This content is part of the Essential Guide: Conference guide: News and analysis from HIMSS 2014
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CIOs: Thinking about getting out of the healthcare data center business?

Last year, CommonWell Health Alliance made its debut. Will new interoperability gains make healthcare data centers a thing of the past?

After you've been walking HIMSS 2014 exhibit hall all day, invariably your tired feet will steer you into one of several huge, lavish booths of a major EHR vendor. You know the ones. They have the three-inch padding under the luxuriously soft, deep-pile carpet that feels like heaven after walking on thinly covered convention center concrete all day. Or more precisely, it feels like a cloud.

Something you know about those vendors: It costs their largest customers nine and ten figures to install their software and countless more capital investments to supersize healthcare data centers to host them (never mind what the maintenance and upgrade paths will cost down the road). Oddly, considering the carpet, for these vendors the cloud isn't a serious part of the game right now.

Sounded like a dinosaur partying while the glacier's slowly rolling in from the north. No quantity of mouse pad and latté giveaways at the booth will save them.

Something you may also know, but may not yet have come to grips with: The costs of maintaining your network infrastructure and data center will likely soon outstrip your organization's ability to meet them. It's time to start investigating the right cloud vendors and make an orderly transition to move your network into someone else's data center.

Ignore this at your own peril: In the course of putting together our recent series on health IT outsourcing, one large cloud vendor confided -- not for attribution -- that its sales staff skips healthcare provider chief information officers (CIOs) and pitches straight to chief financial officers. This vendor passes over the data center custodian, instead outlining financial gains to be made by outsourcing health IT infrastructure or software to the executive holding the purse strings. This vendor feels that healthcare CIOs are so set in traditional IT values that include a distrust of anyone's cloud other than their own. Forced to bet, I'd wager this isn't the only cloud vendor using this approach.

Despite the old ways, it's slowly dawning on some CIOs that the best idea would be to get out of the data center business altogether. They are recasting their staff as data scientists and data governance enforcers, working with clinical informaticists to create more efficient workflows, and calculating measurable care metrics. This is the emerging role of health IT staff. Many small and medium-sized hospitals, I think, are going to go this way -- soon, if they haven't already.

The richest EHR vendors, in terms of revenue, are rich mainly because their customers host systems in their own data centers. For the record, most of those big vendors do host EHRs and other ancillary systems like practice management and other back-office systems, but don't they look like cute little boutique products? You know, kind of like the little tinted box in the corner of a steakhouse menu housing the gluten-free or vegan choices.

If they were smart, these market leaders would divert capital from their HIMSS promotions, pump up their own hosted clouds and offer an orderly migration path for large customers now facing healthcare data center bloat. Or maybe they should start acquiring the best cloud vendors innovating physician and hospital workflows and make them a priority.

This isn't happening yet, but it's something to watch at HIMSS. I think back to last year's HIMSS announcement of the CommonWell Health Alliance, when McKesson Corp. CEO John Hammergren shared the stage with his counterparts from four other EHR vendors. At various points, Hammergren was dismissive of health IT in the cloud.

When asked whether CommonWell's health data interoperability initiatives would change how its participants would compete against each other, Hammergren did talk a good game about "opening closed systems" and "helping move the country forward" by "working across boundaries and settings of care." But after that uplifting sentiment, Hammergren revealed what was really on his mind: "As an investor, I don't see any material difference in the trajectory we're going to take, from a success perspective ... but this is a very bold step forward."

CommonWell and the road to interoperability

Cerner-McKesson deal a step toward national HIE

Epic CEO talks CommonWell and interoperability

Data interoperability problems could be fixed

Meaningful use stage 2 sets interoperability standards

Sounded like a dinosaur partying while the glacier's slowly rolling in from the north. No quantity of mouse pad and latté giveaways at the booth could have saved them, either.


For the record, we're hoping CommonWell can achieve the well-meaning interoperability ambitions it set out to accomplish: patient matching across disparate vendor systems and managing patient data permissions. U.S. healthcare can only benefit from the group's success.

Daily we talk to healthcare provider CIOs and the directors, managers and systems administrators who report to them. We sympathize with the trials and tribulations that come with shrinking budgets at the exact time they should be doubling: Federally fueled health IT expansion demands more infrastructure and data warehousing, now. CMS ties clinical data to reimbursement schemes such as the value-based purchasing program for hospitals, physician quality reporting and accountable care. Commercial insurers are coming up with their own versions of these ideas, too.

Here's the thing about outsourcing IT when data center needs grow past an organization's ability or desire to finance them, at least for some providers: IT staffers aren't necessarily outsourcing their own jobs; they just create time they don't have now to devote to basic things. They are keeping your vendors true to their contracts; keeping everyone's phone, tablet and computer running; keeping the network locked down, and enforcing things like encryption policies even when they're not particularly popular among the rank and file of clinicians. Just a few years ago, outsourcing to cloud vendors seemed a big risk to healthcare CIOs, but we've hit this point where they're suddenly looking more attractive.

Outsourcing doesn't mean downsizing in many cases, it just means transferring risks to outside parties, along with the costs of scaling up as physicians join a group, hospital or health system. It also means trusting a cloud vendor, a hard thing for some healthcare organizations to do. Thankfully, new HIPAA business associate agreements come into play here. If a vendor isn't trustworthy, it will have to answer not just to you and your patients, but the feds, too.

For the time being, larger, richer health systems may be able to afford to hold on to or even expand their data centers to keep hosting multi-hundred-million-dollar software installations from those huge vendors that have the most lavish HIMSS booths. You, of course, are smart enough to see this coming from a long ways off. Grill those vendors at HIMSS 2014, and at least start imagining how a cloud migration might work for you. After all, chances are a cloud vendor is already pitching that idea to your chief financial officer anyway.

Let us know what you think about the story; email Don Fluckinger, news director or contact @DonFluckinger on Twitter.

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