Although a number of authors have described the challenges and benefits of filmless operation using a hospital-wide Picture Archival and Communication System (PACS), there have been few descriptions of a multi-hospital wide area PACS. The purpose of this paper is to describe our two and a half year experience with PACS in an integrated multi-facility health care environment, the Veterans Affairs Maryland Health Care System (VAMHCS). On June 17, 1995 the Radiology and Nuclear Medicine services became integrated for four medical centers forming the VA Maryland Health Care System creating a single multi-facility imaging department. The facilities consisted of the Baltimore VA (acute and outpatient care, tertiary referral center), Ft. Howard (primarily long term care), Perry Point (primarily psychiatric care), and the Baltimore Rehabilitation and extended care facility (nursing home). The combined number of studies at all four sites is slightly more than 80,000 examinations per year. In addition to residents and fellows, the number of radiologists at Baltimore was approximately seven, with two at Perry Point, one at Ft. Howard, and no radiologists at the Rehabilitation and Extended Care facility. A single HIS/RIS, which is located physically at the Baltimore VAMC is utilized for all four medical centers. The multi- facility image management and communication system utilizes two separate PAC Systems that are physically located at the Baltimore VA Medical Center (BVAMC). The commercial system (GE Medical Systems) has been in place in Baltimore for more than 41/2 years and is utilized primarily in the acquisition, storage, distribution and display of radiology and nuclear medicine studies. The second PACS is the VISTA Imaging System, which has been developed as a module of the VA's HIS/RIS by and for the Department of Veterans Affairs. All of the radiology images obtained on the commercial PACS are requested by the VISTA Imaging System using DICOM query/retrieve commands and are stored on a separate server and optical jukebox. Additionally, the VISTA system is used to store all images obtained by all specialties in the medical center including pathology, dermatology, GI medicine, surgery, podiatry, ophthalmology, etc. Using this two PAC system approach, the hospital is able to achieve redundancy with regard to image storage, retrieval, and display of radiology images. The transition to a 'virtual' multi-facility imaging department was accomplished over a period of two years. Initially, Perry Point and Ft. Howard replaced their general radiographic film processors with Computed Radiography (CR) units. The CR units and subsequently, the CT and Ultrasound systems at Perry Point were interfaced (DeJarnette Research Systems) with the commercial PACS located in Baltimore. A HIS/RIS to modality interface was developed (DeJarnette and Fuji Medical Systems) between the computed radiography and CT units and VISTA Information System at Baltimore. A digital dictation system was recently implemented across the multi- facility network. The integration of the three radiology departments into a single virtual imaging department serving four medical centers has resulted in a number of benefits. Economically, there has been the elimination via attrition of one and a half radiologist FTE's (full time equivalents) and an administrative position resulting in an annual savings of more than $375,000 per year. Additionally, the expenditures for moonlighter coverage for vacation, meeting, and sick leave have been eliminated. There is now subspecialty coverage for primary or secondary interpretation and for peer review.