Project funding shortfall slows U.S. military’s plans for DIN-PACS

March 17, 1999

Initial installations to go online in mid-yearMany market watchers expected the U.S. military’s Digital Imaging Network-Picture Archiving and Communications Systems (DIN-PACS) project to be the single greatest monetary event to hit the PACS

Initial installations to go online in mid-year

Many market watchers expected the U.S. military’s Digital Imaging Network-Picture Archiving and Communications Systems (DIN-PACS) project to be the single greatest monetary event to hit the PACS market. But, although some substantial orders have been received under the project, a funding shortfall at the Department of Defense has limited purchase orders to a fraction of what the military was estimated to spend.

When the DIN-PACS awards were issued in November 1997, the military said that the project had a spending ceiling of $250 million in the first year, with one-year extensions adding up to a total of $1.25 billion over five years (SCAN 12/17/97). The dollar value of contracts issued in 1998 to the DIN-PACS teams, led by IBM and Agfa, was closer to $40 million, however.

The large number of hospitals operated by the military would seem to be fertile ground for new PACS installations as they convert to digital imaging, and the DOD eventually would like to switch all its healthcare facilities to digital. Due to limited funding, however, the DOD has targeted DIN-PACS deployments primarily for new medical facilities through the end of 1999, said Capt. Jerry Thomas, chief of radiological physics at the Uniformed Services University of the Health Sciences in Bethesda, MD. Thomas is the leader of the technical committee that developed the DIN-PACS request for proposal (RFP).

“For the next two years, there aren’t funds to deploy DIN-PACS extensively into our existing fixed facilities within the Air Force and the Navy,” he said. “The Army is doing limited DIN-PACS deployment in existing facilities.”

To be sure, the DIN-PACS project has not been without reward for the participating vendor teams. The IBM consortium landed the first DIN-PACS award with a $7.3 million PACS at Portsmouth Naval Medical Treatment Facility in Portsmouth, VA. Soon after, the IBM team received orders at 10 U.S. Army sites valued at about $25 million.

The IBM team also installed PACS technology at the Naval Clinic on Diego Garcia Naval Base in the Indian Ocean and U.S. Naval Hospital Roosevelt Roads in Puerto Rico. In addition, the team has installed equipment at several military facilities in Japan, including United States Naval Hospital Yokusuka, Medical Branch Clinic at Sasebo Navy Base, Medical Branch Clinic of Iwakuni, and Medical Branch Clinic of Atsugi.

The Agfa team has also begun to experience success in landing DIN-PACS purchase orders. The consortium landed its first DIN-PACS order in mid-1998, a $1.5 million contract from the Pentagon Clinic. Later in the year, Agfa won an award valued at $5 million from Walter Reed Army Medical Center in Washington, DC. Last month, Agfa landed a $7.8 million order from Womack Army Medical Center in Fort Bragg, NC (SCAN 3/3/99).

Although funding has not kept pace with the project’s original expectations, Thomas believes that DIN-PACS is on the verge of fruition as several sites are scheduled to go online in mid-1999.

“1999 will be very exciting,” Thomas said. “We will now be able to kick the tires on the DIN-PACS vision that we conceptualized three years ago.”

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