ASP versus Self-Hosting

I see in the June DMH CPTT meeting notes that the following statement was captured: "Application Service Provider (ASP) will cost less which is a major advantage; however there will be no direct access to data and customizations may be limited."

Not always so! After extensive pricing analysis across many EHRS vendors in the California Behavioral Healthcare market, I have found that ... "it depends".

First, let me do a brief and basic summary of what an ASP solution is. (I cover this at length with my clients to make the best decisions for their agency, as it is really an agency specific decision).

An ASP is basically a vendor that provides hosting, and system/database administration services for you. They buy the server hardware that your EHRS application will be installed on and they provide the hosting facilities (a climate controlled, monitored, and secure facility). They also provide the skilled staff to monitor the hardware and maintain the software and acquire/maintain the necessary operating system and database licensing.

For example, your ASP keeps the operating system and other server software updated with patch levels, and security, and they do the database maintenance tasks to keep the EHRS application running smoothly for you. They also sometimes do the user administration for you, adding and removing user logins and passwords (although I recommend you do this yourself). They do the system and application back-ups and have disaster recovery procedures in place.

The costs involved here are equipment/server costs (with every 3-4 year upgrades), licensing costs (for infrastructure software, not the EHRS licenses), and skilled labor. The ASP takes on these costs for you, but they definitely include those costs in your monthly/annual fees. The cost break is dependent on the size and scale of the ASP. If they are large enough, efficient enough, and have enough customers, you will see a cost discount over doing it yourself.

As you can imagine, each vendor has their own pricing strategy and core competencies. If they prefer acting as an ASP, they will price appropriately to drive you to that solution. On the other hand, if they sell primarily self-hosted solutions, their ASP pricing may be higher. With Behavioral Healthcare EHRS', I find that the pricing is all over the map. You must price out each solution with the self-hosted cost and the ASP costs side by side, to determine which is most cost effective. You should include in your analysis, your staffing, facilities, and equipment costs for self-hosting.

Also, important to note on the cost side is your current IT infrastructure. If you already host a number of servers and applications and have adequate skilled staff (including database skills), then the hardware and staff may not be significantly incremental for you and self-hosting will be best.

Most EHRS vendors do not "host" themselves, they do the database and application administration, but outsource the equipment and system administration to a hosting house or co-location facility. Similar to the banking industry.

Remember, with an ASP solution you are entering your client data into a system that is not located at your agency, just like the LACDMH IS. So, you must consider seriously the capabilities and quality of the ASP as well as the configuration of the equipment, network, and Internet access.

Some things to consider when considering an ASP are:

• How, in what format, and how frequently will you have access to your data?
• What is the reporting capability?
• Who is the hosting provider? Who is the application administrator? Who provides support?
• What is the experience and reputation of the ASP/Hosting provider?
• What is the configuration/specification of the servers and network? Will you have a dedicated server or will you be sharing?
• Will you have enough bandwidth for a good user experience?
• What kinds of performance will they guarantee? Can you bring the application in-house down the road? How will that work?
• What kinds of reports will they provide for performance? E.g. downtime, outages, problem logs, etc.
• Can you tolerate the uncontrollables? e.g. the Internet, application updates/version control.
• How much lead time do you get for user impacting upgrades, screen/workflow changes?

All that said, a quality Application Service Provider is a great solution for agencies that do not have the facilities and staffing/skills to host it themselves.

by Keely McGeehan, Sahara Management Solutions, Inc.