The Cloud’s Foggy Path in Healthcare

Many hospitals experiencing electronic patient data growth can gain enormous benefits from cloud technology, which creates data storage efficiencies and can provide an alternative to costly storage infrastructure systems.

However, a recently released study from the health research firm KLAS, “Path to Cloud Computing Foggy: Perception Study,” reveals that hospitals are hesitant to adopt cloud computing, primarily because of skepticism about data security.

Without a doubt, data at these organizations is growing exponentially as a result of the national movement toward transferring things such as lab results and medication lists from paper-based charts to electronic health records (EHRs). Other contributing factors include medical images such as CT scans and X-rays.

One would think this trend would cause health IT managers to rush to engage cloud computing vendors like {complink 1131|Cisco Systems Inc.}, {complink 1544|Dell Inc.}, and {complink 2470|IBM Corp.}, all of which have invested heavily in the technology and have targeted hospitals and other healthcare organizations. However, KLAS, which interviewed 97 hospital CIOs and other executives, found that hospitals have stayed away from using cloud computing for their core EHR, patient accounting, and enterprise resource planning (ERP) applications. They are testing noncritical applications such as email on the cloud before sending any other data there.

One of the reasons hospitals have stayed away from the technology is increasing concerns with privacy and the ability to control patient data in a cloud environment. The study also found that providers are hesitant to put mission-critical applications on public clouds offered by companies like {complink 11480| Inc.} and {complink 2294|Google}.

One CIO of a hospital with more than 1,000 beds put it this way:

I don’t know that there are a ton of major healthcare providers putting their patient data in the cloud right now. From a liability perspective, it isn't as mature as some other industries.

Undoubtedly, privacy and security are key considerations. Healthcare organizations want to make sure cloud computing allows them to meet their obligations under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), which requires hospitals to ensure they are protecting the privacy and security of patients' medical information.

Fines for violating HIPAA privacy rules can be hefty. Last year, the UCLA Health System agreed to pay $865,500 to settle potential violations. An investigation alleged that UCLA Health System employees violated privacy rules by looking up information on celebrity patients, including Tom Cruise and Farrah Fawcett.

The study does hold some hope for cloud vendors, but it seems they’ll have to work harder to garner the support of healthcare customers. KLAS said most respondents understand the benefits of cloud computing but are still concerned about the risks:

Fifty-eight percent of respondents indicated interest in using cloud technology for their organizations. However, only 35% of those who expressed interest said they plan to do so in the next two years, reflecting many providers' feelings about the immaturity and riskiness of cloud technology in the healthcare space.
Sixty percent of respondents perceived that cost savings would be the greatest benefit of cloud computing, particularly because they would avoid additional onsite storage and network infrastructure costs, including the ongoing maintenance costs, labor costs, and hardware costs. In addition, several expressed the belief that they have received or would receive better disaster recovery and business continuity services by using cloud technology.

Given these findings, Erik Westerlind, the study's author, shared these thoughts on how OEMs should approach hospital customers:

Vendors will first have to address health IT managers' concerns around security and HIPPA compliance. If they can do that, it will work well in their favor as they are negotiating and working with healthcare organizations and providers because that is a major concern.

The study found other roadblocks that vendors must address. IT executives, especially at large hospitals, said the cost of cloud computing was a barrier, since they could develop the same technology internally for the same money or less. Other executives said that they would not put applications in a cloud environment that requires high availability and connectivity.

According to Westerlind, one area where vendors might gain traction is with small physician practices that have limited budgets and are willing to connect patient data with parent health organizations' private cloud technology. For now, though, cloud computing is still in the early stages of adoption at hospitals and small physician practices. Hopefully, vendors will find a way to change this trend, but it will take time to build confidence among health IT managers.

22 comments on “The Cloud’s Foggy Path in Healthcare

  1. Barbara Jorgensen
    January 12, 2012

    Lots of good information here. I'm not surprised the healthcare industry isn't jumping on the cloud. My impression is the industry has been slow to even adopt paperless charts/records and intake/checkout information. The reason isn't unwillingness, it's IT systems within the organizations aren't compatible. In the US, HIPA requirements probably haven't helped concerns about security. But it's possible the cloud can help overcome some of those system limitations or at least provide a solution. (I'm not as cloud-literate as I should be, but I believe that's one of the cloud's selling points.)

  2. The Source
    January 12, 2012

    Dear Barbara,

    Over the last four years many physicians have adopted  electronic health records. Here's a few statistics for you. According to recent numbers from the Centers for Disease Control and Prevention (CDC), between 2008 and 2011, the percentage of physicians who adopted basic electronic health records in their practice doubled from 17% to 34%, with adoption among primary care doctors nearly doubling during this period from 20% to 39%. And more than half of office-based physicians (57%) now use electronic health records (EHRs).

    That said, the KLAS study suggests there is hesitation to put patient data in the cloud.  When you think about the sensitivity of a patient's medical data which often  includes personal identifiable information, and when you consider the penalties of violating HIPAA regulations, there is a genuine concern about the security and privacy of patient data. 

    It will be interesting to see over the next few years if hospitals increase their use of cloud computing, but for now, at least according to this report, health IT managers are taking a wait and see attitude. 

    Thanks for reading my article, and for sharing your thoughts.


  3. AdityaJayaram
    January 13, 2012

    Interesting article on adoption of the cloud in healthcare .Cloud can help healthcare providers and personnel with rapid deployment of services and scalability .Just watched  an informative video presentation on cloud computing,Technology benefits , providing insight into cost savings and strategies for adoption@@

  4. Daniel
    January 13, 2012

    Nicole as of now, cloud is using in health care sector only for data storage. I mean something like online data storage similar to Google Doc and hotmail SkyDrive. That means they are not using the full potential of the technology. So along with that, they have to implement the other software utilization facilities like hospital management, online billing system, fixing appointment or consultation with doctor etc.

