Cloud Computing or Data Center - How Hospitals Should Analyze Their Health IT Storage Needs

By James Ellis and Aaron Razavi
01:28 PM


Datacenters are booming. Demand grew 13% in 2010 and is expected to continue to accelerate according to New York research firm Tier 1. However, demand has outpaced the rate of construction for physical space, thus alternative strategies of data management are being considered.  Hospitals and health systems are evaluating substitute economic efficiencies for storing electronic health records, diagnostic images, email programs, and other applications. The two current practical models are: the presently preferred method of internally and physically housing thousands of servers known as data centers; and cloud storage, the virtual model also utilizing thousands of serves, although off-site.
A data center is conceptually "concrete" – a large, technologically advanced, singularly purposed, on-site physical structure housing a multitude of server banks. Data centers, for the purpose of this discussion refer to a component typically located on the hospital’s campus or retrofitted within the hospital. Contrastingly, cloud computing incorporates an extensive network of servers, usually from a third party vendor, located anywhere in the world. Instead of electronic medical software or other applications downloaded on each computer, a central server is accessed by the entire network. Typically this results in lower cost for computer configuration and decreases maintenance costs while freeing data storage capacity. All of these efforts combine to allow hospitals to better utilize their resources and focus on their core mission – patient care.
With all the benefits that cloud concepts provide it is important to critically analyze the potential risks. The risk factors are humanistic and yet to be to be determined practical or impractical. To what degree does the hospital lose control of proprietary information? What are the legal ramifications of compromised patient information? How secure is the system?
Processes such as electronic health records, streaming MRIs and diagnostic visuals, email programs, and other hospital applications are complicated pieces of software that need maintenance and tweaking. The cloud concept currently appears challenged when handling these applications. Additionally, costs accrue as increased bandwidth is required. Should the cloud be compromised or "crash" the user has little ability to physically correct the issue, as an onsite data center would afford. Security is a delicate issue as well. Cloud providers are known for their security capabilities; actively searching for hackers and unwanted visitors, which hospitals are ill-equipped to defend.
Cloud regulations are a new legal field and the online transmission of certain health documents has the ability to signal red flags. In order to avoid this, hospitals need to revise all software licenses making sure there are no conflicting conditions before adopting a cloud.
My experience with on-site data centers is that they tend to be extremely expensive and potentially problematic. Items of concern include: older facilities are physically obsolescent in their ability to accommodate newer technology, physical encapsulation is required, a dry fire suppression system may be incompatible with existing systems, "clean" electrical demand requires extensive retrofitting, an isolated backup power generator service proximally located is essential, the potential threat of a total data loss and the crippling downtime scenario. However, there is always something to be said for controlling your environment and your own destiny. Efficient models for new onsite medical office buildings are proving cost effective when incorporating a data center within the foundation.
I advise starting small. If a cloud concept is enticing, try moving some of the less complex systems such as email and payroll to the cloud first while leaving the more critical and complex software in-house. This way the hospital IT team has a chance to familiarize themselves with the cloud with lower risk. Bambino Gesù Hospital in Vatican City, Italy, did exactly this when they moved those systems onto a Microsoft business productivity online standard suite. They now save 60% on money that would have been allotted for data center needs. Other notable advantages indicated were more time and increased profile for the IT group, and hospital staff collaborated with patients better fostering their connection.
While data centers remain the traditional route offering enhanced on-site capabilities and distinctive benefits such as control, familiarity, and reliability, cloud concepts are quickly gaining traction with contrasting benefits. Considering the dynamics of the industry, perhaps a balanced blend of both strategies is optimal.

James Ellis, CEO, Health Care Realty Development Company, is a nationally recognized successful real estate investor and developer of medical office properties with a comprehensive knowledge of sophisticated real estate transactions, cost effective designs, and efficient property management.

Aaron Razavi is Associate Marketing Director at Health Care Realty Development.



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