Pediatric Informatics: Computer Applications in Child Health (Health ...

16 Prioritizing Pediatric Investment for IT in Smaller Practices 227
and other inexpensive hardware. In this case, the practice owns the technology
outright, eliminating monthly installments and interest.
16.4.4.2 Traditional Financing
Larger purchases, such as servers, electronic health record applications, interfaces
to other systems and higher speed connectivity are often financed over time.
Advantages include reduction of large upfront expenses to affordable monthly payments,
minimization of the risk (due to obsolescence), preservation of capital and
other assets for other investments. The time of the loan period is critical. Although
most technology is relatively consistent for 2–5 year periods, the technology could
become obsolete before the end of the financing period. In the first decade of the
twenty-first century, financing costs are relatively low compared to the 1980s, with
no expected changes in the foreseeable future.
16.4.4.3 Leasing and Subscribing (Application Service Providers)
In some tax situations, leasing might more advantageous (Tax advisors should be
consulted to determine what is appropriate in each practice’s financial situation).
For some technologies (such as EHR systems), subscribing to an application service
provider (ASP) may be preferable. These options reduce the burden of system ownership
and allow earlier adoption than purchase or financing, however at a higher
long term costs.
Application Service Providers (ASPs) 12 provide on-demand computer services
(such as EHRs, electronic prescribing or journal resources) to customers over a
network (such as the Internet or other server-client model) as a subscription. ASPs
own, operate and maintain the hardware and software for an application and provide
access for a subscription fee. Practice advantages include no separate expense
for hardware, third party software, system management, or maintenance. Practice
disadvantages include the facts that over time total costs of operation are higher,
that ownership is never achieved, that remote availability requires secure broadband
connections.
16.4.4.4 Gifts or Grants
Some technologies may be “gifts” or trade-offs for participation in or adoption of
another program-wide change. An example of this is provision of hardware and
software by insurers for practices to support e-prescribing. Some state governments
have subsidized EHR system and offered lower costs or repayment options
as incentives (including tax savings) to increase adoption.
Grant options may be available from regional health information organizations
(RHIOs) or other programs (such as local registries) that might offer technology at