  5. t.alex
    January 13, 2012

    I remembered Google did have a project called Google Health for synchronizing patients data to the cloud. This was ambitious. The project has been discontinued sometime ago. Besides security reasons, goverments are ot really interested, aren't they?

  6. Barbara Jorgensen
    January 13, 2012

    Thanks Nicole! It always helps to have data rather than anecdotes. I have several friends in nursing, and of course, my own healthcare network. Only one doctor–my son's–electronically sends prescriptions to the pharmacy. Not a scientific sampling, but we do gripe amongst ourselves sometimes…

  7. Ariella
    January 13, 2012

     But human nature being what it is, people are more moved by anecdotes than data. That the gist of the quote (mis)attributed to Stalin,  , “The death of one man is a tragedy, the death of millions is a statistic.” 

    It's corroborated by what works in marketing, which is telling a compelling story rather than merely conveying information.


    At best, the doctors I use may call in or fax a prescription. Even though they now use electronic notebooks in place of paper files, much is still done on paper, particularly the insurance forms.

  8. Clairvoyant
    January 14, 2012

    The heathcare sector does not seem interested in changing over to using cloud computing. Perhaps if other sectors start to use cloud computing more, heathcare may eventually follow.

  9. Wale Bakare
    January 15, 2012

    Health sector adopting cloud computing at early stage far too risky. Though, we cant under-estimate its commercial growth, but  there is need for more collaborative approach among the providers so as to provide very reliable security. More so, I think tackling security in this area needs more cohesion and common strategic approach especially from public & hybrid cloud providers.  

  10. Houngbo_Hospice
    January 15, 2012

    “Health sector adopting cloud computing at early stage far too risky.”

    Of course there are risks associated with any kind of technology, but cloud computing trend is irrerversible and  healthcare providers will benefit a lot if they start their gradual migration to the cloud now  instead of waiting for its maturiry before adoption. 

  11. Houngbo_Hospice
    January 15, 2012


    “The heathcare sector does not seem interested in changing over to using cloud computing”

    According to the Certification Commission for Healthcare Information Technology (CCHIT), more than 300 vendors currently offer some variance of electronic  medical records — some “in the cloud,” some locally, and some in both. We can see that the  heathcare sector is interested in cloud computing.

  12. Daniel
    January 16, 2012

    Google health has been discontinued from this January. But there are some other online websites similar to Google health, the difference is we have to pay for the storage. There are also options for online consultation with doctors.

  13. Daniel
    January 16, 2012

    I think as of now, they are limiting themselves the usage of cloud technology for online data storage and retrieval. But I think they have to come out from such constrains and explore another services, which can deploy and operate from cloud environment.

  14. Eldredge
    January 16, 2012

    As I understand it, one of the major benefits of cloud technology is to provide easy access to stored data by multiple users. The dilemma becomes how to provide the correct level of access to sensitive data by authorized users (which is a list that may be constantly changing), while preventing any unauthorized access to the same data. In today's age of constant headlines about hacked 'secure' websites, there seems to be plenty of reason for skepticism.

  15. Ariella
    January 16, 2012

    Very well put, Eldredge. Today's news includes reports that, the popular online shoe and apparel seller was hacked. That affects millions of their customers who have registered accounts that reveal their names, addresses, phone numbers, and the last few digits of their credit cards. Certainly, with all the personal information put up in one's medical records, security from hacks would be a major concern.

  16. Eldredge
    January 16, 2012

    @Ariella – I just saw the story on Zappos site being hacked. Recently there was also a report about government sites being hacked. How secure is secure enough?

    I would not be crazy about the idea of having my personal medical information on a cloud system….but would I even know that it is out there? I doubt anyone is going to ask my permission. As if I needed another reason not to see rthe doctor!

  17. Clairvoyant
    January 16, 2012

    Hospice, sure there is some amount of interest, but on an overall scale of the heathcare market, there is not enough interest at this time. This is why companies are backing out of their projects that were started for cloud computing for heathcare, and why this article is named “The Cloud's Foggy Path in Heathcare”.

  18. Susan Fourtané
    January 17, 2012


    The healthcare sector, especially in the US, has been falling behind for a long time now, not only in cloud computing but also in electronic medical records. 

    If, as you say, they would see that other sectors are quicky adopting the benefits of the cloud…maybe.


  19. Susan Fourtané
    January 17, 2012

    HH, Not as much as they should be, though. The cloud providers for healhcare are working hard in offering attractive adoption packages, though. 


  20. SunitaT
    January 17, 2012

    The heathcare sector does not seem interested in changing over to using cloud computing.

    @Clairvoyant, healthcare sector is not interested in changing over to using cloud because its worried about the security of the cloud and those concerns are geninue. I hope security concerns related to cloud are resolved at the earliest so that all the sectors can enjoy the benefits of cloud.

  21. jbond
    January 17, 2012

    Using the UCLA example as an excuse for some hospitals to not use the cloud is foolish. I understand the security issues with the cloud, and these issues are continually being worked on by top providers like IBM, Dell and Cisco. The problem with UCLA was the hospital employees. Employees went and accessed patient records to make money selling info to tabloids. Many of these employees were caught and fired, amongst other penalties. This wasn't an issue of hackers trying to steal information. A companies best protection against HIPAA violations is to limit access to their files, in fact it would be easier to view who accessed records if they were all electronic instead of paper filed in cabinets.

  22. t.alex
    January 18, 2012

    Jacob, are these services doing well?

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