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November 08, 2004

ROI and Linux

Real world case study: Linux thin client savings exceed 37% in just 8 months

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When an Albany-based cardiology practice announced their move to Linux last year, headlines touted the move as an affirmation of the use of open source software. Having a large medical practice with locations in Massachusetts and New York entrust medical records to Linux was a resounding nod to the cost savings and security that has become increasingly associated with the Linux platform.

But the real story -- the one that is even more important to end users and IT managers -- is the ROI (return on investment) that CCA has realized in their move from proprietary Windows to open source Linux.

Dr. Martin Echt and Jordan Rosen reveal the details of CCA's Linux implementation in the full presentation, from their talk at April's Real World Linux trade show held in Canada.

Among their key findings, summarized in the article below, Echt and Rosen found that CCA's Linux thin client savings exceeded 37% in just 8 months. They provide a detailed cost analysis of their migration to Linux . . .


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Linux thin client conversion in a large cardiology practice: initial experience

Martin P. Echt, M.D., PhD, CEO, Capital Cardiology Associates
and
Jordan Rosen, President, Lille Corp

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Description of the Medical Practice

Capital Cardiology Associates (CCA), is a single specialty cardiology practice with offices located in both New York (Albany, Troy, Oneonta, and Latham) and Massachusetts (Pittsfield). In 2003 CCA converted there IT system from a Microsoft based network to a Linux network employing Linux thin client technology.

CCA consists of over 40 physicians, surgeons & providers, practicing in 7 offices and 7 hospitals in New York and Mass., employing approx. 200 employees. In 2003 activity stats were: 128,000 patient visits (office & hospitals), 92,000 diagnostic tests, 6,000 catheterizations & interventions, 800 open heart surgeries, over 380,000 billed services with yearly revenue over $22 million.

CCA is “highly wired” with extensive MIS dependency. Applications include eScribe, an Oracle driven Internet based electronic patient record (www.escribeonline.com), billing and patient data collection (Medical Manager, AIX based), pacemaker monitoring application (PACEART), cardiac catheterization and procedure imaging applications, patient services tracking (via spreadsheets), financial and business applications (MAS 90, FRx), analytical software (Touchpoint), payroll and employee time monitoring (Kronos, ADP), word processing and general spreadsheets, physician & employee shared time schedules, shared Intranet based daily hospital rounds and procedure activity lists, hospital patient data access (via Citrix), e-Mail, calendaring, address books.

Business Situation in 2003

Rapid network expansion due to rapid (>15%) yearly growth over the previous 7 years necessitated extensive upgrading of the entire network, which was installed in 1997 and was a mixed environment of Windows 95, 98, and 2000. Upgrading everybody to Windows 2000 or going with a Linux solution were the options. We operate out of 7 different offices and an additional 7 different hospitals so we are heavily dependent on fast and simple access to our office systems from all locations. Having an enterprise wide stable environment that could be centrally managed to eliminate expensive remote desktop support was one of the major business goals in this transition.

We analyzed the core IT network features really needed for optimal business conduct and agreed on the following:
Easy and fast inter-networking via broadband Internet where available

Shared file access environment

Low incremental cost of network expansion

Need for minimized remote on-site IT support

Complete integration of key business apps (billing, business records, EMR, diagnostic tests)

Low virus/worm susceptibility

Ability to restrict or eliminate user options and preferences to increase employee productivity

h) Long term control and predictability of costs

Based on previous experiences with Windows 95/98 desktops, user abuse of non-business functions (e.g. solitaire, music files, Internet, etc.) constituted a significant loss of employee productivity. Estimating that if the average employee spends 15 minutes per day “playing with the computer” he/she would waste greater than 50 hours per year. At $15.00 per hour that translates into $750.00 per employee each year. For 200 employees the productivity loss could amount to $150,000.00 per year. Thus, we considered the ability to prevent those abuses an important network function. We believe that the structure of the standard Windows desktop actually entices employees to use and abuse non-business applications. Linux would much better control this cost.

