Budgeting for PACS
PACS Support Unit, Department of Radiology, Princess Alexandra Hospital, Brisbane, Australia
There are a number of models for the acquisition of
digital image management systems. The specific details for development of a
budget for a PACS/RIS acquisition will depend upon the acquisition model �
although there are similarities in the overarching principles and general
information, particularly concerning the radiology service requirements that
will drive budget considerations.
While budgeting for PACS/RIS should follow the same
principles as budgeting for any new technology, it is important to understand
how far the implementation of digital image management systems can reach in a
healthcare setting. Accurate identification of those elements of the healthcare
service that will be affected by a PACS/RIS implementation is a critical
component of successful budget formation and of the success of any business
case and subsequent project that relies on those budget estimates.
A budget for a PACS/RIS capital acquisition project should
contain capital and recurrent elements. The capital is associated with the
acquisition of the system in a purchase model and capital budget may also be
required for upgrade � depending upon a facility�s financial management
The recurrent (or operational) cost component for the
PACS/RIS is associated with maintaining the system(s) in a sustainable
It is also important to consider the service efficiencies,
cost savings and service quality improvements that PACS/RIS can generate and
include these factors into the economic analysis of any proposal for a PACS/RIS
Keywords: PACS, budget, radiology, purchase
Moving a radiology service from a film-based service to a
digital image management (filmless) service through implementation of a Picture
Archive Communication System (PACS) and associated
Information Systems (e.g. Radiology Information System (RIS)) requires
consideration of a wide range of relevant topics [1, 2], including:
- Medical imaging service requirements;
- User requirements;
- Workflow analysis;
- State of the technology (i.e. current systems capability);
- State of the market (i.e. current product offerings);
- Indicative financial expenditures � capital and recurrent budgets; and,
- Cost/benefit or cost/effectiveness analysis.
This information is generally part of the investigation as
to whether a PACS project is a feasible initiative. It should be a preliminary
phase that informs a decision to commence work on technical and performance
specifications  prior to the establishment of a procurement exercise.
The budgeting component is a very important part of the
business case development  and is crucial to any assessment of the economic
viability  of the proposed PACS/RIS initiative.
Budgeting for PACS/RIS should follow the same principles
as budgeting for any new technology. However, implementation of digital image
management systems will have far-reaching effects in a healthcare setting �
impacting clinical workflows and creating opportunities for improved
efficiencies and quality improvements. Accurate identification of the various
elements of the healthcare service that will be affected by a PACS/RIS
implementation is a critical component of the budget formation process and of
any business case and subsequent project implementation that relies on those
Budgets are usually identified as capital and recurrent
. It is no different for PACS/RIS. The capital budget estimate identifies
the probable costs to purchase and implement the technology. The recurrent budget
estimate represents the projected future costs of managing and maintaining the
system in a sustainable operational state.
PACS Acquisition Financial Models
When acquiring a PACS/RIS, the specific nature of the
budget will depend upon the model of acquisition. There are a number of such
- Traditional purchase: In this model the technology is purchased outright
and owned by the institution. It is usually managed by the institution (i.e.
PACS Administration) with the vendor providing technical support under a
service contract arrangement. It is possible (but not yet common) for support
to be provided by third-party providers.
- Application Service Provider (ASP) Model: In this model, the facility
purchases a �service� from the vendor. The vendor then implements and manages
the system with charges based on fee-per-service arrangements. The facility
does not own the hardware or software (but should own the information). This
model moves some of the capital acquisition costs into the recurrent budget,
spreading that expenditure across the life of the system.
- Hybrid ASP Models: The extent of the ASP model may be limited to (e.g.)
archiving with the facility taking responsibility for and ownership of (e.g.)
reporting workstations and interface hardware/software.
- Leasing Models: Rather than purchasing the technology outright, a
facility may choose to lease. This effectively moves all of the capital budget
requirement into the recurrent budget. By doing so, it spreads the capital
expenditure across the life of the system. Leasing can also have some financial
incentives (e.g. taxation benefits) in a private sector context.
In the public sector, the most common method of acquiring
this technology has been through a traditional purchase (i.e. Model (a)) where
the facility buys and owns the system.
