PACS Business Case Study Budget Term Paper

Excerpt from Term Paper :

Estimates of cost savings from the reduction in film costs as well as through reduced work hours needed for the creation of images and the reading of images by physicians will lead to an average annual cost savings of between five hundred- and seven hundred and fifty-thousand dollars a year, leading to an overall cost benefit of one hundred- to three hundred and fifty-thousand dollars a year compared to traditional film production techniques (Hoffman 2008; Rath 2010). A ten percent reduction in costs could be achieved through increasing the competitiveness of a the bidding process amongst companies that produce the technologies necessary for a successful PACS, as well as through reducing the time and personnel involved in training programs. This latter is not especially advisable, however, as indirect costs will likely be created though reductions in the efficacy of the adoption and a reduced improvement in treatment efficiencies and speeds (Kalyanpur et al. 2010). At these rates, breakeven points typically occur within a decade of adoption, with immediate benefits to cash flow apparent for most institutions (Hoffman 2008).


Given the degree to which these technologies have been vetted and supported in the literature, the risks of PACS adoption are minimal. There is some possibility of decreased cost benefit and prolonged breakeven periods due to unforeseen costs, and there are also risks associated with the safety and reliability of digital storage systems for medical images (Cannavo 2005; Kalyanpur et al. 2010). The management of initial costs and providing the necessary for funds for system maintenance and archival processes will mitigate these risks to a large degree, however.

Service Management

The governance of this project will fall primarily to the administrative and medical heads of the radiology and/or imaging department(s) at the identified medical institution, as it in is this/these departments that the changes will be implemented. Staff physicians and other personnel that utilize medical imaging equipment will need to be apprised of the changes, though the actual job functions for many individuals will not be impacted. Equipment procurement will be handled by appropriate administrative staff under the guidance of lead physicians/medical department head(s), and IT staff will be brought in to ensure compliance with existing technological standards. These standards are primarily important to ensure compatibility with other institution equipment and with the equipment and software that exists in other offices and institutions to ensure portability and communicability.

Though there are many complexities that will result out of the transition from traditional film-production imaging and reading techniques to the utilization of a PACS, the steps necessary to achieve this transition are actually few and relatively straightforward. Purchasing and installing the equipment, while dismantling and disposing of obsolete film-based equipment, is the initial step in this transition process; training is really the only other step that needs to occur prior to completing the transition to this technology. The ease of use of this technology once basic steps are mastered will allow for a very quick increase in the efficiency of use, leading to practical benefits from the transition almost immediately.

Change Management

Despite the relative ease of this transition, there will of course need to be some explicit measures for change management put into place in order to ensure that there is no interruption in the provision of medial services in the medical institution. Personnel training can take place concurrent and even prior to the purchasing and acquisition of equipment, limiting the practical difficulties that can arise for physicians and technicians and increasing the positive aspects of the user experience (Kalyanpur et al. 2010; Tan & Lewis 2010). Department heads will manage the transition of operations from the traditional mode of image processing and reading to the use of the new technologies, while administrative staff and IT personnel will handle the practicalities of actually obtaining and installing the necessary equipment and software and ensuring compatibility with other institutional equipment and processes.


PACSs require a significant amount of upfront expenditure, though these costs are in no way prohibitive to most medical institutions of medium size or larger. The cost benefits that they provide over the long-term lead to a breakeven point between five and ten years after initial adoption of the technology, however, and continued savings on a significant basis beyond this point. The benefits of added clarity and hugely increased efficiency and portability of the images produced are also major assets of this technology, and represent indirect cost advantages as well.


Cannavo, M. (2005). "The new PACS puzzle: Cost and technological change." Imagining economics (July). Accessed 20 October 2010.

D'Asseler, Y.; Koole, M.; Van Laere, K.; Vandenberghe, S.; Bouwens, L.; Van de Walle, R.; Van de Wiele, C.; Lemahieu, I. & Cierckx, R. (2000). "PACS and multimodality in medical imaging." Technology and health care 8(1), pp. 35-52.

Jackson, P. & Langlois, S. (2005). "Introduction of picture archiving and communication system at The Townsville Hospital." Australasian radiology 49(4), pp. 278-82.

Kalyanpur, A.; Singh, J. & Bedi, R. (2010). "Practical issues in picture archiving and communication system and networking." The Indian journal of radiology & imaging 20(1), pp. 2-5.

Hoffman, T. (2008). "Beyond Film." Computerworld 42(19), pp. 32.

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Rath, P. (2010). "The cost effectiveness of implementing picture archiving and communication systems (PACS) in the operating room." Current orthopaedic practice 21(1), pp. 89-93.

Shakeshaft, J. (2010). "Picture Archiving and Communications System in Radiotherapy." Clinical oncology 22(8), pp. 681-7.

Slomka, P. & Baum,…

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