Other critical functions include the hosting of a myriad of add-ons and plugins that connect to, and extract from, the practice management software.
As a secondary function, the practice server often operates as a file server to store business documents, or often as a file repository for incoming faxes. It can also have accounting software installed or be used as an email service for programs such as Microsoft Exchange.
There is no doubt that the practice server is a critical piece of infrastructure and central to the successful operations of a clinic.
So how much does it cost to own and operate a practice server that is so critical to your business? Is there a way to reduce the operating costs? Are there alternative solutions that not only cost less, but also reduce the risk of having to maintain a practice server?
These are fundamental questions that all practice owners should be asking themselves, most especially when setting up a new practice or when an operating practice is nearing the end of its depreciation life cycle on existing server equipment (that is, it’s getting old and your practice will soon get a declining return on maintaining the old equipment).
WHY SHOULD I CARE?
If you’re not an owner GP or a practice manager, should you keep reading here? Do you really care?
The technology is changing very fast, and if your owners or your practice manager is considering updating their IT in the near future there are enormous potential advantages to moving away from fixed in-house servers to a cloud-based system. But it all starts with money. And if you are interested in better-connected practice technology, which cloud systems inevitably bring, then you can engage your peers and practice managers by starting with discussion about cost.
Not many GPs know the total cost of purchasing, operating and maintaining a practice server exclusive of all other peripherals such as printers, routers and user computers located at reception desks or doctors’ rooms.
If you do, you can more accurately calculate the cost of ownership and make a valid comparison between on-premise and desktop bound computer installations versus a cloud-based service.
The issue has been that when comparing a cloud service to a desk top service, many practice owners will look simply at the comparative cost of subscriptions to the service. In this respect, the two aren’t that dissimilar, so as an ongoing operational cost, the advantages of putting a cloud system in generally then falls to the increased utility of better connectivity to services such as patient portals, allied health, to much better security, and, to the ability to make your GPs far more mobile.
All these advantages tend to still be somewhat in the future for many GPs. Desktop systems, driven by a local server environment are a known beast, and though locally served, they can still be quite flexible in terms of patient portals, apps, and even connectivity.
But if you look at the cost of the two systems, and compare them like-for-like over the life your equipment, the picture changes dramatically.
Table 1 on the next page summarises the estimated costs of buying, owning and operating a practice server for a GP clinic with five doctors and four administration staff applying best practice processes to ensure the business runs without disruption.
Capital costs for year 1 exceed $30,000. In combination with initial software licensing (including practice management software and MS Office 365), electricity costs and consulting fees to both setup and manage your infrastructure, takes the total year one expenditure to $62,724.
Ongoing annual costs are estimated at $39,474 per year. Over a five-year period, the total cost of ownership is estimated to be $220,620.
CLOUD SERVICE COSTS
Calculating the total cost of ownership for cloud services is easy. There is no need for a dedicated practice server to host the clinical and practice management software, and the only requirement is to include licensing and initial software configuration costs.
Of course, as previously stated, the practice server is often used for other purposes, the most common being a file server for the practice, where documents are saved. To compare like-for-like, subscriptions to MS Office 365 for all staff are also included. MS Office 365 is a cloud-offered service providing access to MS Word, Excel, Email and most importantly OneDrive. OneDrive is a dedicated cloud-based file service hosted in Australia when linked to an Australian entity. This guarantees that any clinical documents are saved on OneDrive securely and in Australia. Practices can use OneDrive to file and backup business documents and faxes.
Table 2 on the next page summarises the estimated costs of cloud services.
Including setup fees, data migration and licensing of both your cloud provider and MS Office 365 the total year one estimated cost is $13,106. Ongoing annual costs are estimated as $8856.
Lots more here including much more on comparative costs:
Posted by Jeremy Knibbs
When I first became CEO of a big publishing company, I used to take pride in hanging on to our IT infrastructure for far longer than we depreciated that equipment in our accounts.
I thought at the time: “They’re computers right … what’s the use in updating just to get ones with new chips and smarter screens?” It was a rookie management error. Saving pennies in capital costs, but throwing away pounds in productivity, and in our potential for innovation.
By the time I left this big company to start a small one of my own, I was a technology convert. Not a nut. Just a convert. You have to be careful. You can’t go blindly at it. But if you do your homework, understand what you need and make sensible investment, the pay-off is generally very good.
In this new company, which we started just a few years ago, we had decided that cloud-based technologies were mature enough for us to attempt to put as many of our business systems on the cloud as we could.
We sat down and did our homework and we were surprised.
Xero could do all our accounting. We could hook Xero to a publishing management system to do all our advertising booking, sales team management, and production and client services, our events could be ticketed and planned all on Eventbrite, our awards could be done on Ewards, our subscriptions handled through Moonclerk with credit card payments handled via Stripe, and we could back up everything we did easily on Dropbox.
That meant that our staff, and us as managers, could work anywhere, and at anytime could access any system, to look at any report, up to date and live, and work from anywhere.
Journalists could be anywhere, our accounting could be done at any time by anyone we authorised, our banking and payroll was all seamless.
We did all this in a surprisingly short amount of time. I still remember being shocked at how quickly and easily we established these systems and how they all just seemed to hook together, somewhere up there in the cloud.
We had that new business up and running, with two publications we had acquired from our old company, complete with all our sales and customer data, within a couple of weeks.
The savings in our first year, just from going to these new systems, and doing a couple of other clever things, like not installing a phone system and using our own mobiles, was above $400,000. That delightful surprise was enough for us as a group to do something that would change our lives, launch The Medical Republic. We did have other backing, but this got us over the line on quite a big decision. One very important aspect of the change was that most of these savings were ongoing.
My conversion to cloud technology was also apparent in my earlier decision to be a first round investor – albeit a small one – in the cloud-based patient management start up MediRecords.