Health Clouds: The Future of Healthcare Innovation

The Transformation of U.S. Healthcare

The American healthcare sector is currently experiencing a period of substantial evolution, comparable in scale to the impact of the dot-com surge in the late 1990s.

This significant shift is being driven by federal regulations, advancements in technology, and a critical demand for enhanced clinical results alongside improved communication among healthcare providers, patients, and insurance companies.

Key Drivers of Change

Several factors are converging to necessitate this transformation. An increasingly elderly demographic, a rise in the prevalence of chronic illnesses, declining reimbursement levels, and a transition towards value-based payment models are all contributing pressures.

Furthermore, the COVID-19 pandemic has served to underscore the urgency for innovative technologies that can bolster both virtual and value-based care delivery.

The Role of Data and Cloud Technology

Achieving better patient outcomes now fundamentally depends on the ability to effectively process vast quantities of healthcare data.

In this context, cloud computing is emerging as a crucial component, providing the infrastructure necessary to address the evolving requirements of healthcare organizations.

The cloud’s capabilities are pivotal in supporting the current demands for data processing and analysis within the healthcare landscape.

Healthcare's Current Obstacles

The majority of contemporary healthcare issues can be broadly classified into two main areas: escalating expenses and increasing strain on available resources. The rise in costs – and the subsequent insufficiency of healthcare provisions – can be attributed to several factors.

Factors Contributing to Rising Costs

An Expanding Elderly Demographic: As the population ages and life expectancy increases, the financial demands on healthcare systems grow. Projections from the U.S. Census Bureau suggest that individuals aged 65 and older will comprise 20% of the U.S. population by 2030. Consequently, an aging population is anticipated to contribute to the ongoing increase in healthcare expenditures.

Widespread Chronic Diseases: A report from the National Center for Biotechnology Information indicates that treating chronic conditions accounts for 85% of total healthcare spending. Furthermore, over half of all Americans currently live with a chronic illness, such as diabetes, hypertension, depression, or musculoskeletal pain.

Increased Expenses for Outpatient Services: A 2017 study published in the Journal of the American Medical Association revealed that ambulatory care costs, encompassing outpatient hospital services and emergency room visits, experienced the most significant increase among all treatment categories.

Escalating Premiums and Out-of-Pocket Expenses: Healthcare premiums saw an approximate 54% increase between 2009 and 2019. The COVID-19 pandemic has also led to greater enrollment in government-funded programs like Medicaid and Medicare, thereby elevating the overall demand for medical services and contributing to rising costs.

Impact of Recent Events

COVID-19 Related Delays in Care: A May 2020 survey conducted by the Kaiser Family Foundation (KFF) found that as many as 48% of individuals had avoided or postponed medical care due to concerns surrounding the COVID-19 pandemic. Approximately 11% of these individuals reported a worsening of their medical condition as a result of delaying treatment. Resources were prioritized for COVID-19 patients, leading to frequent postponements of non-emergency surgical procedures.

Lack of Cost Clarity: The absence of pricing transparency makes it challenging to determine the true cost of healthcare. The current fragmented data systems fail to provide comprehensive details regarding complex medical bills, hindering patients' ability to understand their payments.

Government Program Expansion: Increased participation in programs like Medicare and Medicaid, spurred by the pandemic, has heightened the demand for medical services. This increased demand subsequently contributes to the overall rise in healthcare costs.

High-Deductible Health Plans: A 2021 IRS report indicated a growing trend towards high-deductible health plans, which can result in substantial out-of-pocket expenses for families, potentially reaching up to $14,000.

The Imperative for Modernization in Healthcare

Healthcare providers are facing escalating costs and resource limitations. To counteract these challenges, a transition from outdated IT infrastructure to contemporary systems is essential. These new systems should be engineered to facilitate swift innovation, enabling care that is comprehensive, collaborative, and available regardless of location – all while remaining financially viable and readily accessible.

Projections from the Centers for Medicare and Medicaid Services indicate that U.S. healthcare expenditure will climb to $6.2 trillion by 2028. Implementing robust digital strategies is now crucial for achieving both cost reductions and improved patient outcomes, both medically and financially. This, however, necessitates the effective management of substantial volumes of healthcare data.

Data from a 2017 survey conducted by the Office of the National Coordinator for Health Information Technology reveals that over 96% of U.S. hospitals and 86% of physician practices have adopted electronic health record (EHR) technology. This adoption was largely driven by the Health Information Technology for Economic and Clinical Health Act of 2009. A 2018 report by the World Economic Forum estimated that these EHRs would generate approximately 2,300 exabytes of healthcare data globally by 2020.

