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Take a Critical Look at Application Service Providers in Health Care

Editorial Department

The emergence of the Internet and its enabling technologies offer small and medium sized health care organizations alternatives to large capital outlays for hardware and software, as well as information technology (IT) staff expenditures. Applications Service Providers (ASPs) rent specific software applications to companies, requiring no up-front fees or major hardware investments. ASPs provide free software upgrades and reduce the need for expensive, experienced IT staff. Because the ASP market is in its infancy, however, evaluating both vendors and the decision to use an ASP may be difficult, especially for such small-budget operations as community clinics.

The California HealthCare Foundation has just published the first two in a series of reports intended to help health care managers assess ASPs. An Executive Report, Are ASPs Ready for Prime Time?, provides information about how ASPs evolved, what they are and what they do, what the current market looks like and the questions a health care organization should ask when evaluating an ASP. A market segment report on community clinics, Are ASPs Right for Your Clinic?, provides information on current ASP vendors and applications, and helps clinic managers assess these current offerings. Future reports will address ASPs in Medicaid health plans and small hospitals.

"Our objective in making these analyses available is to improve decision making so that finite health care resources are spent in ways that best serve the public," said Sam Karp, Chief Information Officer at the Foundation. "Processing and maintaining accurate patient records and other health care information are essential to the practice of good medicine, so rental software that could reduce medical delays, errors and misuse is worth testing and developing. As health care organizations prepare to comply with new national data and privacy standards, ASPs will become an important alternative to consider."

Here more on ASP

The ASP Report series was prepared for the Foundation by the First Consulting Group. The first two reports are available for download at the Foundation's Web site at or by calling the Foundation's publications line at 510/587-3199.

Copyright © 2000 CITI Institute. All rights reserved.

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