Analysis of Budget Components for Traditional Purchase of PACS/RIS
The following discussion is based on a public sector
PACS/RIS traditional purchase acquisition model. It illustrates how a capital
and recurrent budget might be established for this model. The discussion
presents questions that will need to be asked and answered in order to provide
information necessary to establish project scope and obtain accurate budget
estimates. Similar questions will also be pertinent to establishing budgets for
the other acquisition models noted above.
Capital Budget Component Items for establishment of a PACS/RIS Acquisition
The image archive in a PACS is the repository of medical
images and must be able to store images and allow retrieval of images for
clinical use. A PACS archive will typically consist of a number of levels of
storage in order to balance cost, reliability and speed of retrieval.
Level 1 storage is designed to retain images in a high availability
state for rapid retrieval for use in patient diagnosis and therapy. This is
called the period of clinical usefulness and may range from hours to years
depending upon the patient condition. Level 1 storage is sometimes referred to
as archive cache and usually consists of high quality, high reliability hard
disk arrays. Images outside the defined period of clinical usefulness are
usually stored on more cost-effective storage media, to meet mandated
legislative storage requirements � e.g. digital versatile disk (DVD), compact disk (CD), magnetic tape and more recently on lower cost high volume disk arrays.
This is Level 2 storage and comprises the major volume of the image archive.
The budget requirement for the archive will depend upon
the storage size requirements so the following questions need to be addressed:
- How much storage is required initially?
- What is the projected growth in storage requirements?
- What is the defined period of clinical usefulness and how much cache is
- What is the disaster recovery strategy?
The answers to these questions will depend upon factors
- The clinical workload of the facility and projected growth in that
workload: The PACSNet unit in the Centre for Evidence Based Purchasing of the
National Health Service (NHS) in England has produced a useful storage
calculator tool for estimating PACS storage requirements. This calculator can
be found at the PACSNet website . One strategy for storage acquisition may
be to purchase a minimum amount of initial storage and factor in future budget
allocation to add to the archive storage as growth in requirements demands,
thereby achieving the benefits of future decreases in storage costs.
- Introduction of new and additional imaging technologies (e.g. Multi
Detector Computed Tomography (MDCT)) that may generate additional data growth.
- The records retention and archiving legislation and policy for the
relevant jurisdiction or facility will determine the minimum records retention
time and hence is an important factor in the establishment of archive storage
size. The archive will need to be sized to store images for at least the period
of time mandated by legislation and/or policy. There is a useful discussion of
record retention practices in the USA in the article by Rinehart-Thompson .
- Image cache should be adequately sized to store a majority of relevant
prior studies for rapid retrieval by radiologists when reporting current
imaging studies. This will require a definition (by clinicians) of the period
of clinical usefulness to allow cache storage volumes to be calculated.
- Disaster recovery involves mitigation of risks of data loss due to
events such as fire and natural disasters by having a copy of the archive
located in a separate location to the primary archive. This requirement may
dictate a need for a third level of archive such as a lower cost tape archive
located off-site. In some cases disaster recovery requirements might involve
full replication of the archive in a duplicate data centre.
Medical imaging studies are (usually) viewed and reported
by a radiologist and a report on the findings is produced. This process is
called primary diagnosis. When the radiologist�s report and images are viewed
by the patients� treating doctor, it is called clinical review.
There are two main types of PACS workstations � diagnostic
workstations for primary diagnosis and clinical review stations for clinical
review. Because of the higher performance requirements, a diagnostic
workstation is usually considerably more expensive than a clinical review
Budget requirements for workstations will depend upon the
answers to questions such as:
- How many diagnostic workstations are required? Should diagnostic
workstations be deployed outside of radiology, where primary care decisions are
made? (e.g. Emergency Department, Intensive Care Unit)
- Are clinical review workstations within the scope of the project budget
or are these to be funded from the user areas? What monitor specifications are
required for primary diagnosis and for clinical review? (e.g.
colour/monochrome, spatial resolution, luminance, etc) 
The types, numbers and specifications of server hardware
components will need to be scoped to deal with the projected workload and
required levels of redundancy and resilience within the system. PACS has become
mission critical in the filmless environment so it is important that adequate
redundancy exists to support radiology business continuity in the event of
hardware failure [10,11]. This scoping will require input from information
technology specialists and will require answers to question such as:
- What level of database, archive, RIS, web server and other miscellaneous
server power is required?
- Is there a requirement for redundant power supply in all servers?