What applications do employees really need?

Most employees (patient check-in, patient check-out, billing, nursing and tech support) need only a very few core functions:
MIS appointment and charge/payment posting

Email

Internet access (including our EMR)

Basic word processing and spreadsheet functions

More complex business applications are used only by relatively few employees (accounting, payroll, analytical software).

The use of specialty diagnostic software (pacemaker checks etc.) is limited to a few technical employees.

We compared a Linux thick and thin client conversion to a Windows upgrade, analysis how each option would affect our core IT network features.

Microsoft's main strengths are the abundant availability of qualified vendor and technical support. Its main weaknesses include frequent crashes, high service costs due to frequent desktop problems, high virus/worm susceptibility and software costs.

Linux thick client main strength is the stability of the Linux operating system and its low susceptibility towards virus damage. In addition, licensing costs are low to absent. The presence of a thick client desktop however still demands onsite desktop IT support as application software & programs still reside on the local hard drive.

Linux thin client features all the advantages of the Linux thick client plus the virtual absence of onsite desktop IT support. The thin client consists of a diskless (“dumb”) computer that boots directly from a central server. All file and program access is off of central servers. The only remaining desktop hardware option is the power switch. Thus, there is virtually no desktop breakdown potential and on site desktop IT service needs are minimal. There is no end user abuse potential.

A cost comparison of the Linux desktop - thick vs. thin


Costs per added workstation (hardware, licenses, installation support)

Thin client reduces costs: cheaper hardware and labor costs, no software costs


Remote locations

Thin client greatly reduces remote onsite labor costs


Coordination of service and installations

Thin client reduces installation costs. Desktops are configured centrally and simply plugged into the remote network. No significant onsite labor costs.


User abuses

Thin client reduces “user powers” thus increasing employee productivity.
conclusion)

Cost comparison: Windows vs. Linux

Servers

Hardware requirements for the central server, routers, switches etc. are essentially the same with Linux as with MS Windows. Due to previous hardware obsolescence we had to do extensive upgrading of servers and routers.

Estimated costs for new hardware were $86,500.00 or $433.00 per desktop.

Labor and supply costs for cabling, network programming, initialization, migration and training were $107,500.00 or $538.00 per desktop. Total costs for servers and routers etc plus complete installation was $194,000.00 or $970.00 per desktop.

Our projections did estimate Windows to be 5-10% less expensive depending on old hardware reuse.


Desktops

Incremental costs for each new or replaced desktop are listed below. Thin client Linux is significantly cheaper at $800.00 per desktop vs. Windows at $1,600.00. This difference is mainly due to cheaper hardware and shorter installation time. The estimated hardware life of the thin client appliance is at least 5 years, possibly up to 10.

Incremental Cost Details: Desktops

Desktop costs per year of operation including periodic software upgrades, onsite labor costs, and depreciation are far lower with Linux thin client at $233.00 vs. MS Windows at $830.00.

This steep difference is due to both much lower depreciation costs spread over more years as well as only minimal onsite labor costs.

Linux installation and lessons learned

The switch over was done over a weekend and relatively painless for most employees. Linux worked as designed and all billing, appointment and clerical software worked flawlessly.

Proprietary software (accounting, human resources) initially did not adapt well due to lack of vendor support. Thus, subsequently we bypassed the issue by keeping these functions segregated on a dedicated Windows boxes. Efforts are currently under way to remedy this problem with Windows emulation software such as Win4Lin by NetTraverse.

Other shortcomings include limitations of the Internet browser Mozilla. Some web sites cannot be successfully accessed unless Windows Internet Explorer is used. We used emulation software and successfully bypassed this issue.

OpenOffice.org with word processing and spreadsheet programs works very well in our network environment and for most users there is no significant difference between OpenOffice and MS Office. However, if files need to be sent out by email, they must be saved in the Microsoft format so that the intended recipient can open them (unless of course if he/she also uses OpenOffice).

