The U.S. healthcare industry is amidst one of the biggest transformations any industry has seen since the dot-com boom of the late 1990s. This massive change is being stimulated by federal mandates, technological innovation and the need to improve clinical outcomes and communication between providers, patients and payers.
An aging population, increase in chronic diseases, lower reimbursement rates and a shift to value-based payments — plus the COVID-19 pandemic — have added pressure and highlighted the need for new technology to enhance virtual and value-based care.
Improving medical outcomes now requires processing massive amounts of healthcare data, and the cloud plays a pivotal role in meeting the current needs of healthcare organizations.
Challenges in healthcare
Most of today’s healthcare challenges fall into two broad categories: rapidly rising costs and an increased burden on resources. Rising costs — and the resulting inadequacy of healthcare resources — can stem from:
An aging population: As people age and live longer, healthcare gets more expensive. As medicine improves, people aged 65 and above are expected to account for 20% of the U.S. population by 2030, per the U.S. Census Bureau. And as older people spend more on healthcare, an aging population is expected to contribute to increasing healthcare costs over time.
Prevalence of chronic illnesses: According to a National Center for Biotechnology Information report, chronic disease treatment makes up 85% of healthcare costs, and more than half of all Americans have a chronic illness (diabetes, high blood pressure, depression, lower back and neck pain, etc.)
Higher ambulatory costs: The cost of ambulatory care, including outpatient hospital services and emergency room care, increased the most of all treatment categories covered in a 2017 study in the Journal of the American Medical Association.
Rising healthcare premiums, out-of-pocket costs, and Medicare and Medicaid: Healthcare premiums rose by an estimated 54% between 2009 and 2019. The COVID-19 pandemic has spurred enrollment into government programs like Medicaid and Medicare, which has increased the overall demand for medical services, contributing to rising costs. A 2021 IRS report highlighted that a shift to high-deductible health plans — with out-of-pocket costs of up to $14,000 per family — has also increased the cost of healthcare.
Delayed care and surgeries due to COVID-19: A poll by the Kaiser Family Foundation (KFF) in May 2020 indicated that up to 48% people have avoided or postponed medical care due to concerns about the COVID-19 pandemic. About 11% of those people reported that their medical condition worsened after skipping or postponing care. Non-emergency surgeries were frequently postponed, as resources were set aside for COVID-19 patients. These delays make treatable conditions more costly and increase overall costs.
A lack of pricing transparency: Without transparency, it’s difficult to know the actual cost of healthcare. The fragmented data landscape fails to capture complete details and complex medical bills, and does not give patients a complete view of payments.
Digital transformation across the system can help healthcare organizations connect and aggregate data from disparate sources to support a healthcare intelligence layer.
The need to modernize
To mitigate the impact of increased costs and inadequate resources, healthcare organizations need to replace legacy IT programs and adopt modern systems designed to support rapid innovation for site-agnostic, collaborative, whole-person care — all while being affordable and accessible.
According to the Centers for Medicare and Medicaid Services’ National Health Expenditure Projections (2019–28), U.S. healthcare spending is projected to reach $6.2 trillion by 2028. Now is the time to implement digital strategies to achieve cost savings and enhance medical and financial outcomes. However, this requires processing a large amount of healthcare data.
According to a survey by the Office of the National Coordinator for Health Information Technology in 2017, more than 96% of U.S. hospitals and 86% of physician groups use electronic health record (EHR) technology as mandated by the Health Information Technology for Economic and Clinical Health Act of 2009. According to a World Economic Forum report in 2018, EHRs were expected to generate approximately 2,300 exabytes of healthcare data across the world by 2020.
However, this data is trapped in electronic silos, resulting in fragmented patient profiles, redundant IT costs and incomplete point-of-care insights that lead to care gaps.
One solution to this is a digital transformation powered by a health cloud platform. Digital transformation across the system can help healthcare organizations connect and aggregate data from disparate sources to support a healthcare intelligence layer.
The concept of health cloud
A health cloud unifies member data across systems and care settings, and empowers healthcare organizations to rapidly develop scalable and modern applications that unlock the power of data to improve clinical, operational and financial outcomes. It helps organizations build new digital services and solutions with native interoperability.
The health cloud can also provide platform-as-a-service (PaaS) solutions, software-as-a-service (SaaS) applications and function-as-a-service (FaaS) capabilities.
Health clouds are different from horizontal clouds. Horizontal clouds provide baseline functionality and capabilities for certain business or clinical processes like sales and services, revenue cycle management or incident tracking. Cloud platforms can help organizations manage, store and access data, but horizontal clouds can’t unify healthcare data.
Vertical clouds offer an elegant solution. They sit on top of horizontal clouds and offer a suite of computing services optimized for use in a particular industry. Vertical markets may have more niche IT requirements for security and compliance, and they can use vertical clouds to meet these unique requirements.
Vertical health clouds, therefore, offer services that ensure data privacy in accordance with HIPAA (Health Insurance Portability and Accountability Act) and may offer features for electronic medical records.
Key health cloud capabilities
Scalability, adaptability and agility
The health cloud provides FaaS, empowering healthcare organizations to develop scalable and modern applications. The cloud allows for interoperability with a wide range of 3P tools, services and applications, and can adapt to multiple healthcare industry segments.
Transparency
Adopting the APIs in detail results in transparency between organizations. With true transparency of metrics, organizations can negotiate value-based performance incentives, and exchange information more efficiently.
Privacy and security
Cloud-based architectures must maintain the security of protected health information. When providers and payers work together, bulk data exchange is insecure and most data is not relevant. APIs can support data exchange that is encrypted, access-controlled and secure.
Patient data access
When patients go from one care center to another, their history doesn’t always follow them. Analytics and data shops spend a lot of time looking for patient data instead of using this information to draw valuable insights to improve care. However, with a health cloud, data can be easily accessed and shared between organizations.
Cost-efficiency
With a health cloud, organizations only need to pay for the resources they use. They can leverage economies of scale and shift the capital expenditure associated with the hardware, on-site server and other computing infrastructure costs to operational expenditure. Serverless processes can easily be deployed to increase cost-efficiency and scaled horizontally or vertically as needed.
Operational efficiency
Since IT maintenance tasks are offshored to the cloud vendor, healthcare organizations can focus on core business goals. On the cloud, healthcare organizations also become more responsive to changing needs such as regulation, reporting requirements, payment terms, contracting, and new technologies, and are better positioned to anticipate and meet future demands.
Amid the COVID-19 pandemic and subsequent industrywide digital transformation, healthcare leaders have started to use health technologies and health clouds to accelerate innovation. Digital front doors, telehealth and virtual care systems as well as other digital epidemiology tools have become more common because they have increased accessibility and mitigated fears of visiting care centers during the pandemic.
The COVID-19 pandemic has certainly provided an impetus to accelerate digital transformation and innovate healthcare with the use of cloud-based services. The imperative, however, is on the digital health community to utilize these solutions and improve health outcomes in a bright future of digitally powered healthcare.