Healthcare Business News

Silver lining

Cloud computing brings savings, risks

Posted: May 3, 2010 - 12:01 am ET

Cloud computing is an Internet-based usage of computer applications and services whereby various computing resources, such as computer applications, websites and data centers, are shared in a public utility model. It is a paradigm shift in computing starting with migration from the mainframe to the client server, to the Internet, and to models such as software as a service, or SaaS; platform as a service, or PaaS; and infrastructure as a service, or IaaS.

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The SaaS model allows licensed use of a remotely hosted application. The PaaS model is an environment for application development, testing, deployment, hosting, storage, integration with other Web services, and other utilities. The IaaS model provides access to hardware, DC space, software and operating systems, remote desktop and applications and network management.

At Miami Jewish Health Systems, we migrated our enterprisewide applications to a cloud model. The overall information technology strategy was examined from three business levers: business growth, operational efficiency improvement and improved quality of patient care.

The major components in the strategy were: simplifying IT service delivery and maintenance, reducing costs, relieving critical human talent from maintenance work, reducing resource requirements for major software upgrades, and better managing the platform and infrastructure of the supported applications. Besides these operational efficiencies, these strategies also promise to indirectly boost business growth and quality of care as the system can redeploy scant organizational and technical resources to higher value-added projects.

Cloud computing should reduce the total cost of the system—the larger the hardware footprint, the larger the potential for savings. Cloud computing should eliminate redundant hardware from the data center, reducing maintenance and cooling costs. It should free up skilled technical resources to be redeployed as business analysts to proactively assess and prioritize IT projects for top business goals.

An enterprise content management system, a corporate website, the enterprise medical record platform and the human resources information system have been migrated from a client-server to a PaaS cloud environment. A time-and-scheduling management system will be migrated to SaaS in the near future, while a business intelligence SaaS platform is being planned for integration with the electronic health-record platform in the same PaaS environment and location as the EHR platform.

Performance depends on Internet connectivity, and an Internet outage can affect business. Risk is mitigated with Internet redundancy—an immediate switchover occurs if a primary link fails. Contracts must include clear service-level provisions to compensate for downtimes, with clear monetary penalties and recompense for system nonavailability. The client should insist that vendors provide system uptime reports. Contracts also should include disaster management and backup clauses and procedures.

An outage also can come from insufficient Internet bandwidth capacity, so this must be planned for and supplemented with an efficient internal network to ensure that users get the best possible quality out of the system.

A rigorous cost-benefit analysis should be undertaken at the outset for each migration. Some cost parameters to be considered include: the projected costs in replacing hardware, projected savings in labor and software licensing costs, savings in peripheral costs (such as backup tapes) and savings from not needing a disaster backup “hot site.”

Health systems must clearly communicate their expectations to vendors for both the system migration phase and for the term of the contract. Those managing a migration to a cloud environment also must communicate well to stakeholders and users, and ensure proper training.

Both the client and the vendor must plan to ensure maximum safety of information.

The adoption of cloud computing in healthcare has promises for delivering efficiency in IT operations improvement. When coupled with judicious due diligence in vendor systems evaluation, planning and implementation, it can result in faster delivery of quality IT services and improved patient care.

Shubho Chatterjee is chief information officer of Miami (Fla.) Jewish Health Systems.



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