A while back, Pat Kroken wrote a very popular article for the RBMA that was reprinted by the ACR called Radiology Billing: In-house or Outsource? In this excellent piece she outlined the classic issues of outsourcing. In recent years, however, a third and ever more popular option has arisen which blends the benefits of in-house billing with that of outsourcing – the ASP or Application Service Provider.

The ASP may become even more relevant in time as small radiology groups struggle to stay competitive. It will be harder and harder over time to afford and maintain the best-of-breed applications. This is one way in which the small radiology groups can afford world-class applications.

The classic ASP offering in billing would be for a company to host the billing application on their server and for the billing staff of the radiology group to access that software via a high speed communications line. This approach answers many of the concerns typically associated with the classic in-house versus outsourcing question.

Control
One of the main reasons that radiology groups don’t outsource is the issue of control. They often want their employees doing the work under the direction of their manager. In the classic ASP model, all of the key billing functions (e.g. coding, charge entry, follow-up) are done by the employees of the radiologists. The functions that are off-loaded to the ASP provider are all system functions such as back-ups and troubleshooting.

Information Technology
One reason that radiologists begin looking at outsourcing is the cost of purchasing, maintaining and updating billing software and the hardware to run it on. This cost, when shouldered solely by one group, can be significant. It can also be hard to keep it current. Another significant cost factor is IT support. A small or even a medium-sized radiology group probably won’t need a full-time IT person on staff, but they do need that service at least on a part-time basis. They will have to pay a premium for this service to maintain some level of consistency and professionalism.

With an ASP, this cost is shared among many groups. They can afford to have the technical staff on-site and therefore tend to be up-to-date on technology.

Costs
The ASP company needs to make a profit so that has to be factored in. However, since the costs are being shared, an ASP should be less expensive to use than owning your own hardware and software. The rule of thumb is that the larger the radiology group the less sense an ASP makes. The rule isn’t always ironclad. One of the larger billing companies in the US, Medical Business Service out of Coral Gables, was until recently running all of their operations off of the system of an ASP provider, CPU MMS from San Diego. CPU MMS has been one of the few billing systems until recently that has had an ASP offering that fits the unique needs of radiology. There still aren’t that many radiology-specific ASP offerings in the marketplace but generic ASP giants like athenahealth have made inroads into radiology nevertheless. As Kroken points out in her article, the needs of radiology billing are unique. IMAGINEradiology’s foray into the ASP market through Dexios should render the generic ASP billing offering obsolete to the savvy shopper.

Hybrid Approach
Some ASP companies offer a hybrid approach. My own company, Dexios, offers IMAGINEradiology in an ASP offering but we also offer full-service radiology billing and everything in between. For example, if a client runs their own imaging center and wants to do scheduling via our ASP on Imagine’s RIS product but for us to do the billing, we can do that. If someone wants to have a local employee answer the phone and access the billing system but for us to do the follow-up, we can do that. The flexibility in an ASP offering can make the perfect solution for a group with unique needs. One of my favorite sayings is “if all you have is a hammer, everything looks like a nail.” The hybrid ASP approach gives the radiology practice a wide array of tools and options so that a custom solution can be created to meet the need of the practice, not the vendor.

The Future of ASP
As I take out my crystal ball, I think that ASP billing solutions will continue to grow in years to come. Either the small radiology groups are going to have to adapt some new practices in order to compete or, as some predict, they will simply go away. It used to be that the high cost of communications and the vagaries of telecom were barriers to trying a solution like this. However, in this day and age of cheap high speed communications and high uptimes, anyone can plug into a datacenter anywhere in the US and expect to get access to highly specialized software for a fraction of what it would cost to run your own shop. Time will tell.