Up to a couple of years ago, healthcare technology executives advocating the use of managed services, cloud, and other off-premises uses of data were mavericks. Management told us that cloud presented too much risk. One leading doctor in a prestigious institution said to me, “I would rather see my institution’s name on the front page of the New York Times because of a data breach on premise. Seeing adverse publicity because we released our data to the cloud and a bad thing happened will destroy our reputation.” Management insisted that we keep the data under the control of our institutions by keeping it in a data center. In the age of health information exchange and value-based medicine, the rising cost of that infrastructure paradigm is no longer feasible. Today we hear healthcare CIOs telling us that the preference for solutions is cloud first, and on-premises solutions must be justified: Cloud-based solutions are becoming the default choice.

This seismic shift is due to several factors: 

  • Building and operating data centers is complex, expensive, and resource-intensive.
  • The network is fast and strong.
  • The removal of capital costs of hardware and infrastructure from budgets releases a great deal of capital for other more pressing needs.
  • The enactment of the HIPAA Omnibus rule, finalized in January 2013 and effective as of September of the same year, forces the vendor community to accept the responsibility for PHI and thus changed the paradigm around the feeling of regulatory protection granted to healthcare organizations when contemplating a "loss of control" of their data that was feared as they anticipated moving functions and capabilities to the cloud (http://www.hhs.gov/ocr/privacy/hipaa/administrative/omnibus/).

More importantly, as we struggle to close the gaps within the continuum of care, moving data and processing off premises allows for a fluidity of information that is perhaps only psychological but nonetheless is important. So we see:

  • Contemporary health information exchanges being cloud-based.
  • Email services increasingly being cloud-based.
  • Lab systems moving to the cloud.
  • Large EMR solutions like Epic and Cerner moving to the cloud.
  • Cloud-based ambulatory solutions like Practice Fusion and Modernizing Medicine gaining traction and eyeing the enterprise space for further growth. 
  • Organizations buying hosting solutions for core features and functions instead of building new data centers.
  • Shadow IT emerging outside the scope of the IT department with cloud-based services.
  • Clinical delivery of telehealth where doctors practice in one location and cloud-based infrastructures connect them to patients and health systems.

The advice that I give to Forrester’s clients is to embrace this paradigm and move as much as possible to the cloud. However, this does not reduce or mitigate the CIO’s need to own the solutions. They must undergo significant organizational shifts in order to be responsible for the technical capabilities and security of these cloud solutions via oversight and ownership of the connectors between them.

For some details on these ideas, see my research report Predictions 2015: The BT Agenda Underpins Healthcare Transformation.