthcare. The speed, cost-effectiveness, security, performance and ease of operation ASPs offer are changing forever the way healthcare providers do business.

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