Can Health IT Teams Find A Silver Lining In The Cloud? | Deloitte US has been saved
By Michael Black, managing director, and David Veroff, specialist leader, Deloitte Consulting LLP
“Re-imagine Health” is the theme of this year’s HIMSS Executive Meeting, which kicks off on March 14 in Orlando. Several scheduled sessions will explore the use of cloud technology to modernize health care business models and to improve the overall patient experience. While industries such as banking have been relying on cloud technology for years, many health system IT departments are still exploring the peripheries. That situation, however, appears to be changing quickly.
Even before COVID-19 accelerated the use of digital health technologies, health systems were nearing an inflection point in their cloud-adoption journey. The US health sector is expected to spend up to $7.8 billion this year on cloud software (e.g., IaaS, SaaS, PaaS, cloud management, and security), up from an estimated $6.8 billion in 2021, according to our research. But the transition to the cloud is much more than just an IT investment. We see it as a critical strategic play.
Here’s why: Cloud technology has the potential to disrupt health system business functions and alter the way care is delivered. For example, cloud-based electronic health records (EHRs)—populated by interoperable data from a variety of sources and combined with artificial intelligence—could transform decision-making processes and help improve the quality of care. EHRs coupled with scalable cloud-based analytics could open the door to new types of patient monitoring and predictive interventions and could enable new ways for consumers to access health care services and engage in their health. Such EHRs might also improve operational efficiencies by enabling faster access to actionable insights at lower costs than traditional IT models. In addition, a wide range of entities (hospitals, outpatient centers, urgent care centers, skilled nursing facilities, employed-physician office practices, and affiliated physicians) might all be under the umbrella of a single health system. Some health systems also operate health plans or have value-based-care contracts with health plans. The scope and complexity of managing the technology of multiple organizations on-site is one of the rationales for moving to a cloud-based platform.
Cloud cut health system’s IT spend by 20%
We recently worked with a leading health system that saved $50 million—about 20% of its total annual operating budget for information technology—by transitioning most of its applications and data to the cloud. This was accomplished by taking a holistic view of the organization, its operations, and IT optimization levers. The health system used benchmarking to identify cloud opportunity areas. It developed a cloud-suitability analysis, migration and modernization strategy, and a roadmap. Process changes needed to support cloud implementation were identified, and 90% of the organization’s applications were moved to the cloud.
Cost-savings was just one benefit of the transition to the cloud. This strategy also made it possible for this organization to:
- Accelerate its solution-development capabilities and boost organizational agility
- Support new channels of care (e.g., at-home diagnostic testing and telemedicine)
- Create digital processes to increase automation and operational efficiencies
- Leverage advanced analytics and artificial intelligence (AI) to revolutionize diagnoses, treatment planning, patient monitoring, and drug discovery
- Manage health data in a secure, trusted, automated, and error-free way via next-generation technologies, such as blockchain, enabled by security and privacy-by-design principles
- Modernize the full suite of applications to provide agile functionality and delivery and greater opportunities to create an insights-driven organization
Transition to cloud can be complex
Moving a health system’s data to the cloud—even when using a phased approach—is typically a complex undertaking. Health care organizations that are not on the cloud typically have to invest in expensive onsite data storage. They might also need to regularly update IT security to ensure patient information is protected. Many health systems began transferring mountains of paper patient records into electronic files more than 20 years ago, and many of their IT systems have dramatically expanded organically over the years. As a result, a single health system might have multiple distinct technology platforms in place to manage an array of different types of provider organizations’ needs.
There is also the cost: Core administrative systems typically have deeply embedded business logic and require large initial outlays when being converted. Moreover, health care data, technology, and privacy constraints are typically more complex than those of many other industries and there is a shortage of health care-focused cloud professionals. However, these challenges and costs are typically more than offset by cloud’s potential benefits versus on-premises computing solutions.
Some organizations view cloud as an extension of their existing IT infrastructure and might jump straight into migrating individual applications and data assets without considering the potential enterprise-level advantages of a holistic cloud implementation. A detailed cloud strategy and blueprint can allow for a cohesive migration approach that aligns with the organization’s strategic priorities. Implementing cloud without a clearly defined path forward could result in lack of organizational buy-in, and an inability to maximize efficiencies/cost optimization opportunities.
Some hospitals and health systems are at a crossroads. There is an acknowledgement that continuing to invest in existing data centers is not a forward-looking strategy. The transition to cloud should not be seen as merely another data center. Instead, it should be considered a catalyst for change that could make it easier for hospitals and health systems to reimagine the future. Health system IT leaders who keep their heads in ‘the cloud’ could be well positioned to help their organizations re-imagine health.
