The cloud offers considerable benefits to healthcare, which is undergoing dramatic and essential transformation without the necessary financial or technological means to support the level and speed-of-change required.

As such, the model’s flexibility, scalability and security are enticing attributes for healthcare – but the ability to create collaborative networks in the cloud may be the most valuable to hospitals and other healthcare organizations in the long run.

[See also: Patient records in the cloud, part 3: Potential for end-to-end encryption.]

Here are some of the challenges facing healthcare for which the cloud has advantages:

• Large and small healthcare providers need to be collectively accountable for the care of specific populations, and in turn, to deliver better care at lower costs. At a minimum, to coordinate care for their mutual patients, these organizations need to be able to collect, store and share data with one another, not to mention with other providers if those patients seek care beyond their "medical home." The cloud can provide a virtual location for this kind of collaboration to occur.
• The storage requirements for picture archiving and communication systems (PACS) and the implications for meaningful use of EHRs alone are overwhelming for most hospital and health system IT departments. Cloud storage can reduce both the on-site computing and real estate investments that would otherwise be required.
• Clinicians must be able to access and analyze large volumes of population health data to help them quickly determine the most effective course of treatment for their patients. This kind of analytical power would require many large servers that are beyond the investment resources of most, if not all, healthcare providers. Instead, in a manner analogous to how companies utilized that IBM spare computing power a quarter-century ago, providers can harness the power of the cloud today.

The business side of accountable care can also benefit from cloud technology. Provider organizations will soon need to handle the administrative complexities of healthcare reform, from value-based purchasing to bundled payments. Collecting, sharing and reporting data from the organizations involved — many of which will not share the same technology, be housed in the same location, or even be part of the same legal entity— adds another layer of complexity, as well as an opportunity for the cloud to deliver value.

Scaling resources for best use, cost savings
In far too many healthcare organizations, the cloud is viewed as a project, not a strategy. Viewing the cloud in this manner could cause healthcare organizations to recreate many of the same integration challenges they face today with technology deployed on-site, instead of looking to the future for additional ways that they can use the cloud to their benefit.

[Q&A: How Ochsner is 'Amazon-izing' itself with big data.]

Rather than sticking to the siloed IT systems of the past, a more strategic approach to cloud technology requires thinking about the wide variety of clinical and business processes it can support and for whom. While clinical needs are essential — that's the business of healthcare — there are other functions with related data and processes that intersect and impact the clinical world. The finance department needs to be part of the equation to better understand the total cost of providing care, and to charge and be reimbursed appropriately across the continuum of care. The cloud can also play a role in communicating with patients, to help ensure they are "following doctor's orders" in an attempt to reduce readmissions and improve customer satisfaction, both factors that will impact reimbursement levels moving forward.

Extending the cloud to the supply chain
When looking at places where computational power is sorely needed in healthcare, an often-overlooked area is the supply chain. There is a wealth of data in supply chain systems about products used in patient care. While hospitals have typically focused more on the price paid for products, capturing data about utilization, and linking that data with information in other systems, can provide insights into how the products used in patient care impact both cost and quality, the two factors that will be measured under value-based purchasing.
The supply chain is also the second largest and fastest growing operating expense for most hospitals.

In other industries, the cloud's ability to facilitate supplier collaboration is seen as a source of operational efficiency and cost reduction. That value is being recognized more in healthcare. According to a 2009 HIMSS study, more than three-quarters of hospitals reported using an exchange, which offers supply chain applications in the cloud, to do business electronically with the suppliers from which they purchase the majority of their consumable products. Efforts are now underway to provide similar functionality and visibility for implantable devices. Given the highly manual nature of the implantable device supply chain, the hands-on involvement of both clinicians and manufacturers, and the fact that these devices are some of the most expensive and sophisticated used in patient care, the cloud has great potential to deliver even greater operational, clinical and financial benefits.

Collaborating on a cloud strategy
Development of a cloud strategy cannot be left to the IT department alone. It needs to be a collaborative effort, involving the highest levels of the organization. Executives responsible for overall performance and functional leaders from clinical areas, finance and operations must be involved in the process.

This cross-functional team should consider these 6 questions:

1. What kinds of data do you need now and in the future?
2. How is that data structured?
3. How will you source/access the data?
4. How will you use the data, e.g., to understand profitability and quality of specific service lines?
5. What level of security is required? (Remember, it is different for different types of data.)
6. Who will you need to share the data with and what is their cloud strategy?

Involving business partners, both internally and externally, in developing your cloud strategy can avoid not only integration issues, but also increase standardization. Both clinicians and process engineers have long taught that variation is the enemy of quality. By developing, deploying and agreeing to use the same set of applications and processes in the cloud, healthcare can reduce variation and increase quality in both care delivery and business processes.

Obstacles unique to healthcare

Some of the potential applications for the cloud discussed in this article are not yet fully developed, but they are close. The time to consider future usage is now, not when the organization is already behind the times. There are other aspects that can be deployed and deliver benefits today. With the currently available technology, the bigger obstacles to adoption in healthcare are often cultural, such as getting disparate parties and functions to work together, and cautionary, especially around access to patient information.

[Related: NASCIO's 12 tips for states considering the cloud.]

When asked, security is often listed as the number one reason why healthcare IT executives do not trust the cloud. If they do not have complete control over the data, they question how they can be fully responsible. But that perception is changing, especially when you consider just how many data breaches in healthcare involve data stored in lost or stolen hardware. With reputable and reliable cloud service providers, the onus for security and for disaster recovery is on them, and because it is their core competency, they are better at it than most healthcare IT organizations.

A cloudy future

Cloud perceptions and comfort levels are changing. A third of healthcare organizations are already using cloud applications, according to recent studies, while nearly three-quarters of those who responded “no” reported that they plan to use the cloud in the next three to five years. Those numbers are relatively in line with other industries, and may be lower than actual. For example, many financial and supply chain operations at hospitals and healthcare systems are already using cloud-based applications for paycheck processing and supply chain e-commerce.

As time passes, more security-conscious industries like finance are beginning to perform mission-critical functions in the cloud. As their use grows, healthcare is expected to follow suit. The migration will understandably evolve, first with private clouds used only by authorized personnel within specific organizations, but will gradually evolve to more public clouds with applications that can be shared by authorized users from different organizations.

Ultimately, as technology continues to evolve, we will see what Gartner Research has coined "cloud service brokerages," which can take on more of the responsibility for managing access and the movement, translation and aggregation of data between multiple clouds. In other words: While clarity around the cloud increases, the forecast is for partly to eventually mostly cloudy – and in many ways, healthcare transformation depends on industry participants parting the confusion around the cloud and finding the most effective use of this technology.

Karen Conway is executive director of GHX.
 

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