It's a question that's also on the minds of vendors, end users, IT professionals, and others lately. The healthcare landscape has changed dramatically in the past three to four years with the advent of the Accountable Care Act (ACA), meaningful use, and changes in radiology group dynamics, hospital operations and staffing, and so much more. All of this has significantly affected PACS.
PACS consultant Michael J. Cannavo.
For decades, PACS was implemented as a standalone system, with purchasing decisions and use almost always addressed by radiology. That's largely changed now that PACS and most other clinical imaging and information systems are being looked at as part of an integrated electronic health record (EHR).
The IT department, along with the chief information officer (CIO), chief technology officer (CTO), and others, is becoming firmly entrenched in the decision-making process, not just for PACS but for nearly all clinical systems. Budget dollars for systems used in radiology often come not just from radiology, but also from IT and even the general hospital operating budget. Radiology is no longer an island of automation as it was in the past.
While that's great news for radiology from a budgetary standpoint, it comes with the trade-off of radiology not being able to unilaterally select the PACS it feels will meet its needs. This is especially important in decisions that affect the enterprise and incorporate multiple areas, such as vendor-neutral archives (VNAs), disaster recovery plans, speech recognition systems, and medical image sharing.
So can PACS survive as its own IT discipline, or will it simply be absorbed as just another component of an EHR? I believe it can survive. Let's take a look at why.
Lean and uncertain times
Some facilities today have had their budgets cut in half or more. This has resulted in equipment that used to be replaced every four years or so now being stretched to last six or seven years or longer.
The new mantra in healthcare is if it's not absolutely necessary, it's not going to happen. Needs supplant wants, and cuts are being made in areas that were once considered sacred. Full-time equivalents (FTEs) is the first area being looked at closely to save money. Full-time employees are being replaced more and more by part-timers to avoid paying benefits.
Each individual's role and responsibility is also being closely reviewed to see where positions may be consolidated to further save money. Budgeting for capital dollars is now performed sometimes two to three years in the future, and yet there remains no guarantee of availability of funds when the time comes for its release. This all affects PACS.
Lately, several major companies offering PACS have spun off the divisions that contain PACS operations. They have also consolidated and in some cases eliminated positions. Both of these changes are being made in an effort to show profitability for shareholders, although in the case of the thinly veiled spin-offs, several companies are also looking to get out of areas like PACS where they haven't shown high profitability in recent years.
While such changes may be great for shareholders, they are lousy for both end users and the companies themselves. Fewer individuals to address customer needs generally means poorer service. That, in turn, affects user satisfaction levels and ultimately increases attrition. And in PACS, a vendor having minimal to no attrition is the name of the game. Even the loss of a single account can cause heads to roll.
PACS vendors make their margins on service and project management costs (implementation, training, interfaces, etc.), not on hardware or software sales. Most hardware costs are passed through to buyers and, if anything, can be considered a loss leader. While many facilities feel they can save money by buying their own hardware, it has been my experience that it is always best to buy from the vendor whenever you can.
Interestingly, some vendors are getting away from -- or at least trying to get away from -- providing hardware for that very reason. If there is no money in it, then why provide and support it?
Unfortunately, with a PACS it's almost impossible from a support standpoint to separate hardware issues from software-based ones. That said, you probably will only see user-provided hardware with VNAs and in other areas where a fairly clear-cut demarcation line exists between software and hardware.
Such a line doesn't always exist with servers, workstations, and other devices in a PACS. What makes it even more challenging is the use of Web-based image-viewing software (also known as "unified viewers") that gets installed on different computers, all with different operating systems, Web browsers, and, of course, application software that can easily conflict with the image viewer.
What will it take?
So what will it take for PACS to survive as an independent discipline? Simply put, PACS will only survive if both vendors and end users change the way they currently do business. Both need to recognize that PACS is no longer purchased in a vacuum, but rather as part of an integrated EHR. This also entails turning over a large degree of the decision-making process to IT, as well as having the vendor's product messaging address the needs of the entire enterprise versus just the radiology department.
Vendors need to make significant changes to the way they do business. While eliminating positions, also known as "right-sizing," might help the bottom line from a profitability standpoint, it does nothing to help customers or ultimately the company in the long term. It also increases the load of existing employees who have to pick up the slack from the eliminated positions.
One of the interesting things I heard from clients while I was working for a major vendor as a strategic accounts manager was how little they saw their sales rep. When I asked the sales rep (aka the "account executive") why he hadn't been to the customer's site in more than two years, his answer was, "They haven't bought anything from me since then, so I had no need to see them."
This attitude of what's in it for me benefits no one. Had that same customer threatened to deinstall the system (remember my earlier statement about attrition), Jesus and his 12 disciples would have shown up en masse to try to save the account. Customer visits should be done at the right time and as needed.
