Cloud computing in healthcare is expected to see big time growth by year's end, with the market expanding more than 20 percent from 2012. The biggest driver behind the double digit numbers? More and more providers are getting on board with e-prescribing, says a new industry report. 

The report, conducted by market research firm Kalorama Information, finds that as more docs move away from traditional fax to e-prescribing, their increased storage demands are ultimately fueling the cloud computing market, projected to reach $3.9 billion this year. 

Among the findings, the report also underscores that use of e-prescribing technologies has jumped from below 10 percent in 2004 to approximately 35 percent in 2010.

[See also: E-prescribing in growth mode.]

"e-prescribing creates a variety of storage responsibilities for both the physician and the pharmacy, leading to demand for server space,” said Bruce Carlson, publisher of Kalorama Information, in a news release. "In healthcare, space is often limited and the last thing organizations want is a bulky server."

So, the eRx market is fueling the cloud computing market, but what's driving the uptick in eRx? It's not just the rising demand for storage, officials say. 

First, federal requirements put forth in Stage 2 meaningful use require more than 50 percent of permissible prescriptions to be transmitted electronically. Although some docs are excluded from the core measure -- such as those who write fewer than 100 prescriptions during the EHR reporting period -- providers must meet requirements by October 2014. 

Providers' rush to cloud solutions also pertains to them often lacking the financial wherewithal or time to afford the technical service and staff, officials say.

"A hospital doesn’t want the server crash to be their concern, especially when they are serving patients at all hours," Carlson pointed out. 

With lower reimbursement rates and increases in bad debt cases, many hospitals also use services to address billing concerns. e-prescribing creates a patient record, a pharmacy record and other billing records the group needs to keep working at all times to be successful, findings point out.  

As far as individual state progress with eRx, Delaware, Minnesota, Ohio, New Hampshire and Massachusetts came out on top for e-prescribing, according to a 2012 Surescripts report that measured each state's progress toward safely adopting e-prescribing. Delaware's numbers were the highest, with 53 percent of eligible prescriptions being routed electronically prescribed. 

Alaska, which was ranked the worst, reported only 32 percent of prescriptions being routed electronically. California, Alaska, Colorado, Nevada were also notable underperformers.