Should Hospitals Continue to Maintain Their Own Data Centers?

With cloud-based solutions offering cost savings and increased security, have on-premises data centers become obsolete?

The healthcare cloud computing market is set to grow at a compound annual growth rate of 22 percent through 2022, according to Technavio. As the market continuously expands, healthcare organizations consider how to best maintain their data centers: on-premises or in the cloud.

Every organization that I work with is questioning the right size of their data center for their health system or hospital,” says Rob Faix, a vice president at Impact Advisors, a healthcare IT consulting firm. “There’s increasing interest in cloud or hybrid-based solutions, as opposed to ‘I’ve got to own everything in my physical data center.’”

Physical data centers still have their advantages, Faix notes. They give organizations control over every aspect of that data center — from security measures and the type of technologies used to which employees can physically access the data. 

With on-premises and cloud solutions both offering key benefits, healthcare organizations must evaluate which solution makes the most sense for them.

Physical Data Centers vs. Cloud Solutions

Physical data centers, whether located on campus or attached to local networks, typically have higher performance speeds. This is helpful for things like picture archiving and communication systems, which are used to store and share medical imaging. 

Physical data centers are also necessary for hospitals that still run legacy applications designed to be used only locally. 

Beyond on-premises data centers, cloud systems — even with their authorized use for protected health informationstill make some hospitals uncomfortable, says Mark Ustin, a healthcare regulatory attorney and partner at Farrell Fritz. 

“There’s still an internal panic about cloud computing solutions, what you’re allowed to do and what you’re not allowed to do,” Ustin says. 

But cloud solutions offer too many benefits to be ignored, such as flexibility and rapid scalability to better meet immediate business demands.

“A cloud-based solution allows them to effectively, with a phone call and a stroke of the pen, increase their computing power in order to meet new demands,” says Faix. And rather than trying to guess future data needs when building a physical center (and possibly overbuilding the space, leaving resources unused), organizations can buy what they need now and scale up later when needed. 

That has prompted many healthcare systems to evaluate what they could do with the large amount of physical space available after a data migration is complete. 

“There’s an opportunity to convert physical data center space that’s inside of a hospital into revenue-generating space, rather than space that costs the organization money,” Faix says.

MORE FROM HEALTHTECH: For IT upgrades, healthcare organizations must think big picture.

Cloud Strategy Must Not Be Overlooked

Despite the benefits, organizations shouldn’t just leap into the cloud

“Outside of what is allowed, there is the question of what our patients are comfortable with, and what our practitioners are comfortable with,” Ustin says. “As with any new technology, we’re still in the period where people are getting used to it.” 

Moving to the cloud won’t solve all of an organization’s data problems, and it certainly won’t protect them from all cybersecurity threats. 

To protect themselves, healthcare organizations need to look beyond vendors that are simply “HIPAA certified.” Organizations need to be asking providers whether they’re compliant with other federal privacy laws and local regulations, and carefully examine what’s covered by the service-level agreement.

“Having this agreement doesn’t absolve you from your obligations in terms of doing your own risk assessment of that solution and where the vulnerabilities are,” Ustin says. 

Nor does it stop employees from getting phished — or employees of vendors hooked into healthcare systems from getting phished. To prevent such attacks, organizations should develop a robust cloud strategy and remain alert to evolving threats.

CLOUD MIGRATION: Determine your workload strategy upfront.

Benefits of Hybrid Cloud Storage

With benefits offered by both on-premises and cloud management, the future will most likely be hybrid, Faix says. “Hospitals and health systems for the foreseeable future will always require some data presence, if for no other reason than hosting the infrastructure systems for the network to connect to the cloud vendor themselves.” 

Hospitals that have already implemented hybrid solutions are seeing the cost savings. 

“Ultimately, it only cost us tens of thousands of dollars per year to run those applications in Azure, versus having to make that huge capital investment,” Chris Carmody, senior vice president of infrastructure at the University of Pittsburgh Medical Center, told HealthTech

And it would have cost $1.2 million to introduce the necessary hardware and software to the data center. “Our hybrid cloud approach allowed us to move workloads into the public cloud and back again,” Carmody says. 

Flexibility is also a major benefit of hybrid solutions

“You could move data from this platform to a low-cost cloud storage service for data archiving and long-term backup, then move it back on-premises if you need to,” Jim Livingston, CTO of University of Utah Health, told HealthTech. “You just set the policy and it automates the process.”

By taking a deeper look at evolving cloud architectures, healthcare organizations can find an infrastructure that fits their needs while offering scalability, flexibility and cost savings.

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Aug 09 2019

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