The unseen costs revealed

The first question most doctors ask when searching for new practice management software is, "How much does it cost?"

Dec 1st, 2011

Dr. Lorne Lavine

For more on this topic, go to www.dentaleconomics.com and search using the following key words: View from the Cloud, unseen costs, web-based software, Dr. Lorne Lavine.

The first question most doctors ask when searching for new practice management software is, "How much does it cost?" Many times the price quote does not paint the whole picture. Most of the cost of switching to new software is below the waterline and out of sight. If you're in the market for new dental software and are trying to compare costs of traditional client-server software with the new trend for web-based software, be sure you take into consideration all of the costs associated with client-server software.

The Gartner Group, a nationally respected research group, found that across all industries, for most client-server installations, the software price represented less than 10% of the total cost of the system. These are not dental specific numbers, but anything remotely close to these numbers warrants attention:

  • Software license fees: 9%. For dental, this number is usually higher, and keep in mind that you never own the software; you just retain the right to use it.
  • Implementation fees: 43%. This would include data conversion and other software purchases such as Microsoft Office.
  • Hardware: 26%. This number is likely higher in dentistry, as the constant upgrading of software usually requires an equally constant upgrade in the hardware as well.
  • IT services: 14%. This is an ongoing cost for many of my clients, as they constantly need new software to be installed, new hardware to be configured, and new servers to be configured.
  • Maintenance: 7%. Most dental practices spend more than this as it includes the monthly fees that most software companies charge, along with the standard monthly fees from IT companies.
  • Training: 1%. Again, this is likely low for dental offices, as updates to practice management software require at least a half day of training to learn the new features.

It's important to realize that this study does not include things like e-claims, electronic statements, and patient communications — things in which most modern dental practices are investing.

So, if you plan to start looking at web-based practice management software instead of the typical client-server configuration, don't forget to compare apples to apples. Web-based dental software is purchased as a service, and there is no large software licensing fee that you find with client-server software. To make a comparison:

① Calculate all costs incurred with client-server software over three years (IT costs, hardware, services, etc.)
② Divide this number by 36
③ Compare this number with your quote from a web-based system

What if you do the numbers and the web-based system is more expensive? As always, cost shouldn't be the overriding factor in all cases. Consider the benefits inherent to the web, such as not worrying about upgrades, patient data is always available from anywhere, no hassle with backups and storage, and expensive servers and hardware are not required.

Also, it does not require a large up-front investment, there's a small monthly subscription, you do not have to upgrade hardware to keep up with the software, and finally, there is better HIPAA compliance. Ask yourself if you are willing to pay a little more to enjoy these benefits.

The real question is, "Are you investing in old technology?" Client-server software has been around for a very long time. Any software company developing a new application today is designing it for the web because the benefits to the company and client are clear.

Dr. Howard Farran said, "If there are any practice-management software companies out there that want to ensure they're still competing in the next five to 10 years, they need to focus on moving to the cloud. In fact, if their No. 1 priority is not getting their next platform out on the cloud, they might be in trouble."

If you decide to invest in traditional client-server software, then you need to understand that you may have to turn around in several years and make another investment to "upgrade" from that company's client-server version to their web-based version.

In conclusion, be sure you consider all of the costs you will incur over a three-year period before you begin to compare the price of traditional client-server software with web-based dental software.

Lorne Lavine, DMD, practiced periodontics and implant dentistry for more than 10 years. He is an A+ certified computer technician, as well as Network+ certified. He is the president of Dental Technology Consultants, a company that assists dentists in all phases of technology integration in the dental practice. He can be reached at drlavine@thedigitaldentist.com or by phone at (866) 204-3398. Visit his website at www.thedigitaldentist.com.

More DE Articles
Past DE Issues
More in Practice
Practice
Social media for start-ups