The future of large-scale, complex computing will undoubtedly involve the cloud. This scenario should include healthcare but the industry will embrace cloud computing late and perhaps never (see later). Cloud computing is an area where Google has lagged in development but is now trying to catch up according to a recent article (see: Google Elbows Into the Cloud), Below is an excerpt from it:
In a battle for dominance in cloud computing, Google is taking on Microsoft and Amazon in their own back. Google said... that it was doubling its office space near Seattle, just miles from the campuses of Amazon and Microsoft, and stepping up the hiring of engineers and others who work on cloud technology. It is part of Google’s dive into a business known as cloud services — renting to other businesses access to its enormous data storage and computing power, accessible by the Internet. In cloud computing, dozens or even thousands of computer servers are joined to create a giant machine capable of handling many tasks at once, from storing data to running Web sites and mobile apps to tackling complicated analytical problems. Individual software developers, large companies and governments rent these services to run their operations often at a fraction of the cost of buying and managing their own machines. Amazon Web Services, or A.W.S., is far and away the leader in this area. Amazon expects that this business will eventually be as big as its retail operation. A.W.S. is followed by Microsoft’s Windows Azure and offerings from other companies including Rackspace, Verizon, I.B.M. and Hewlett-Packard. Google says the cloud business is a new source of profit and a way to improve the Internet by providing other companies access to its sophisticated computing services. Analysts say it is also a strategy to lure developers and businesses to use Google products instead of those of archrivals like Amazon and Microsoft. The cloud business has become so vital to these companies....because it is crucial to other businesses like mobile apps and online video and music. Most of the apps that run on Google Android phones, for instance, are built using Amazon’s cloud, and Google would like to wrest back control....Amazon was the first to rent its data storage and computing power to outside customers when it started A.W.S. in 2004, and Microsoft and Google followed. Another company with huge data centers and computing power, Apple, does not rent its cloud. Amazon earned $800 million from its cloud services last year, according to analyst estimates....But to reach a broader market, Google has followed Amazon’s lead by offering a cloud platform that works with a much broader range of services....Google has the weakest corporate ties. It sells businesses cloud-based word processing, storage, and spreadsheet tools, but its operation is still much smaller than Microsoft’s.
I have always assumed that the reluctance of hospital CIOs to adopt cloud computing has been due to their innate conservatism, often citing security and confidentiality as the rationale. However, I think that there is a new factor in this equation. Most hospitals are now pursuing an IT strategy called the enterprise-wide-solution (EWS). This involves working primarily with a single vendor such as Epic or Cerner and deploying their EHR software plus their ancillary products such as their LIS and RIS. From the vantage point of the hospital CIOs, one of the major advantages of such an approach is that the software is integrated from the start. In other words, there is no burden on the CIO to integrate a series of modules from different vendors. By way of contrast and if multiple best-of-breed software systems are selected, there is an increased burden on the CIO to ensure that they interoperate.
There are only a handful of EWS vendors that offer an EWS. Epic, for example, now exercises what is looking like a near-monoply on EHR software in larger hospitals (see: Does Epic Exercise a Near-Monoply for EMRs in Larger U.S. Hospitals?; The Feasibility of Using the Epic EMR as a "Platform" to Extend Its Functionality; The Cost of Deploying an Epic EMR and the "Oreo Cookie" Analogy). Hospital executives would thus would need to seek the approval of a vendor like Epic or Cerner in order to pursue a cloud strategy. There is no possible advantage for these vendors in bringing a third party cloud computing vendor into their relationship with hospitals. If they were to offer a "remote hosting option," they themselves would provide it (Comments about Cerner's Remote Hospital Option (RHO)). This would allow them to keep their high profit margins and still maintain client control. Put another way, part of the appeal of cloud computing for hospitals would be its flexibility and lower cost. This is currently a sellers' market for EHR vendors with little need to offer any price advantage to the queued-up hospital customers.
In my opinion, long-term strategy and information technology go hand-in-hand. In an information-rich industry like healthcare, you can't change business practices without major shifts in your IT. In the case of healthcare, this means that much of the hospital long-term strategy is being developed and managed in Kansas City and Verona (see: CIOs and Central IT Departments Have Become Increasingly Less Useful; Some Hospitals Can't Get Past the Final Epic Deployment Step: the "Judy Check"). Lower cost, flexible cloud computing provided by third parties like Google and Amazon is simply not in the cards for hospitals.