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An Easy and Foolproof Method of Vendor Selection

April 17, 2008
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OK, so that headline is a teaser. You certainly didn’t think I was going to suggest that there was such a thing, did you?

I may be especially cynical right now, after spending the last several days trying to make sensible economic comparisons between two PACS vendors whose offerings are like apples and pastrami.

If you compare our organization to similar ambulatory facilities, I think of us as well ahead of the technological adoption curve. The one place where we’re laggards is in the area of PACS.

This in spite of the fact that we do plain film imaging at eight different locations, mammography at five, CT and MRI at three and have radiologists reading at two. We did about 85,000 billed procedures last year (which, by the way, is not the same as the count of PACS “exams”, as I’m learning.)

In addition to reading all the stuff we do, our radiologists also read for a local hospital. This hospital doesn’t have PACS yet either, so a couple of years ago, in the spirit of cooperation, the greater good of mankind, and not ticking off the radiologists, we undertook a joint effort to select a common PACS system.

For a number of reasons (none of which I’m bitter about), that effort ended badly. By the time we got out from under some other projects our PACS initiative was delayed by a year or so.

We came out of that whole experience with strong positive feelings about Philips, who had acquired the old Stentor iSite product. We had advocated for them pretty vigorously as the vendor of choice for the joint PACS.

We also liked an innovative little company named Dynamic Imaging, even though I had never heard of them when we first started shopping.

If you’ve read some of my earlier posts you might remember that we have an important vendor relationship with GE- subsequent to their purchase of IDX. We use their Centricity Business (Flowcast) practice management, and their Centricity RIS/IC radiology information system.

Prior to Philips’ acquisition of Stentor and GE’s acquisition of IDX, IDX and Stentor were in bed together in the PACS space. In fact, to this day the iSite product that Philips sells sits on top of an IDX-developed relational database.

Philips is in the process of rewriting that whole backend; the “de-IDXed” product is already on the street in Europe, but they won’t release it here until it shakes out a bit. Their plan is to convert all their customers eventually- your guess is as good as mine when that might happen.

The thing that most differentiates Philips in the PACS market, however, is their pricing/delivery/support model. They have adopted Stentor’s strategy of providing only turnkey systems (with the exception of reading stations), providing all the hardware support and upgrades, and charging for it on a per click basis- $X.XX per “exam”.

There are points of that approach that are clearly attractive. Initial capital outlay is reduced, future costs are fairly predictable and tied directly to their related revenue sources, etc. But assigning an accurate valuation to those benefits is NOT easy. (“But did you make a GOOD DEAL?”)

Uncertainties notwithstanding, we had a certain emotional investment in Philips left over from the abortive joint PACS venture with the hospital. It would have been really easy to just take the path of least resistance and slide them through the selection process.

But remember that other little vendor I mentioned, Dynamic Imaging?

Our radiology manager was the first one to bring up their name. I’d never heard of them, so, of course, I was skeptical. Try as I might to discount them, however, they just kind of grew on me.

Part of the attraction was that the system platform is one that we’re very comfortable with. It’s a browser-based application that runs on top of a Microsoft SQLServer database. They are hardware agnostic, so we could use the HP devices that are our standard. Structurally, the system reminds me of our Allscripts EMR.

Throw in the facts that DI got good rankings from the independent evaluators, was attractively priced, and we liked their people, and suddenly you’ve got a horse race.

So why hadn’t they made the cut when we were working with the hospital?

There were probably some politics involved. As we would learn, the hospital really wanted to keep their main vendor in the mix as long as possible.

Then there was the uncertainty. What happens to small, private, innovative vendors that are gaining market share and making a name for themselves? They become part of some behemoth’s strategic plan. (Like, maybe, Stentor and Philips…)

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well said Mark. the main choice of a vendor organization is usually spread around quite a number of factors like size, credibility, ability to service, customer interaction and so on. yet sometimes the smaller fry (if i might put it that way) seemingly a better suited candidate for a project seems to lose out on the race to ion. The main reason can be attributed to the hard-headed mentality that we as decision makers take in business — playing safe or playing game, (and no, they are not the same). Innovation is the key in medical devices business and usually the smaller ones bring this factor in with new business models alike — in the long run these are the companies that get gobbled up by the behemoths as a rule of the game. While the users of this technology often had the need to upgrade to alternate technologies and systems within a short passage of time as support for the innovative yet older systems (erstwhile), shrinks - a normal strategy for the top honchos. While customer support often is the single most important facto to decision making in business often — the safe path is often the ideal path to follow for the biggies who would not want their business suffering downtimes.

as a system integrator our experience of working with various other companies in the PACS area has often thrown us in this predicament - when the customer has actually asked us for advice for ion of the probable vendor in question. While we have often studied & tested both the systems and given the customer our analysis, more often than not the customer had chosen to go with tried and tested technologies citing integration issues and future-ready as the ion criterion. Talk about that!!!!

PS: one of the systems will come in as a safe alternative with credible customer support and in an ideal world is future-proof, albeit with the upgrade cost and other bells and whistles while the other brings in credible and cost-effective technology. Our experience with PACS suggests that the former one can be actually effective over the longer run though not game-changing.

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