Moving Beyond an Agency's Four Walls

June 30, 2008
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Application service provider solutions are an alternative to client/server arrangements

As the complexity and expense of supporting application software have increased, more and more behavioral healthcare provider organizations have turned to Web-based or application service provider (ASP) solutions. Although a relatively new concept in the behavioral healthcare market, ASP, on-demand, or software as a service (SaaS) solutions have existed in one form or another for more than a decade. Unlike packaged software or traditional client/server systems, Web-based solutions are hosted on remote servers and managed by the ASP, and users access the applications via a secure Internet connection (for example, think of PayPal or TurboTax Online).

New York State's Office of Alcoholism and Substance Abuse Services (OASAS) turned to an ASP solution several years ago when it began looking for an automated, HIPAA-compliant system to handle its admissions, billing, and clinical operations. The state agency, which operates 13 addiction treatment centers, did not have the resources to support an on-premises solution.

“We were looking at deploying 13 servers in 13 different locations, or having a single server in our central office,” says Tom Stark, project manager at OASAS. “We could not afford to support that kind of infrastructure. Using a hosted model, we avoided having to install backup generators and the other support systems we would have needed.”

Market research firm Global Industry Analysts, Inc., estimates that the worldwide ASP hosting services market should reach $69.8 billion by 2015, with the United States leading the market. Yet for the healthcare industry in general, and behavioral healthcare in particular, ASP adoption is still relatively marginal.

“This is really an emerging business model,” says Dale Jarvis, managing consultant at MCPP Healthcare Consulting, which monitors the behavioral healthcare market.

Interest is growing, however, as more vendors offer ASP solutions and the comfort level with ASPs' security, HIPAA compliance, and privacy practices has increased. The growing demand for electronic health information has strained IT resources at many behavioral healthcare agencies, making ASPs more appealing.

“In the past, people were concerned about having their data reside outside of the four walls of the organization,” says Kevin Scalia, chair of the Software and Technology Vendors' Association (SATVA) and executive vice-president for corporate development at Netsmart Technologies, which offers hosted solutions for behavioral healthcare. “Now we're seeing more and more proposals going out looking for quotes on an ASP basis.”

Cost and Resource Savings

The ASP model's benefits are primarily cost and manpower driven. With an ASP, organizations with limited IT resources can avoid the cost of maintaining dedicated application servers at their own facilities, along with cooling systems, backup power generators, and IT staff to support them. Application maintenance is simplified, and all users can access the latest version of the software simultaneously.

“Every time you log on, you get the latest version of the software,” notes Wayne Easterwood, vice-president of information systems at the Centerstone Research Institute, a branch of the large behavioral healthcare provider organization in Indiana and Tennessee. “With a two- or three-tier client/server system, you can't guarantee that.” Centerstone uses Qualifacts Systems' CareLogic product.

An ASP model can simplify software integration issues, improve the reliability and availability of the application, and make IT costs far more predictable, as ASP application fees typically are assessed annually based on the number of users. Hosted solutions provide staff with 24-hour access to the application from any location, allowing clinicians to log in from the field.

It's also much easier to switch ASPs, since there isn't any on-premises software to uninstall. That flexibility was essential for the Washington State Consortium (WSC), a group of six regional support networks (RSNs) that represents 31 behavioral healthcare agencies in 12 counties. The WSC had been using a hosted application from PCI Software for several years when the vendor announced it would stop supporting the product.

Faced with converting ten years' worth of data in a short time, the group issued a nationwide RFP for agency software that included practice management, support for an electronic health record (EHR), managed care capabilities, and electronic data interchange among the agencies, RSNs, and the Washington State Mental Health Division. They chose Netsmart's Avatar suite of hosted solutions, and PCI helped them make the transition.

“As software has become more sophisticated, there's no way that the people at these agencies will have the expertise to manage the databases and the networks,” says Jerry Dolezal, MIS manager for the Clark County Department of Community Services, and the WSC's former project lead. “It's cost-prohibitive. As we moved forward, we decided an ASP model was going to become more important to us.”

Taking the Plunge

Jarvis cites a number of variables an organization should consider when deciding whether to use an ASP:

  • Agency's size

  • Availability of IT staff

  • Number of sites the agency operates

  • Whether the agency is using an EHR

  • The quality of the agency's Internet service

Agencies with multiple sites that would require complex networking, those with relatively limited IT resources, and those with access to reliable Internet service are good candidates for hosted solutions.

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