- Is server hardware required to create �test� system environments?
- Should there be discrete duplicate (backup) servers with automatic
failover or should there be a complete duplicate data centre?
The strategy for image and results distribution within the
hospital will need to be defined. A common strategy is to use a web-based image
distribution system. In this circumstance it is necessary to determine if the
existing hospital Personal Computers (PCs) are adequate for ward and clinic
viewing of images or if there is a need for clinical viewing stations with
higher specification monitors to be incorporated into the project budget.
The digitisation of medical images facilitates a technical
image management base that makes it possible for:
- hospital clinicians to view images remotely;
- referring doctors to receive images and reports electronically;
- radiologists to report remotely (e.g. from home);
- public sector imaging studies to be forwarded for reading to contracted
private sector radiologists for reading; and
- hospitals to access teleradiology  providers to obtain radiology
These initiatives will generate questions about:
- the funding models for provision of ward and clinic monitors;
- remote access services requirements;
- bandwidth requirements;
- remote radiologist workstations;
- security services; and
- teleradiology arrangements.
A number of these issues are complex � involving more than
just the technical implementation of a PACS/RIS. Decisions and policies will be
required as to the scope of provision of these facilities and arrangements
within the PACS/RIS project versus separately scoped service provision projects
for (e.g.) teleradiology and �user pays� models of funding for (e.g.) provision
of remote access arrangements and review station hardware.
The interface of modalities to the PACS should be a
relatively straightforward set of tasks in a DICOM  conformant environment.
However it should not be assumed that modality connections will be achieved
without difficulties. Allowance needs to be made for these tasks and should
- PACS vendor input; and
- Liaison with and input from modality vendors.
Consideration is required of the number of modalities to
be linked and whether there is any licensing or implementation cost attached to
each modality connection.
The licensing model will also have a bearing on cost.
Questions such as �
- Is the licensing model perpetual or recurrent?
- Is the licensing model based on a �total seats� model or a concurrent
... will impact upon both capital and recurrent budgets
for PACS, web-based distribution applications and RIS. Consequently it is
important to gather information on the total number of users and the likely
maximum number of concurrent users for each of these applications.
Image Viewing for Specialised Purposes
Diagnostic and clinical review workstations will satisfy
the majority of requirements for radiology reporting and image review in wards
and clinics. However there are other �specialty� viewing areas that will
require separate attention. These include operating theatres and clinical
meetings. The following questions should arise:
- How will images be viewed in operating theatres?
- How will images be viewed in clinical meeting rooms?
- What numbers and types of projection facilities will be required?
The required bandwidth for image distribution within the
radiology department and across the hospital can be estimated from existing
image distribution data. It may be necessary to undertake a manual workflow
analysis, counting the number of studies, films and images distributed in the
current environment in order to obtain that data. A budget allowance for these
tasks should be included.
Specialist network infrastructure advice will be required
to determine if the existing network provides adequate bandwidth. Allowance for
provision of such advice (either internally from the Information Technology
(IT) department or via external consultancy) should also be made. Depending
upon the state and capacity of the existing network, a budget allowance for
network enhancements may be required.
It should not be assumed that interfacing the PACS, RIS
and Hospital Information System (HIS) will be without cost. In cases where
separate PACS and RIS vendors are involved, this will almost certainly not be
the case. Similar considerations apply for interface from the RIS to the HIS
and Electronic Medical Record (EMR) if one exists.
The following information will be required in order to
frame this budget component:
- PACS/RIS Interface: Are the integration interfaces and license costs
- RIS/HIS/EMR Interface: What type of RIS interfaces to other information
systems are required? Is there an existing EMR and is an interface to this
record part of the project requirement? What are the interface implementation
It is also necessary to consider how legacy imaging
information is to be managed and include the costs associated with this in the
- If the PACS/RIS acquisition is for a radiology service that is currently
film-based, decisions will need to be made concerning the level of existing
(film-based) image archive required to be transferred to digital form. In most
circumstances this involves manual scanning of studies into the digital archive
and movement of associated reports into the RIS. This body of work must be
scoped and costed into the project budget.
- If the PACS/RIS acquisition is to replace an existing digital image
management system then data migration from the legacy PACS and RIS must be
considered and similarly scoped and costed for the project budget.