Ideally, customers should see their sales rep at least once a year but have contact with them much more often. These don't need to be direct onsite sales calls; they could be through providing educational (nonpromotional) webinars, information on regulatory changes, new product offerings, strategies relative to meaningful use, information on PACS operation and optimization, and so on.
Showing up only when the customer is incensed is, in my opinion, tantamount to a husband bringing flowers to his wife only when it's obvious he has screwed up yet again. It's superficial at best and does little to address the underlying issues. Sadly, customers are as much to blame as vendors and rarely express their disappointment with a vendor until the issue has boiled over. By then, it takes a lot to get over it.
For PACS to survive, vendors need to consider the following, though this is by no means a complete list:
Stop selling: Any vendor who sells in this day and age won't be around long. Sales today is nothing like sales of several years past, yet I still see companies taking last year's quotas that often weren't met and increasing them by X%. That is the classic definition of insanity -- doing the same thing and expecting the outcome to be different. In today's healthcare environment, it isn't about selling products and services. It's about understanding the customer's needs and wants and addressing them in ways that allow them to make technically, operationally, and financially sound decisions for everyone.
Focus on margins, not sales: Instead of trying to hit a predetermined sales number, companies should measure a rep's performance on net margins. A rep who sells $2 million in products and services with an average 15% net margin is no better on paper than one who sells $1 million at 30%. The difference, though, is the one who sells $1 million is probably working with his or her customers to meet their needs, while the one selling $2 million may be selling just to hit a number. This is not meant to be a hit on reps, but just on the way the game is played.
Manage customer expectations: What you can and can't provide is pretty well-known. Somewhere, though, the mantra "underpromise and overperform" has gotten twisted. In fairness, vendors shouldn't get all of the blame for this. End users often hear what they want to hear, so it's always best to put promises and expectations in writing so everyone is clear on the who, what, where, when, why, and how.
Understand that it's a partnership: It's not "What can I do for you?" or "What can you do for me?" but instead "How can we help each other?" Webinars that educate clients on changes in the healthcare environment are crucial to the success of any organization and cost very little to do. Put on a webinar about regulation changes relative to CT radiation dose management and you may sell a dose management software package. Ditto with mammography, peer review, critical results reporting, image distribution, and so much more. Webinars are even better if continuing education (CE) units are offered to help maintain licensing, as many PACS administrators are former x-ray techs as well.
PACS survival also requires customers to consider some of the following:
Know your operation: Know your workflow inside and out, including what has and hasn't worked, and be able to share that with the vendor.
Know your PACS: Nobody knows your PACS better than your system administrator, so get with him or her to better understand how the system is operating and what updates and upgrades you might want to consider. Also, if you haven't had your PACS looked at in the past few years, you might want to consider obtaining an objective outside opinion -- not just on the PACS operation but on any workflow changes that may improve your overall operation.
Prioritize your needs: I'd like to win $200 million in the Powerball drawing, but winning $5 is enough to buy lunch and is a more reasonable expectation. It's always good to make up a list of prioritized needs, followed by prioritized wants and nice-to-haves.
Stop focusing on money: Instead of saying, "I have this much budgeted," look closely at the return on investment (ROI). If what you are considering can show an ROI out of the box -- and many can -- then it's foolish to consider not implementing it as soon as possible. The same can be said for any product or service that redirects money from the operating budget (versus capital) to pay for itself.
Larger purchases such as a VNA might dictate money coming from many different budgets (radiology, IT, and other "-ologies," as well as the general hospital budget, etc.), so that no one department takes the hit for upfront purchase costs. Better yet, when dealing with VNAs and the like, just let IT purchase it, maintain it, and do whatever it needs to establish an enterprise-wide data repository.
No one wants PACS to survive more than I do. It has played a huge part in my personal and professional life since the mid 1980s and helped defined who I am. But as with most things, survival is just the beginning. It's not the ultimate goal of all companies -- thriving is.
If vendors and end users of PACS embrace change in response to the needs of each other and the industry itself, then PACS will thrive. Without it, its future is indeed questionable.
Michael J. Cannavo is known industry-wide as the PACSman. After several decades as an independent PACS consultant, he spent two years working as a strategic accounts manager with a major PACS vendor. He has now made it back safely from the dark side and is sharing his observations in this Straight Talk From the PACSman series.
His healthcare consulting services for end users include PACS optimization services, system upgrade and proposal reviews, service contract reviews, and other areas. The PACSman is also working with imaging and IT vendors developing both global and trade show-specific marketing programs using market-focused messaging. He can be reached at email@example.com or by phone at 407-359-0191.
The comments and observations expressed herein are those of the author and do not necessarily reflect the opinions of AuntMinnie.com.
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