Cloud computing, from device security to telehealth to the back office, is making its case

Big opportunities for efficiencies and cost savings mean cloud should become 'the archetype for small organizations' (and some big ones too).
By Sherree Geyer
12:18 PM

In 2013, Brad Huerta, incoming CEO at Arco, Idaho-based Lost Rivers Medical Center, replaced its laser-disc electronic health records with cloud-based technology. The decision, driven by meaningful use, resulted in across-the-board cost savings for the critical access hospital.

"Just our MU adaptation alone saved $700,000 in terms of accounts-receivable days coming down and cash on hand," said Huerta. "In terms of transparency, reduced medical errors and higher patient satisfaction – at least a million to a million and a half."

He added: "The cloud saved us the cost of three billers and coders, fulltime positions at $50,000 with benefits."

According to the HIMSS report, "The Cloud Evolution in Healthcare," 59 percent of health IT professionals either currently use or plan to use cloud, and there's been an uptick in back-office cloud applications from 22 percent in 2014 to nearly 47 percent in 2016.

Kathy Downing, senior director, information governance at AHIMA, sees a trend towards cloud-based computing based on cost and scalability.

"If you've got servers in a room taking up space, you can't put EKG machines there," she said. "Anytime you use physical space, ask if that should be revenue producing."

George McCulloch, executive vice president for membership and professional development at CHIME, thinks cloud computing benefits small, rural hospitals on a budget. "As capital gets tighter, (hospital executives) want a time expense rather than a capital item," he said.

[Also: Top 5 ways cloud computing is making health IT inroads]

"People are more comfortable with things being in the cloud and the people who manage it. For smaller organizations, having someone else manage the technology is more of an option than ever before," McCulloch added.

"For small organizations, it might be more effective and secure to use a third-party for your cloud because they have expertise you don't," said Downing. "Even for stand-alone hospitals doing online information exchange, it becomes more cost effective to outsource to the experts than to have staff handle these versatile things."

Huerta agrees: "Even if I could afford to buy a big legacy system, I couldn't afford the IT guy to run it," he said.

McCulloch, who calls cloud computing "the archetype for small organizations," sees the technology "working its way up the size ladder. Buying it as a service rather than making a big investment while still getting value that's analytical is getting more attractive to large organizations."

Indeed, Huerta thinks the cloud can help all providers, working on disparate data systems, meet the interoperability requirements of the Affordable Care Act.

"Everyone needs to be able to talk to every hospital," he said. "The only way to get there will be cloud-based computing. That's why you see larger hospitals using the cloud."

But Downing feels that "large organizations with excellent IT infrastructures don't need the cloud. They have expertise even beyond what a cloud provider might have."

Telehealth, she said, is one area that's "ripe for a public cloud."

In fact, Lost Rivers partners with the University of Utah, Salt Lake City, to provide tele-burn, tele-psych and trauma services to patients, said Huerta. "Using cloud-based technology is critical to transferring information in real-time."

[Also: Cloud choice no longer 'pie in the sky']

Downing describes disaster recovery and backup as "the first areas where hospitals dip their toe in cloud computing. The idea is to back-up to an offsite cloud so, if you have a hurricane, you can get those systems up quicker because they're at a separate site.

"If you research HIPAA security and vulnerability, you'll find the No. 1 breach is, 'I lost my computer and it had a 1,000 patients on it. I lost my flash drive and it had 1,000 patients on it. If it's in the cloud, you don't have to put it in devices," she said.

Currently, Lost Rivers uses the cloud for emergency department and billing applications with plans to deploy it in materials management after the first of the year. Huerta enthusiastically endorses the cloud saying "You're going to be the last one at the train station if you don't get on.

"There's no doubt in my mind, this is where the industry's going. The smart money's on the early adopters. Cloud-based platform is where we're going."

McCulloch advises hospital executives to assess the apps and data appropriate for the cloud as well as its business impact. Look at the ROI, including cost and risk components of failure if you can't get to stuff you need," he said.

Downing warns: "You need to have a good connection or you'll constantly be troubleshooting performance or downtime. Application availability is important. All that has to be in the service-level agreement."

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