Cloud economies of scale: Making the impossible (or at the least the very difficult) affordable

Functions impossibly expensive for a single hospital, or even a large health system, become affordable
By Carrick Carpenter
11:38 AM

When most businesses consider adding cloud provisioning to their IT strategy, they are often seeking more agility, flexibility and simplicity. And those are good reasons to use the cloud. But in healthcare, there is another, more compelling reason to add the cloud to your strategy: it can help solve two of the biggest hurdles facing healthcare IT - security and data integration.

It’s all about economies of scale.

Security and data integration take money, time and focus

The healthcare industry is notoriously bad at security because security is hard. It takes significant financial resources and specialized talent to do it right, combined with a consistent focus on monitoring and updating to keep ahead of the bad guys. Most healthcare IT departments are strapped for both money and staff time, and security almost always gets pushed down the priority list, because the needed resources just aren’t available.

Data integration is also poor in healthcare, mostly due to the proliferation of proprietary applications that don’t play well together and the difficulty of getting these systems to talk to each other. Some healthcare systems have more than 200 different clinical applications built on proprietary platforms. Despite legislation meant to drive interoperability there is still a considerable amount of work to do among electronic health records (EHR) vendors. Dialogue is increasing among healthcare vendors but the reality, as of now, is that sharing data remains a complex endeavor.  

Integration, like security, takes significant financial resources and specialized talent, which is why it isn’t a function that in-house IT departments regularly attempt.

The cost of poor security and lack of data integration can be huge. Breaches are expensive and damage your reputation. Poor data integration makes you less able to do the population health and predictive analytics you will need to survive under the outcomes-based reimbursement models that are coming soon. But both of these functions can be far more affordable if you can spread the costs over many health systems. And that’s what the cloud is doing now for security and will likely do for data integration and analytics in the near future.

Better security makes you less of a target

A dedicated healthcare cloud can provide far superior security than a single hospital can hope to offer. Because of the economies of scale, a cloud customer can have industry-leading security, with data encryption, 24-hour monitoring for intrusion and constant upgrades to prevent breaches. And it is just as available to small organizations as it is to the large. How many hospitals do you know of that have that level of security?

While no one can guarantee that there will never be a breach, a highly secure cloud isn’t an easy target. And like most thieves, cyber-criminals go for the easiest targets. It’s like the old saying about being in a group that is being chased by a bear. You don’t have to run faster than the bear. You just have to run faster than the slowest person in the group. In healthcare, cloud can help you run much faster than the other organizations being chased by the cyber bears.

Better data integration means more accurate analytics

Cloud provisioning as strictly an infrastructure-as-a-service offering can’t overcome the integration barrier, but when you add intellectual property to the infrastructure, new possibilities emerge. A good example of this is cloud-based image archiving. Image data is stored as application-neutral objects in the cloud, and additional functions, such patient record integration, analytics and radiation dose reporting are packaged with the infrastructure, along with tools to facilitate universal access and collaboration. This spreads the costs across many customers, democratizing these higher-level functions.

Imagine if there were a similar repository for data contained within EHRs. Paired with a master patient index, software to mine those records and advanced analytics, such a repository could provide both a unified patient record that would help individual patients and the kind of big data that is useful in predictive analytics. You could integrate genomic data, treatment records, census and social media data and pretty much any other useful data sources to learn more about factors that affect patient outcomes. It would take precision medicine to a whole new level.

It would also democratize these high-level functions, because once the system in place, costs could be apportioned according to use. The economies of scale would make it affordable for even small organizations. Imagine a critical access hospital with access to the same functionality available to large health systems – democracy in the most practical form.

For the present, cloud provisioning can at least democratize infrastructure modernization, because a good cloud vendor will regularly update technology and share the costs across many customers. If your data center is locked in the past and has networking issues, and your capital budget is small, cloud provisioning can put your data and applications on a modern, more flexible platform without a big investment. It can also position your IT services to take advantage of future capabilities such as a master patient index to unify patient records and predictive analytics and precision medicine. And it could make it easier to integrate data from telemedicine services, remote monitoring devices and consumer wearables, all of which are coming soon.

So as you consider whether a cloud infrastructure should be part of your IT strategy, keep in mind the economies of scale. Functions impossibly expensive for a single hospital, or even a large health system, become affordable when you benefit from the economies of scale that cloud offers.