Employee Training

One area of concern was adequate communication and training of employees.

The three most important steps in the conversion to Linux are communication, communication, and communication. The transition was anxiety provoking for many employees. Some minor changes such as a different logon prompt, different icons and screen layout were cause for concern. Printing issues were another area of concern. Linux thin client uses a central configuration for all printers, thus the local desktop control typical for Windows is lost. A default printer is set up for each user as well as a menu to allow for printing to other printers (even at other locations).

The ideal transition to Linux would have included advance-training sessions on the new desktop as well as OpenOffice training. In this area we fell short and would have benefited from a more formal training and transition schedule.

However, due to the nature of work for most staff, the amount of training is very limited. The application programs on Linux are identical to Windows; there are no training issues. OpenOffice is not a Linux product. It is an open source application providing functionalities very similar to Office 2000. Its main advantage is its price. It’s free to download or available at minimal costs from Red Hat or other vendors, including a download option from the Internet. It does require a few hours per user to become adequately familiar. This was accomplished within 2-3 weeks for most staff. For a larger organization, the software savings from not using Office 2000 are substantial and recurring.

In hindsight: was it worth it?

Absolutely!

Network stability has been phenomenal, no downtime in over 8 months. Our system is configured with extensive system monitors to constantly monitor all vital signs and sound alarms (including direct cell phone calls) when alarm parameters are reached. Thus, processes, which could potentially lead to system crashes, are monitored and remedied by the IT staff before they become systemic.

Desktop maintenance has been outstanding. We had not a single desktop breakdown. We are in the process of slowly replacing the older larger computers with new commercially available thin client appliances that fit in your palm. These units will likely last for a very long time and are completely maintenance free.

We are about 8 months into the LINUX Thin Client. We had estimated the yearly operating costs to be 37% less with Linux thin client. These saving appear to materialize nicely and we will likely exceed them in the future.


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About the authors

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Dr. Martin Echt MD, PhD: is a cardiologist and CEO of Capital Cardiology Assocatiates based in the Albany, New York area. The 36 physician-group powers their thin client network on the Linux operating system.

Dr. Echt attended medical school at Free University in Berlin, Germany where he graduated Magna cum Laude in 1969. He completed his PhD in Cardiovascular Physiology in 1970. He then completed his Medical Residency at Mt. Sinai Hospital in Hartford, CT and his Cardiology Fellowship at State University of New York in Buffalo, NY in 1980.

Dr. Echt is Board Certified in Internal Medicine and Cardiology. He is a Fellow of the American College of Cardiology and a Member of the American College of Physicians. He is on staff at Samaritan Hospital and St. Mary's Hospital in Troy, NY. Dr. Echt is Chief Operating Officer of Capital Cardiology Associates, PC. He is Clinical Director of Cardiology for Samaritan Hospital and Director of the Board for Northeast Health in Troy.

Jorden Rosen: As the founder and CEO of Lille Corp, has spent much of his professional career analyzing corporate office workflow and streamlining office technology procedures. His interest and expertise in this area led him to develop a major document imaging product, which he introduced in 1992.

In 1998, he formed Lille Corp to apply this knowledge for the benefit of businesses in many other industries, creating custom information technology solutions for their small and mid-size offices. His first project focused on productivity enhancement in the health care sector, specifically in the area of medical records. Mr. Rosen saw that most medical offices underutilized their existing office technology, or had limited technology resources because it was beyond their budget.

Lille Corp. has gained national recognition for their Linux thin client expertise and the company is working with some of the key companies promoting networked computing on Linux. Jordan Rosen is an advocate for Linux and was recently named as a Linux luminary at LinuxWorld Magazine.


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Presentation from Real World Linux trade show

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Read the full presentation given by Dr. Martin Echt and Jordan Rosen at April's Real World Linux trade show held in Canada, in which they reveal the details of CCA's Linux implementation.

Posted by editor at November 8, 2004 09:17 PM

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