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Physician Practices: Are Application Service Providers Right for You?

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Publication Date: October 2006

Publisher(s): California HealthCare Foundation

Author(s): Jason Fortin; Keith MacDonald

Topic: Health (Health services administration)

Type: Report


While the benefits of advanced clinical software such as electronic health records (EHRs) are well-documented, the up-front costs and resources needed to implement and support these systems can be prohibitive for some physician practices. A possible alternative is the application service provider (ASP) model, which allows physicians to essentially "rent" remotely managed products and services that can be accessed via the Internet. This report provides an overview of the ASP alternative, comparing it to traditional software and addressing important considerations and questions for physicians weighing their options. It also considers the future of ASPs and reviews scenarios from six different types of medical practices as a guide for making appropriate IT decisions. The authors conclude that with the emergence of reliable broadband technology, the ASP model is an increasingly viable choice for many small to medium-size practices. Particularly for those with limited capital and IT resources, it may offer the only practical strategy for migrating to EHRs. However, the report notes that medical practices must be cautious when charting a software strategy. Among key considerations are IT goals, available expertise, financial resources, and willingness to outsource data management. According to the authors, options will likely increase as the ASP market matures. More EHRs will soon be available on an ASP basis, and more organizations will begin serving as ASPs.