The hidden cost of maintaining a practice server

The hidden cost of maintaining a practice server.


Across our country thousands of practices, including GP’s, specialist and allied health, own and maintain a practice server. The practice server is the powerhouse of the clinic, the primary function of which, is to host the clinical and practice management software. Other critical functions include the hosting of a myriad of add-ons and plugins that connect to, and extract from, the practice management software.


As a secondary function, the practice server often operates as a file server to store business documents or often as a file repository for incoming faxes. It can also have accounting software installed or be used as an email service for programmes such as Microsoft Exchange.


There is no doubt that the practice server is a critical piece of infrastructure and central to the successful operations of a clinic.


So how much does it cost to own and operate a practice server that is so critical to your business? Is there a way to reduce the operating costs? Are there alternative solutions that not only cost less but also reduce the risk of having to maintain a practice server? These are important fundamental questions that all practice owners must ask themselves both when setting up a new practice or  when operating an existing practice.


Let’s look at costs first! It is mind-blowing!


The objective is to calculate the total cost of purchasing, operating and maintaining a practice server exclusive of all other peripherals like printers, routers and user computers located at reception desks or doctors rooms. This way we can accurately calculate the cost of ownership and make a valid comparison between on-premise machinery versus a cloud service.


Table 1 summarises the estimated costs of buying, owning and operating a practice server for a GP clinic with 5 doctors and 4 administration staff applying best practice processes to ensure the business runs without disruption.


Table 1: Practice Server Costs


In-House Costs

Year 1 Year 2+



Server x 2

$14,000 $3,500


$2,000 $500


$4,000 $1,000


$1,000 $250

Hardware setup, networking & server backups and testing

$5,000 $1,250

Clinical software installation & configuration

$5,000 $1,250

Sub total

$31,000 $7,750



5 doctors & 4 support. FTE $1000 pa per FTE

$9,000 $9,000

Office 365

5 doctors & 4 support. Office 365 with Storage @ $12pm

$1,296 $1,296

Sub Total

$10,296 $10,296

Operating Costs


1700W at $ 0.37running 24/7 (2 x 850W server) running @ 1/2 power

$2,643 $2,643

Computer Room

Assuming a nominal 2% floor coverage @ $100k per year

$1,000 $1,000

Backup Equipment

800W at $ 0.37running 24/7 running @ 1/2 power

$1,321 $1,321

A/C 9m3 room

24/7 running costs at $0.50 per hour

$4,464 $4,464

Sub Total

$9,428 $9,428

Monitoring and Management

Server Management

$1000 per month

$12,000 $12,000

Sub Total

$12,000 $12,000


$62,724 $39,474


Capital costs for year 1 exceed $30k. In combination with initial software licensing (including practice management software and MS Office 365), electricity costs and consulting fees to both setup and manage your infrastructure, takes the total year 1 expenditure to $62,724


Ongoing annual costs are estimated at $39,474 per year. Over a five-year period, the total cost of ownership is estimated to be $220,620


Cloud Service Costs


Calculating the total cost of ownership for cloud services is easy. There is no need for a dedicated practice server to host the clinical and practice management software, and the only requirement is to include licensing and initial software configuration costs.

Of course, as previously stated, the practice server is often used for other purposes, the most common being a file server for the practice, where documents are saved. To compare like for like, subscriptions to MS Office 365 for all staff are also included. MS Office 365 is a cloud offered service providing access to MS Word, Excel, Email and most importantly OneDrive. OneDrive is a dedicated cloud based file service hosted in Australia when linked to an Australian entity. This guarantees that any clinical documents are saved on OneDrive securely and in Australia. Practices can use OneDrive to file and backup business documents and faxes. Table 2 summarises the estimated costs of cloud services.


Table 2. Cloud Services Costs


MediRecords Year 1 Year 2+

SetUp Fees

Medicare, Training, Letter Templates, MHR, Messaging $2,750 $0

Data Migration

$1,500 $0


5 doctors & 4 support, 4 Integrated, 2 Clinical, 3 Practice

$7,560 $7,560

Office 365

5 doctors & 4 support. Office 365 with Storage @ $12pm

$1,296 $1,296

Sub Total

$13,106 $8,856


Including setup fees, data migration and licensing of both MediRecords and MS Office 365 the total year one estimated cost is $13,106. Ongoing annual costs are estimated as $8,856


Conclusion – The results Speak For Themselves


Comparing like for like costs between an in-house practice server vs cloud services, excluding all other peripherals like printers and users computers, significant savings can be made.


In year one alone the costs saving is estimated as $49,618  Ongoing annual cost savings are estimated as $30,618 and over a five year period the total estimated savings are a staggering $172,290


To put this saving in perspective, and assuming 20 consults per day with an average billing rate of $70 per consult, this would translate to an extra 5 days holiday for each of the 5 doctors doctors each year.


There is no doubt that significant savings can be made by moving the entire practice to the cloud, the numbers speak for themselves. However that’s not the only reason it’s a smart move. Cloud services providers offer backups and redundancy. Knowing that your information is being backed up, secure and available provides peace of mind to the practice owner – how do you put a price on that!