Despite this vast data generation, much of this information remains isolated within separate electronic systems. This fragmentation leads to incomplete patient records, duplicated IT expenses, and a lack of comprehensive insights at the point of care, ultimately contributing to gaps in patient care.

A viable solution lies in digital transformation, driven by a robust health cloud platform. System-wide digital transformation can empower healthcare organizations to connect and consolidate data from various sources, thereby establishing a powerful healthcare intelligence layer.

Understanding the Health Cloud

A health cloud serves as a central hub, consolidating member information from various systems and care environments.

This consolidation empowers healthcare organizations to swiftly create adaptable, contemporary applications.

These applications harness the potential of data to enhance clinical efficacy, streamline operations, and improve financial performance.

The health cloud facilitates the creation of innovative digital services and solutions, built with inherent interoperability.

Capabilities of a Health Cloud Platform

Beyond data unification, a health cloud can deliver platform-as-a-service (PaaS) solutions, software-as-a-service (SaaS) applications, and function-as-a-service (FaaS) functionalities.

This comprehensive suite of services allows for flexible development and deployment of healthcare-specific tools.

Health Clouds vs. Horizontal Clouds

It’s important to distinguish health clouds from horizontal clouds.

Horizontal clouds offer fundamental functionalities for general business or clinical processes, such as sales, customer service, revenue cycle management, or incident reporting.

While cloud platforms can assist with data management, storage, and access, horizontal clouds lack the ability to unify complex healthcare data.

The Role of Vertical Clouds

Vertical clouds present a refined approach to addressing these limitations.

They are built upon horizontal clouds and provide a specialized collection of computing services tailored for a specific industry.

Vertical markets often have specialized IT needs related to security and regulatory compliance, and vertical clouds are designed to meet these unique demands.

Specific Advantages of Vertical Health Clouds

Consequently, vertical health clouds deliver services that guarantee data privacy, adhering to regulations like HIPAA (the Health Insurance Portability and Accountability Act).

Furthermore, they may incorporate features specifically designed for managing electronic medical records.

Core Capabilities of the Health Cloud

Scalability, Adaptability, and Agility

The health cloud delivers Function-as-a-Service (FaaS) capabilities, enabling healthcare organizations to build applications that are both scalable and contemporary. This cloud environment fosters interoperability with a diverse array of third-party tools, services, and applications.

Furthermore, it demonstrates adaptability across various segments within the healthcare industry.

Enhanced Transparency

Detailed implementation of APIs leads to greater transparency between healthcare entities. With clear visibility into key metrics, organizations can effectively negotiate value-based performance incentives.

This also facilitates a more streamlined exchange of information.

Robust Privacy and Security

Maintaining the security of protected health information is paramount in cloud-based systems. Traditional bulk data exchange between providers and payers often proves insecure, with much of the data being irrelevant.

APIs offer a solution by supporting data exchange that is encrypted, access-controlled, and inherently secure.

Improved Patient Data Access

Historically, a patient’s complete medical history hasn’t always been readily available when transitioning between care facilities. Consequently, analytics teams and data specialists often expend significant time locating patient data.

A health cloud resolves this issue by enabling easy access and secure sharing of data between organizations.

Cost Optimization

Organizations utilizing a health cloud benefit from a pay-as-you-go resource model. This allows them to capitalize on economies of scale.

Capital expenditures related to hardware, on-site servers, and computing infrastructure are shifted to operational expenditure, and serverless processes can be deployed for increased cost-efficiency.

Increased Operational Efficiency

By outsourcing IT maintenance to the cloud provider, healthcare organizations can concentrate on their primary objectives. The cloud also enhances responsiveness to evolving needs.

These include regulatory changes, reporting requirements, payment structures, contracting processes, and the adoption of new technologies, positioning organizations to proactively address future demands.

The COVID-19 pandemic and the resulting digital transformation have prompted healthcare leaders to embrace health technologies and health clouds to accelerate innovation.

Digital front doors, telehealth systems, virtual care solutions, and digital epidemiology tools have become increasingly prevalent, improving accessibility and reducing concerns about in-person visits.

The pandemic served as a catalyst for accelerating digital transformation and leveraging cloud-based services to innovate healthcare. The focus now is on the digital health community to harness these solutions and improve health outcomes, paving the way for a digitally empowered future of healthcare.