Healthcare industry finances are still rocky post-pandemic. Many smaller practices are feeling the pressure to cut back on expenses. Independent practices struggle with decreasing reimbursement rates. There is a tremendous cost burden to keep up with regulatory pressure. Malpractice insurance premiums continue to rise. To top it off, technology and equipment infrastructure costs are expansive.

It's no surprise that practices that handle medical images would question the cost of their cloud service. But will doing away with that cloud image service and moving back to an onsite PACS really save you money?

While the monthly or annual costs of a cloud service can and should be compared with those of an on-premises PACS, it’s also important to understand the other ancillary costs of each.

LICENSE FEES
The ongoing license fees of an on-premises PACS are likely going to be lower than those of a cloud PACS. How much lower generally depends upon your vendor and the volume of your image storage.

HARDWARE / SOFTWARE COSTS
Cloud imaging platforms enable you to use existing equipment and don’t require exotic or expensive purpose-built hardware. A PC capable of running your PACS will likely cost you $2-3,000. Most IT professionals will suggest that images are stored on a separate server with a RAID array.  That may add another $3-5,000 depending upon your volume. Using a RAID is recommended over storing your medical images on a single computer or hard drive to reduce the risk of a single drive failure causing data loss and leaving you exposed to the potentially reputational, legal, and financial ramifications of having lost patient data.

HARDWARE OBSOLESCENCE
Computer hardware generally has to be replaced every five or so years as the hardware wears out and technology is leapfrogged by newer equipment. Take the costs above and figure you are going to spend an equal amount every five years. Hard drives have a mean time to failure of even less than that. Couple this with data retention requirements that often require medical imaging and records be stored for 7 to 10 years or longer and you will likely have expenses related to migrating data to newer hardware over time to stay compliant. 

RISK OF FAILURE
Systems that are not adequately backed up can and will fail. Unfortunately, most backup systems are fallible and that often occurs at the worst possible time. A total system failure has been known to shut down a practice entirely and worse, might cause personal liability for the principals.

OFF PREMISES BACKUP 
This is highly recommended but adds to your costs.  Backup systems may require time consuming migration from backed-up data costing a practice precious time. Having an off premises failover PACS will likely cost you upwards of several thousand dollars per year.  Just storing files that will require migration and recovery – usually taking more than a day – can cost you $1,000 per year.

IT SUPPORT
On premises imaging platforms require someone in the practice, whether this is an employee or consultant, to be on call in the event of an issue. IT support people charge upwards of $100 per hour to service your systems. Additionally, there is currently a shortage of trained IT professionals, making it a difficult position to fill. The U.S. Bureau of Labor and Statistics estimates that there are currently over one million IT jobs without trained professionals to fill them.

COST TO SHARE IMAGES
Most on premises image systems require burning of disks to transport an image. Burning a CD, when done in bulk can cost more than $10 each. Add to that the cost of postage and you are likely nearer to $25 each.

ACCESS FROM ANYWHERE
Most on-premises PACS are only accessible within the office, restricting productive hours to only those in the office. If your work is distributed  between more than one facility, or want to be able to access images after hours or while out of office, or potentially from multiple devices, this likely won’t be possible with an on-premises PACS. How much is your time worth?

When you add this all up, you might be surprised. The total cost of managing your images in-house will likely exceed the cost of a cloud platform, often significantly. You will also lose the benefits that caused you to move to the cloud in the first place, including redundancy of backups, not having to deal with hardware and in-house IT, sharing images, and remote access to data.   

So, if you’re weighing the costs between an on-site PACS and the cloud, do the math. Staying in the cloud is usually the more effective choice.

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