A New Computer? You can afford it

by David Orenstein freelance writer

It would be downright arrogant and presumptuous for me to assert—without knowing the scantest details of your practice—that you can afford a new computer. But you can. This has never been more true.

You might not have the cash on hand, but as a percentage of your revenues, computing costs have been shrinking faster than a lollipop in a young patient’s mouth.

The proof comes from the Bureau of Labor Statistics, the government group that measures the Consumer Price Index. According to its averages for the nation, the real cost to consumers of physicians’ services rose 49.7% over the last 10 years, from an index value of 168.8 in April 1991 to 252.8 in April 2001. Over that same time, the real cost of computers and related equipment dropped 75.4%, from an index value of 89.9 in April 1991 to 22.1 in April 2001. Wouldn’t it be nice if more expenses dropped while revenues rose? There is no surer prescription for profits.

Now, I know what you are thinking: Computers are not 75% less expensive than they were 10 years ago. The bureau keeps a consistent measure of computer costs over time by adjusting for their capability as well as their dollar cost. If a $1300 computer can do more today than the same price computer could do last year, its index value goes down. It’s about the value for the money.

So what does this all mean? Computers are a valuable asset to your practice. They offer ever-increasing capabilities at an ever-declining relative cost. They are capital investments that can increase productivity, yet they always look as good as any expense can on the financial statements.

This, of course, assumes you are putting your computers to good use. If they aren’t making a contribution to your business, then certainly don’t buy another. But I’ll bet the PCs in your office allow you and your staff to handle documents, billing, scheduling, and patient data more efficiently than before. The Web is helping you do research and market your practice. E-mail enables you to communicate efficiently with your colleagues and patients.

If computers have indeed improved your productivity and the economics of buying computers are perpetually improving, then why not buy a new one? If you could before, you probably can now. The only reasons not to are a lack of cash flow or all the software you need can run on your current system. If either of these is true, then you don’t need to buy a computer just because some statistics in Washington say it is economical. But if you are using an ancient 150 megahertz machine, or even if you have a 300 megahertz Pentium II computer with 32 megabytes of RAM and a 4 gigabyte hard drive, consider upgrading.

For $1300, Dell or Compaq will give you a 1 gigahertz Pentium III with 128 megabytes of RAM and a 20 gigabyte hard drive. Such a system can easily handle state-of-the-art desktop speech recognition software. It also will be ample to run the next version of Windows, called Windows XP. Due out in October, the overhauled Windows XP promises to be much more stable and reliable than Windows 95, 98, or Me. In fact, it probably is worth waiting to buy a new PC just for that software. One caveat: Older software might have difficulty running on the new operating system.

Yes, technology can be difficult. But if you use computers right, they can be among the best investments you make in your practice. Especially during a gloomy economy when PC sales have dropped for the first time, computer companies are under great pressure to please you. So if you can justify a new computer, get one. Economically speaking, it’s hard to go wrong.

David Orenstein is a technology and business writer in Silicon Valley. If you'd like to learn more about a certain computer topic, e-mail him at davealli@home.com.