Part 1 of 2: Why cloud for the healthcare industry?
In traditional, incumbent healthcare organizations, cloud is generally viewed as a tactical approach to help reduce compute costs. Sure, cost reduction is a major benefit of moving to the cloud. But there is more urgency out there than just cutting costs. As the industry is disrupted and as Internet natives like Amazon, Google/Alphabet and even Uber and Lyft nip at the heels of healthcare incumbents, cloud needs to be seen as a driver of innovation—innovation that can propel competitive advantage. (In a recent New York Times article, a business professor is quoted as saying, “Pharmacies, drug wholesalers and benefit managers are trembling at the prospect of competing with Amazon.”)
One imperative is to move toward a more collaborative, patient-centric ecosystem. What we call “external integration” is beginning to take hold in the healthcare market. Traditional care delivery models are morphing into on-demand, virtual marketplaces between patients and caregivers—more often from the patients’ homes. Remote clinical technologies and data aggregation platforms are blurring the lines between medical devices and consumer wearables. Readily available cognitive engines are helping to accelerate disruption opportunities for existing players and new entrants. New forms of automation and intelligence are driving efficiencies that were previously unattainable.
At the heart of these developments? Cloud technologies.
Innovation in the public cloud
More specifically, I mean public cloud (or a hybrid of public/private) because that’s where most innovation is really happening these days. At Accenture, for example, we are 71 percent in the public cloud and more than 90 percent of all newly provisioned environments are being provisioned directly in the cloud.
By 2021, it is estimated that public cloud service providers will process more than 35 percent of healthcare providers’ IT workloads. (Source: Gartner-Market Guide for Cloud Service Providers to Healthcare Delivery Organizations, November 16, 2016.)
Sure, there’s pushback on public cloud. Many healthcare incumbents see public cloud as more complex (sometimes true) and less secure (not true – the cloud is at least as secure as most on-premise platforms). And effective cloud security services can satisfy industry and regulatory requirements while helping a company achieve its business goals.
Many incumbents ask, “What capabilities should I allow my organization to migrate or build on public cloud, and how do we control public cloud usage?” I think the more important question is, “How are we going to operate and ultimately compete if we are not leveraging public cloud in a material way?”
A new role for the CIO
Speaking bluntly, IT is usually not perceived as the source of innovation in most healthcare organizations today. That must change. Going forward, the function of IT—and the role of the CIO—needs to move beyond simply developing and maintaining the applications that support the business. Tomorrow’s IT leadership (actually, TODAY’s IT leadership) need to be navigating a number of rapidly evolving technologies—especially cloud—and defining how those technologies could transform the organization’s business model and strategy.
In part 2 of this blog, I’ll talk more practically about how to get started with the cloud—or, for healthcare companies already on the cloud journey, how to speed down the road to value.
If you’d like to read our full point of view on this topic, click here.