Reimagine cloud computing in healthcare
As healthcare systems work to reimagine health, using cloud technology to modernize healthcare business models and improve the overall patient experience is top of mind. While some industries have relied on cloud computing for years, many health system IT departments are still exploring the peripheries. That situation, however, appears to be changing quickly.
Even before COVID-19 accelerated digital health technologies, health systems were nearing an inflection point in their cloud-adoption journey. The U.S. health sector is expected to spend up to $7.8 billion this year on cloud software, up from an estimated $6.8 billion in 2021, according to our research. But the transition to the cloud is much more than just an IT investment. We see it as a critical strategic play.
Here’s why: Cloud technology has the potential to disrupt health system business functions and alter the way care is delivered. For example, cloud-based electronic health records (EHRs)—populated by interoperable data from various sources and combined with artificial intelligence—could transform decision-making processes and help improve the quality of care. EHRs coupled with scalable cloud-based analytics could open the door to new types of patient monitoring and predictive interventions and could enable new ways for consumers to access healthcare services and engage in their health. EHRs might also improve operational efficiencies by enabling faster access to actionable insights at lower costs than traditional IT models. In addition, a wide range of entities might all be under a single health system. The scope and complexity of managing the technology of multiple organizations onsite are one of the rationales for moving to a cloud-based platform.
Cloud cut health system’s IT spend by 20%
We recently worked with a leading health system that saved $50 million—about 20% of its total annual operating budget for information technology—by transitioning most of its applications and data to the cloud. This was accomplished by taking a holistic view of the organization, its operations, and IT optimization levers. The health system used benchmarking to identify cloud opportunity areas. It developed a cloud-suitability analysis, migration and modernization strategy, and a roadmap. Process changes needed to support cloud implementation were identified, and 90% of the organization’s applications were moved to the cloud.
Cost-savings were just one benefit of the transition to the cloud. This strategy also made it possible for this organization to accelerate its solution-development capabilities and boost organizational agility, support new channels of care, create digital processes to increase automation and operational efficiencies, and modernize the full suite of applications, among other notable benefits.
Transition to cloud can be complex
Moving a health system’s data to the cloud—even when using a phased approach—is typically a complex undertaking. Healthcare organizations not on the cloud typically have to invest in expensive onsite data storage. They might also need to update IT security to ensure patient information is protected regularly. Many health systems began transferring mountains of paper patient records into electronic files more than 20 years ago, and many of their IT systems have dramatically expanded organically over the years. As a result, a single health system might have multiple distinct technology platforms in place to manage many different types of provider organizations’ needs.
There is also the cost: Core administrative systems typically have deeply embedded business logic and require large initial outlays when converted. Moreover, healthcare data, technology, and privacy constraints generally are more complex than those of many other industries, and there is a shortage of healthcare-focused cloud professionals. However, these challenges and costs are typically more than offset by the cloud’s potential benefits versus on-premises computing solutions.
Some organizations view the cloud as an extension of their existing IT infrastructure and might jump straight into migrating individual applications and data assets without considering the potential enterprise-level advantages of a holistic cloud implementation. A detailed cloud strategy and blueprint can allow for a cohesive migration approach that aligns with the organization’s strategic priorities. Implementing the cloud without a clearly defined path forward could lack organizational buy-in and an inability to maximize efficiencies/cost optimization opportunities.
Some hospitals and health systems are at a crossroads. There is an acknowledgment that continuing to invest in existing data centers is not a forward-looking strategy. The transition to the cloud should not be seen as merely another data center. Instead, it should be considered a catalyst for change, making it easier for hospitals and health systems to reimagine the future. Health system IT leaders who keep their heads in ‘the cloud’ could be well-positioned to help their organizations reimagine health.