The Shift to the Public Cloud
Analyst: Lynne Dunbrack
The healthcare industry is facing unprecedented changes brought about by a shift from fee-for-service to value-based healthcare delivery and reimbursement models. New care delivery and reimbursement models are rapidly evolving to address the global objectives to reduce costs, improve quality of care, and improve patient and clinician satisfaction. Legacy infrastructure simply cannot keep up with the pace of change. Forward thinking healthcare organizations are modernizing their infrastructure by accelerating their adoption of 3rd Platform technologies which will play a vital role in healthcare’s digital transformation.
More than 60% of healthcare providers increased their IT budgets to replace outdated technology.
Public cloud and hybrid IT infrastructure offer healthcare organizations a way to deploy, manage, and refresh IT with an eye to increasing operational efficiencies and reducing costs. Historically, healthcare organizations were more inclined to use private clouds over public clouds because of security concerns. In the last several years, there has been a steady increase in the adoption rates of public clouds with adoption rates nearly on par: 76.6% and 79.5% of providers reported using some form of a public cloud and private cloud respectively.
In what is a security paradox, healthcare organizations say that cloud providers offer better security than their own IT departments, yet have concerns about cloud security. Furthermore, improved security is just one of the benefits that healthcare organizations cite as among the top benefits of the public cloud.
The journey to the cloud and digital transformation is an iterative one. The easiest public cloud model for healthcare organizations to adopt first is SaaS-based operational and financial applications that do not include health information that is governed by regulations such as HIPAA in the United States and GDPR in Europe.
As healthcare organizations gain expertise in public cloud services, they will deploy PaaS that enables them to build out a platform for connecting enterprisewide applications, integrating data, and applying data analytics. Forward thinking healthcare organizations will look to IaaS models to create a hosting environment that enables them to monetize their industry clouds by offering cloud-based services to other healthcare organizations.