It’s Software … It’s a Service … It’s ASP!
If you have been shopping new practice management or electronic health records software lately, you may have come across a new (and not so new) alternative to the traditional purchase/lease option. The model is called ASP or application service provider, and although it’s being hyped as new technology, outsourcing and remotely running applications (also know as hosting) are not new concepts.
According to the ASP Consortium, “An ASP deploys, hosts, and manages access to a packaged application to multiple parties from a centrally managed facility. The applications are delivered over networks on a subscription basis.”
So the question is, “What are the benefits of using an ASP model, and does it make sense for my practice?” Clearly, there is no one-size-fits-all rule, but because of the significant expense of quality software applications, the advancements in technology and Internet connectivity speed (a.k.a., “bandwidth”), ASP solutions are becoming more and more popular.
Most ASPs locate the server(s) and software at a secure data center, also called a “collocation” facility. Customers access the software from their desktop computers or remote access points via the Internet, virtual private networks, or private secure lines. The use of the Internet is not mandatory in an ASP offering, although it makes for an appealing option, both for ease of access and from a cost standpoint. Because of this unique configuration, the cost of supporting the IT infrastructure (servers and databases) is shared among all of the customers who therefore enjoy economies of scale and pay lower fees. Meanwhile, each ASP client’s data is separated into unique databases so that patient and practice confidentiality is never breeched. Additionally, collocation facilities are structurally built to be secure from natural disasters, power issues and theft by utilizing concrete construction, millions of dollars of power, battery backup, and air-conditioning equipment (with surveillance, biometric scanning identification, and controlled access for all who physically enter the building itself).
Most ASPs purchase the rights to license the specific application software that they host from the actual software vendor. The ASP then “rents” the application(s) to its customers. ASP customers access the “rented” application from their remote location while the ASP operates and maintains the software and data center on the customer’s behalf. Some ASPs also provide implementation, training, and support of the hosted applications, thereby offering a single point of contact for all customer interactions and a truly single source solution for their clients.
The “rent” ASPs customers are charged is usually a monthly subscription fee. Since they avoid large initial licensing fees, hardware procurement costs, and other resource expenditures, practices can afford access to top-of-the-line applications that otherwise may not fit into their budgets. Instead of paying a large up-front bill to an EHR vendor, or borrowing $30,000–$50,000 per physician, you’d pay the ASP a monthly fee that typically ranges from $300 to $800 per doctor.
This pricing fits well with the return on investment (ROI) formula that many EHR vendors tout. ROIs for the better EHR systems are three to five years, assuming $30,000–$50,000 per physician. For reference, most of the ROI savings are from medical records staff and transcription costs as well as increased efficiency from access and transmitting information electronically and not limited to the paper chart and hardcopy document routing and management. In the ASP model, knowing there is limited initial expense for procuring computer, printing, and scanning devices, the ROI comes much sooner, with some practices realizing breakeven or even cost savings within three to four months.
But ASP may not be the right or best solution for all practices. Some larger practices may already have significant investment in IT infrastructure and technicians on staff. Others are not comfortable with the concept of not “owning” the software license. Another concern is the ASP company itself. As you might expect, there are some companies that purport to offer all the benefits of the ASP model but have not made the investment to host, manage, support, and protect their clients’ data, so make sure you do proper diligence on prospective ASP vendors, their hosting facilities, and their financial stability to provide the service and support you will need. Another concern is that not all software is built to run in an ASP setting, so speed and access can be limited or severely impacted.
As I stated earlier, there is no one-size-fits-all, but ASP is here, it’s happening, and it may be an excellent way to implement and leverage technology to help your practice now and in the future.