How To Select An ASP Or Data Center And Negotiate A Contract For Hosting Services

This is the transcript of Robert Gleeman's discussion with Mike Uretz talking about ASP and Data Centers and how to negotiate a contract for Hosting Services. You can listen to this interview by clicking the youTube play button a few paragraphs below.

Robert Gleeman:  This is Robert Gleeman withEMR Update. I am talking today with Michael Uretz, Executive Director of theEHR Group. Michael's number is 425‑434‑7102. Thanks for being with us today, Michael. Good to have you here.

Mike Uretz:  Hi, Bob. I certainly appreciateit.

Robert: Our topic today is, "How to select an ASP or data center andnegotiate a contract for hosting services?" As you may know, this is oneof the most frequently discussed subjects on EMR Update, to get the server orto go ASP.

Michael, let me ask you: why get an ASP or hosted solution instead of justhosting myself if I am a small office doctor with a practice?

Mike: I think one of the big things I'm seeing as small to medium practicesmove towards adoption is because of the availability of ASP or data hostedsolutions in terms of why you might go with that instead of hosting yourself.

When you think about hosting an application yourself, there are a number ofthings you have to think about. One is just the resources it takes. When we gointo the world of EMR, now all of a sudden we are talking about 24/7. We aretalking about folks being able to get to their records from home at 11 atnight. The question you ask yourself is, can I as a group or practice have theresources available and the servers available to support that 24/7.

The second issue that folks really don't think about is when you think aboutleasing your own equipment, well on an average they say there is about a threeyear lifespan for equipment.

Robert: Right.

Mike: Probably in three years or so you will need newer equipment or updatedequipment whereas many times an ASP solution or a data center hosted solutionwill provide under contracts the ability to upgrade equipment automaticallyevery two to three years. You are kind of covered that way. It really dependson if you really want to devote your own resources or not.

Robert: What is the difference between an ASP and a data center hostedsolution?

Mike: An ASP solution or Application Service Provider solution typically meansthat what you are going to be doing is you are getting both the software andservers and services as well from one company. You will be paying a monthlycharge, almost like a rental fee, and what you will be getting out of that isyou will be getting the application, the EMR application. You will be gettingtypically training and implementation services from that company as well as allthe server equipment it takes to host it all.

The other option that folks look at is what's called a data center centric ordata center hosted solution. Typically, the model of that is that you actuallypurchase the products, the EMR software, as well as training and implementationservices. That comes directly from the EMR manufacturer.

Then, in turn, you look for a data center to host it up. In other words, whenyou look at a data center solution it is almost like as if you have your own ITdepartment only it's at a different location. Does that kind of make sense?

Robert: I see; that does make sense.

Mike: There are pros and cons of either approach. You have to look at yourparticular situation. For example, when you look at an ASP solution you have abenefit, for example, of your cost. Instead of having to shell out money forall these upfront licenses you typically get some kind of monthly cost. Inother words, you are renting the software out. Another potential benefit of anASP is that they are more of a local support presence. Typically, ASPs manytimes are regional in nature.

A lot of times they will give you value added services. Some of these folks,for example, might offer some kind of billing service in addition to the EMRthey offer. There are all kinds of services they can offer. The other benefitis that it is one point of support for everything.

On the other hand, what some folks choose to do when you go to the data centermodel is some people like to actually own their own licenses for whateverreason. Let's say you are planning on selling your practice a couple of yearsfrom now, and you want to transfer those licenses to somebody.

The other thing is with a data center model it's kind of a best‑of‑breedapproach because you have a true IT data center that is providing all of theservices to serve up the IT whereas you are working directly with the EMRvendor for anything having to do with their software. But, many times when youpay a monthly ASP charge that's rolled together when you look at your costsover time sometimes it can effectively be more of a cost for the actualsoftware than if you had just purchased the licenses in the first place.

Robert: Michael, how do you choose an ASP or data center?

Mike: Well, there are a lot of variables in this. A lot of the vendorsthemselves, a lot of EMR vendors, seem to have partners more and more in theASP and the data center realm. One of the things you can do if you choose anEMR system is you can go to that vendor and say, "Who have you used? Whois involved in your partnership program?" That's one way to, at least, geta short list.

