Remember the old X-Ray room, with doctors standing before a light board peering at black and white images with frowns on their faces? This is still what happens in many hospitals around the world. It is sort of like reading your news on paper. It works well in the moment, but it is not the best way to share opinions or to look things up in the archives.
Medical device makers have done a lot of work over the last few years to improve the situation, first by introducing digital imaging systems that preserve and manage digital records, and more recently by moving the entire solution onto remotely hosted services that they manage for X-Ray users. These solutions are often referred to as being ‘in the cloud,’ because the location of the servers is not relevant to the user. it is off in the cloud somewhere. They are a type of Software as a Service (SaaS), so called because the functionality is provided as a subscription and the users do not need to pay large amounts upfront to purchase or license the software.
These radiology in the cloud style solutions have a number of special features that provide real benefits for users. One of the most interesting of these, and one that is much more likely to be found in SaaS solutions, is a “Metrics Package that Compares Your Hospital’s Performance with Similar Organizations.” Another feature that drives important benefits include “Records Kept Offsite on Secure Server” which supports the benefits “No Limits on Image Storage” and “Complies with New Image Storage Regulations.”
Benefits are good, but do they justify the cost of changing from existing systems? In mapping the benefits to actual value drivers we found three critical ways in which radiology in the cloud provided differentiated value when compared to analog systems (value is always defined for a specific customer relative to the next best competitive alternative). See Figure 2: Value Model for Radiology in the Cloud.
Six positive value drivers were identified for radiology in the cloud. For this specific customer the three most important were as follows:
- Reduction in Infrastructure Costs – a $750,000 benefit for this customer
- Reduced Insurance Costs – a $1,000,000 benefit for this customer
- Reduced Legal Damages & Fines – a $750,000 benefit for this customer
The reduction in insurance costs and legal damages and fines is traced back to “Complies with New Image Storage Regulations.” Of course the benchmarking against other similar organizations, a feature that is often provided with SaaS solutions, should also lead to improved performance and fewer law suits.
When using this value model with customers, the sales person would go in and select the most compelling value drivers for the specific customer and customize the data to generate a custom sales package for that customer. This data then flows back to the pricing and marketing organization so that they can get real-time market intelligence and improve their value models and communications packages.
Steven Forth
Former CEO
