YOUR EDITOR AND I HAVE BEEN ATTEMPTING to make sense of the “Internet Revolution” in recent months. The ability of the Internet to make vast amounts of information available to anyone on demand, no matter where they are in the world, will definitely transform the clinical laboratory industry. After all, the fundamental product of any lab is the test data and information it produces.
But there is another aspect of the Internet which we are just beginning to comprehend. That aspect relates to the cost of LIS and other software used in the laboratory. Most of you are learning to distinguish between the fat client and the thin client–application service provider (ASP) business model for software. The fat model is what we know today. You buy the software from the vendor. You buy the computer hardware needed to run the software. Then you maintain software and hardware on your site. The thin client is just the opposite. The ASP provider creates the software. It is placed on a host, somewhere remote from the lab or hospital. The ASP vendor maintains the software and the hardware. The customer pays some ongoing fee to access and use the ASP software. All that is needed to access the remote host is a Web browser and a password for authorized users.
Most lab executives and pathologists know how expensive it is to acquire and maintain fat client software, such as the LIS and pathology software that runs most labs today. But few of us realize that, not only will thin client–ASP software services be simpler and easier to use, but the cost of thin client lab applications may fall to pennies. In one sense, this is what the Internet is doing to long distance telephone charges. During the past ten years, residential per-minute long distance fees have dropped from 25¢ per minute to 5¢ per minute and some experts think it will fall to nearly zero!
THE DARK REPORT see that the same process already occurring in Web-based lab test ordering and results reporting. In the second half of last year, Healtheon/WebMD was signing contracts with major labs for prices estimated to be about 50¢ to 75¢ per patient (for lab order and result). Earlier this year we reported how one lab, using Abaton.com’s product, estimated its costs would be under 40¢ per patient. Now, as new companies enter the market, prices are falling further. Because a remote host–ASP vendor incurs virtually no added costs to hook up additional users, I think free market competition will drive the cost of ASP lab information software down to a fraction of what it costs today to maintain fat client systems!