The other thing you want to find out then is how many deals have theseparticular ASP or data center vendors done with the particular EMR system. Findout how many deals have they done. Also, find out do they specialize in acertain system; that's real important. Are they an ASP that actually has fiveEMRs that they resell, or do they sell one? Obviously, if they specialize inone they are going to be better at doing that.

The other thing then is you really have to look closely at the infrastructureand the resources these folks have. Talk to them. Find out how large their datacenters are. What types of equipment? How long have they been around? Find outhow many people? What kind of skill sets do they have? Do they have the typesof skills that they can run those servers?

Another thing to look at are the service options. What can they really do interms of services? Many times ASPs or data centers have all kinds of differentservices they can offer.

Then finally, Bob, really at the end of the day the most important thing is thereference checking because there has been many, many times that I have donereference checking on an ASP provider or a data center, and then people haveshared with me all kinds of stories.

For example, the things that happened when things went wrong; the extra thingsthat the person at the data center that stayed on the job until three in themorning to get something done. These stories are priceless. Make sure that youdo very, very robust reference checking because things will shake out throughthat.

Robert: This is going to be mission critical for a doctor. How do you make surethat either way that you go that they live up to their commitments?

Mike: You really want to make sure that you have a good type service contract thatcovers many of the areas because it's the same old thing. Can you walk the walkand talk the talk? What happens when you finally purchase it? In terms ofliving up to the commitments, you can certainly get a good contract. Of course,the other thing is in the selection process you can do a lot of due diligenceas well to see what the track record has been.

Robert: What are the components of a good contract, Michael? As a consultant,is this something you can help a doctor with?

Mike: Oh, sure. It's really interesting because I negotiate a lot of EMRpractice management contracts. One of the things I encourage people to thinkabout is that they look at, number one, the types of services they are gettingbecause in many cases it can be like when you buy a car. You buy the car, butthen you have everything around there. Do you get the satellite radio?Understand and define very distinctly what all the services are that they areclaiming and you expect.

Another component that is extremely important is what is the expectedperformance. You understand what the expectations are in terms of performance,and you get that down in writing.

The same thing with response time for problems. Make sure that that's allcovered. If there is a problem, how fast are they going to get to you? How fastare they going to take care of it?

Now, people can make commitments in a contract what they are going to do, butwhere's the teeth that makes them do it. Well, there needs to be financialpenalties if they don't come through with performance, and these penaltiestypically are credits towards your monthly charge.

You need to have the right to terminate the agreement based on certainconditions. Again, you negotiate this with your vendor. What I would mention inrelation to the termination is make sure that they will help you intransferring that data. Remember if they are doing an ASP or data center theyhave your data on their data center so you have to have certain rights withthat termination to get that data in a format that you can use.

Robert: Now, what if I decide to host the solution myself later on?

Mike: That's a very, very important question because typically what happens ispeople grow where you might have an ASP solution or you might have a datacenter solution for a couple of years. Maybe, you will actually have your ownserver at some point. Maybe, you might want to change. You need to make surethat there is documentation at all times of how they do things, what they aredoing. There are diagrams of how everything works.

If you ever get to the point where you are actually bringing all this in‑house,there needs to be that transference of knowledge. Make sure you always havegood documentation from your vendor, and if your vendor doesn't want to supplythat for you I wouldn't deal with that vendor.

Robert: Michael Uretz, Executive Director, EHR group. Thank you very much.Excellent information. Thanks again for being with us at emrupdate, Michael. 

For more information about the subjects discussed here you can contact Michael Uretz at the details listed below.
See our other Getting Started resources here.

Contact information for Mike: 

Michael Uretz, Executive Director
The EHR Group
700 NW Gilman Blvd. Suite E293
Issaquah, WA 98027
Tel: +1 (425) 434-7103

E-mail: sales@ehrgroup.com
Website: www.ehrgroup.com

Share this post: email it! | bookmark it! | digg it! | live it!