Decisions will be required as to whether legacy data (e.g.
reports from the exiting RIS, images from the existing PACS archive) are to be
migrated or not. If migration is to occur, a decision will be required on how
much data will be retained. This decision will be influenced by record
retention requirements and perceived clinical needs. Estimates of the likely
costs of the data migration work will be required. A further consideration is
the time required for migration of legacy image archives. This time can be
significant and although this is not a direct economic factor, it can have a
significant effect upon project timelines. Therefore accurate knowledge of the
likely migration times is an important factor in reaching a decision about data
migration and in terms of overall project cost.
PACS/RIS System Accommodation
There will be a requirement for physical space to house
the PACS/RIS hardware and also to house the PACS Support staff. This space may
need to be fitted out as a computer data centre with associated infrastructure
(e.g. raised floor, cooling, fire suppression, uninterruptible power supply,
It will be necessary to determine if there is an available
computer room or data centre where this hardware can be located, and if so what
is the cost of that location. Alternatively it will be necessary to establish a
dedicated PACS data centre with its associated establishment and running costs.
It will also be necessary to determine the availability
and cost of office accommodation for the PACS Support staff.
Optional System Tools
A number of vendors provide optional system tools to
assist with fault monitoring and performance surveillance. The requirements for
and costs of these optional tools need to be evaluated, decisions for inclusion
reached and budget allowance made.
Examples of such options may include:
- Automated system backup tools
- Monitor performance dashboards
- Server and database fault monitors
- Disk array monitors.
It should not be assumed that automated systems such as
these (that can greatly assist in supporting these systems) are included in the
As the digital environment introduces new and potentially
different workflows into the radiology department and the hospital generally,
there will be costs associated with these changes that need to be factored into
There will be costs associated with training radiology
staff and other system users. There is also a significant requirement for
project planning and project monitoring. This invariably requires the release
of hospital resources to attend meetings. It may be necessary to factor the
costs of these resources into the project budget so that effective release of
the required resources can be obtained.
The issues of change management associated with PACS
implementation are well recognised [14-17]. It may be appropriate to establish
a change management program (either internally or through the use of external
consultancies) to manage the significant work process changes associated with a
As well as allowing for these components, the PACS/RIS
project will need to look at the state of its existing imaging equipment:
- If the facility uses conventional film-based radiography, an upgrade of
plain film modalities will be required to computed radiography (CR) or digital
- If the facility uses analogue fluoroscopy, an upgrade may be required to
digital fluoroscopy or secondary capture devices will be required for image
- If the facility uses analogue ultrasound, an upgrade will be required to
digital ultrasound, or secondary capture devices will be required for image
- Digital imaging modalities (e.g. CT, Magnetic Resonance Imaging (MRI)) will need to be assessed to see if they require additional components (e.g. DICOM Modality
Worklist) in order to achieve maximum efficiency from the PACS/RIS system.
- It may be necessary to undertake a review of, and possible modifications
to, reading room design to optimise the digital reading room environment [18,
Recurrent Budget Components (PACS/RIS)
System Service Contract
This is much more than a simple hardware �break/fix�
arrangement. It will involve hardware elements, software support, emergency
response arrangements, hours of coverage, may include upgrades and will be
complicated by the component warranty arrangements.
A PACS/RIS service contract may be an annual fee that is
somewhere in the vicinity of 10% to 20% of the capital cost of the system.
Consequently it is important to obtain accurate estimates of likely service
contract costs for various levels of support to inform budget decisions.
In establishing the service contract budget it is
important to look very carefully at the component warranties and ensure that
these are factored in. Some components may have a three year warranty. Others
may have a warranty that is as short as three months. Software support costs
may not include a warranty period.
Generally, the hardware service costs will rise to a
plateau over the first three years of the system�s life cycle, as the various
warranties are exhausted. Also there may be price increases factored in for
general inflation. These arrangements are often included in service contracts
and allow the vendor to increase the service costs in accordance with an agreed
formula developed during the negotiation of the various contracts. It may not
be known what the inflation factor is in a budget framing exercise � until the
contract is finalised � but allowance does need to be made for inflationary
factors in the out years of a service contract.
As well as the hardware costs, the service contract should
include software and application support. PACS and RIS use complex database
structures and are often based on proprietary server platforms. These systems
require specialised software engineering support. This is often delivered
remotely through a 24/7 support centre. Support costs generally reflect the
support requirements. They are a major part of the recurrent budget and they
are a critical consideration during contract negotiations. These support costs
will depend upon the model applied and answers to question such as:
- Is a 24/7 coverage required, with proactive database monitoring?
