Hospitals Will Need to Do More Than Transition to the Cloud if They Want to Cut Costs
Hospitals are supporting their massive data-based initiatives like population health and data analytics by moving resources to the cloud — but the cloud alone won’t be enough to guarantee real savings.
For hospitals, the allure of digital projects like big data analytics, population health, and evidence-based medicine has become palpable, and many providers are striving to pounce on these opportunities in the hopes of cutting costs and improving performance. Hospital IT professionals are also realizing that in-house data centers no longer provide enough power to support these enormous projects, and are migragrating select data and applications to the cloud for a boost in cost-efficiency.
But along with the flexibility and agility of the cloud comes a number of risks — for example, elastic environments can introduce new costs that are greater than the ones they eliminate, which means that hospitals will have to keep their cloud resources in clear view. In other words, without a solid performance management strategy in place, hospitals may not actually see every benefit that digital initiatives seem to promise.
Entering the Digital Game
The cloud has become too appealing for hospitals to ignore — according to a recent TechTarget survey, nearly 83% plan to increase their cloud spend in 2016. For many such providers, it’s a sink-or-swim moment to catch up with the pace of digital change. The cloud provides the readymade scalability that hospitals need to launch digital services and analytics projects.
But in an era of constant cyber attacks and complicated federal compliance standards, hospitals are wary of the dangers associated with the cloud. As such, they “are taking migration at a careful and calculated pace,” Manu Tandon, CIO of Boston’s Beth Israel hospital, told TechTarget. That hospital has decided to leave many mission-critical functions in the physical data center, at least for now. Still, they recognize the power of adding capacity and storage without the need for hardware maintenance, and plan to eventually ship most of their services to Amazon’s AWS once they create a safe framework for hosting sensitive data.
Of course, the ability to rapidly analyze the data of individual patients or entire patient populations will be invaluable for physicians and clinical researchers. But in order for hospitals to utilize the cloud-based applications that would enable such abilities in a cost-efficient way, they need to focus on performance management.
Caution and Calculation
Before migrating apps to the cloud, hospitals should understand that the cloud doesn’t always guarantee cost reductions. In fact, many applications that appear to perform well in the cloud actually hemorrhage resources and drive up costs.
For instance, an application may only show fast responses time because the cloud is feeding it more power than it has any right to use. At other times, the cloud may automatically shuffle an underperforming virtual machine around your mainframe to try to balance the load, obscuring a costly problem.
To catch these issues before they balloon into larger problems, hospitals need a performance management view that accounts for resource usage and, therefore, costs. Even if physicians innovate ways to provide better care at reduced costs, the financial benefit will be diminished if IT isn’t running as tight an operation as possible. There’s no question that the cloud poses a significant challenge for hospitals, but it’s a challenge that holds profound opportunity for those of them that take the right approach.
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