The Great Debate: To License or Host

You've long recognized the necessity of automating your entire organization on a comprehensive electronic medical record and integrated billing solution. And the board finally agreed with you.
As you begin the selection process, the cacophony of debate surrounding licensed systems vs. hosted is overwhelming and confusing. Too many acronyms and confusing terms. Too many strong, but opposing, opinions. Who is right? In most cases, only you can decide. There are advantages and disadvantages to either strategy. Over the next few issues of Connecting the Dots, we will consider both deployment options.

Let's begin by clarifying the terms. A hosted system, software-as-a-service, software-enabled service and cloud computing are - at a basic level - the same thing. Yes, there are subtle differences. But it might be easier to split hairs than to clearly define some of them. At the core, each of these terms refers to a software solution where you have constant and unlimited access to a software application using the Internet. The hardware is under the control of the software vendor and is the vendor's resp0nsibility to secure and maintain it, while providing disaster recovery services.

Traditionally, most software was sold using the licensed model. Using this model, you purchase the number of licenses needed upfront, with on-going monthly maintenance fees that generally are a percentage of the purchase price. The maintenance fees ensure ongoing support and upgrades. You purchase and control the hardware - it is located at your site, where you maintain and secure it as well as provide disaster recovery services.

There are three key areas of differentiation between hosted and licensed systems: financial, IT infrastructure and data control. In this issue, we'll consider the financial aspects of each deployment model.

Financial Differences

The financial differentiator lies in the contract structure. With a licensed system, the agency is required to pay a licensing fee to the vendor, along with a monthly maintenance fee for ongoing support and upgrades. The agency also purchases all of the necessary hardware. This incurs a rather substantial upfront, capital expense but lower ongoing expenses.
A hosted system does not incur the upfront capital fees, monthly maintenance or the cost of purchasing hardware. The vendor purchases the hardware. Instead, the agency pays a standard monthly subscription fee which is substantially higher than the monthly maintenance fees of a licensed system. The subscription is due each month for as long as you use the software.
In general, while the upfront costs are much lower, a hosted system will cost more over time than a licensed system. But from an accounting standpoint, the monthly expense associated with a hosted system is an operating expense instead of the capital expense associated with licensed systems.
Obviously, the "right" answer depends on your particular circumstances.
In the next issue, we'll explore the IT infrastructure differences and the advantages of both licensed and hosted systems.

The Right Choice

Regardless of whether a hosted or licensed system is best for your organization, Thornberry has a solution. By offering both licensed and hosted systems, Thornberry enables the flexibility you need to select market-leading home care and hospice software that is right for you.
To learn more call 717.283.0980 or email .

Missed a Webinar?

The "Prospering in the Perfect Storm" Webinar series has provided helpful information to hundreds of home health and hospice professionals. But realizing that your days are filled and overflowing, you may not have been able to attend a Webinar that was of interest. Good news! Thornberry has recorded and posted each Webinar to its Web site. The Webinars are available to view, free of charge, at www.thornberryltd.com/pastwebinars. Our goal is that the Webinars are informative and helpful to you.