- What level of response to logged calls is required? (30 min, 2 hours,
- What access to on-site field service engineers is required?
- What is the required response time for a field service engineer?
Local PACS/RIS Administration and Support
With a large PACS implementation, there is a requirement
for a local, facility-owned support unit to manage the application and the
vendor. A PACS Administration unit will provide services that are not usually
provided through the vendor support models and include the following:
- On-site PACS Administration � day-to-day system management, upgrade
planning, vendor support management.
- User training and troubleshooting
- System backups
- Higher level (computer-based) clerical activities that may require
- Additional internal IT support (e.g. network support).
Upon completion of an initial PACS/RIS implementation
project, there is a need to recognise that the technology will depreciate (both
in value and relative functionality) and there will be a requirement to upgrade
at some point in the future. It is not unusual for a PACS/RIS to need at least
one version upgrade per year. The licensing for upgrades is often included
within the purchase (or service) contracts. However, the facility will most
likely need to pay the vendor for the professional services to implement the
System upgrades also require inputs from the PACS Support
unit � for planning meetings, training and for on-site supervision of the
various component implementations. Often, upgrades are performed outside normal
working hours and on weekends � to minimise disruption to the radiology
department - this requires additional (local) budgeting for:
- staff absences at training courses; and,
- staff overtime payments.
Vendor�s charges for the inputs to upgrade projects can
include the project planning, project management, engineering inputs (from the
vendor and all subcontractors), deliveries and on-site implementation services,
as well as the hardware and software components.
Savings and Quality Improvements � The Other Half of the Equation
Calculating the purchase, upgrade and running costs of a
PACS/RIS is really only half of the budgeting task. On the other side of the equation
are the cost savings, efficiencies and service improvements that this
technology can bring to an imaging facility.
Savings can include:
- Film costs
- Film stationery costs (packets, jackets, envelopes, etc)
- Chemistry costs
- Film storage and handling costs (including space and file room staff)
- Processor purchase and running costs
- Transcription costs (if Voice Recognition is included in the PACS/RIS)
The incidence of lost studies is vastly reduced with
digital image management, so the need for repeat studies is also reduced. There
are various claims that radiographers can work more productively in a digital
environment. This can support faster patient throughput, involvement in value-adding
clinical image management (e.g. 3-D reconstruction) or a combination of
improved productivity and increased value add to the imaging process [20-22].
The immediate availability of images to the referring
clinicians in a PACS environment is a direct quality improvement for patient
treatment considerations and can lead to shorter waiting times to diagnosis and
treatment and shorter length of stay for admitted patients .
In addition, the implementation of a PACS/RIS can lead to
increased radiologist efficiency and more effective capture of actual
examination data and patient throughput information. The RIS can facilitate
more effective billing. These factors have the potential to improve revenues as
well as the quality of patient services [24, 25].
Budgeting for a PACS/RIS is not a simple process � but the
general principles of budgeting apply. Budget estimates to support
consideration of a PACS/RIS project must be as accurate as possible with all
the elements that contribute to costs considered. Direct cost savings, workflow
efficiencies and service quality improvements must also be considered. These
- Capital purchase costs of the PACS/RIS.
- Installation and commissioning costs
- Any costs associated with imaging equipment upgrades
- Infrastructure costs (e.g. datacentre, network, PCs for image
- Change management
- Staff and accommodation
- Ongoing training
- Upgrade costs.
It is also important to consider the service efficiencies,
cost-savings and service quality improvements that PACS/RIS can generate (noted
above). These factors should be part of any economic justification or business
case analysis. The results of that analysis can then inform a cost/benefit or
cost/justification assessment as part of the budget approval processes
associated with major PACS/RIS projects.
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|Received 5 April 2008; received in revised form 21 July
2008, accepted 26 August 2008
Correspondence: Radiology Support, Clinical and Statewide Services, Queensland Health, 13-15 Bowen Bridge Road, Herston, Queensland 4066, Australia. E-mail: [email protected] (Lawrence Sim).
Please cite as: Sim LH,
Budgeting for PACS, Biomed Imaging Interv J 2008; 4(4):e32