Every time Carolinas HealthCare System gets rid of server or storage hardware, someone in the IT department takes out a roll of red tape. They cut off two pieces and lay those down on the floor in the shape of an X, as in: Do not put any new hardware here.

"I used to be so proud of my datacenter," Carolinas Chief Information and Analytics Officer Craig Richardville said. "Now I just can't wait to get rid of my datacenter."

Other healthcare executives are of a similar mind. Count Beth Israel Deaconess Medical Center CIO John Halamka, MD, among those.

"I predict that five years from now none of us will have datacenters," Halamka said. "We're going to go out to the cloud to find EHRs, clinical decision support, analytics."

Underway already

Some enterprising providers and payers, such as the Centers for Medicare and Medicaid Services and Children's Mercy in Kansas City, are already reaping big dividends from hosting data and services in the cloud.

The Centers for Medicare & Medicaid Services, for instance, created a cloud-based analytics platform that eliminated $5 million in underutilized infrastructure spending, said Jessica Kahn, director of the data and systems group at CMS.

And Children's Mercy uses Microsoft's Azure Cloud services to host an app and data that literally save lives of at-risk pediatric patients by tracking them after they leave the hospital, according to Richard Stroup, Children's Mercy director of informatics.

What's more, Stroup explained that putting the app on Microsoft's cloud also enabled it to make the service available to other Children's hospitals. Seattle Children's was the first to tap into it, and Cincinnati Children's signed on to use it in February.

History repeating itself

The notion of a widespread migration to the cloud is not entirely new. Nicholas Carr wrote a 2003 Harvard Business Review article titled "IT Doesn't Matter," in fact, that sent a virtual shock wave through the enterprise technology realm — though few in healthcare probably felt it back then — by suggesting that IT is going to be commoditized.

"IT is best seen as the latest in a series of broadly adopted technologies that have reshaped industry over the past two centuries — from the steam engine and the railroad to the telegraph and the telephone to the electric generator and the internal combustion engine. For a brief period, as they were being built into the infrastructure of commerce, all these technologies opened opportunities for forward-looking companies to gain real advantages," Carr wrote at the time. "But as their availability increased and their cost decreased — as they became ubiquitous — they became commodity inputs. From a strategic standpoint, they became invisible; they no longer mattered."

Think: power. Whereas companies of various sorts used to frequently build facilities next to a river so they could harness power, they eventually realized it was not a core competency and, as such, outsourced that function as utilities emerged that could generate power for many customers.

Today one would be hard-pressed to find a fistful of companies that consider generating their own power a competitive advantage — some hospital systems, rather, are harnessing cloud infrastructure services to innovate in ways they could not if they needed to build or buy adequate storage and compute power.

A similar shift is underway in healthcare, said James Lawson, chief solutions officer at Verge Health, a risk management vendor.

"Several years ago it was 'you're crazy if you think we'll put patient data in the cloud,'" Lawson said. "Today, it's 'you're crazy if you think you're going to put patient data in my servers.'"

And while Lawson said a wholesale shift to the cloud may take longer than five years, he explained that once the move gains steam, inert hospitals risk falling behind technologically.

"When you're the last man standing with a datacenter, and your competitors are using that capital to generate revenue, the upside of moving to the cloud will become crystal clear," Lawson added.

Datacenter of the future

Carr's assertion that technology no longer really matters has not exactly rung true yet, but the industry is poised for a seismic shift in its thinking about putting health data in the cloud.

Carolinas' CIAO Richardville said the system is making big movements into the cloud, and that includes Cerner, Epic, Microsoft 365, among many other apps.

BIDMC's Halamka, meanwhile, explained that healthcare organizations at this point have to plan for a federated approach, even those that are moving to a single EHR.

And Children's Mercy's Stroup offered an amusing prediction of his own.

"The onsite datacenter of the future will have only two employees: a man and a dog," Stroup said. "The man will be there to feed the dog; the dog will be there to guard against the man messing with the datacenter."

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Email the writer: tom.sullivan@himssmedia.com