Guest Column | November 28, 2016

2017 Will Be The Year Of The Cloud In Healthcare

Healthcare In The Cloud

By Brad Bostic,

Healthcare has experienced profound change over the past several years, with 2017 promising more of the same. While many recent changes, such as the mandatory adoption of EHRs, have been driven by federal policy, next year’s changes will be driven by the need to deliver outstanding service to healthcare consumers while keeping costs in check.

Three significant healthcare trends will play out in 2017, all of which require healthcare organizations to transform their abundant data assets into comprehensive customer profiles enabling them to treat every consumer like an important customer.

Acceleration In The Rise Of Consumerism

As people shift to high deductible health plans with health savings accounts, they become discriminating healthcare consumers. No longer willing to accept the status quo, they expect the checks they are writing to translate into high quality care and excellent service. This trend will perpetuate as the cost of healthcare continues to explode.

A 2015 Kaiser Family Foundation survey of employer health benefits found the average annual out-of-pocket costs per patient rose almost 230 percent between 2006 and 2015, while employee deductibles increased 67 percent, significantly outpacing the average increase in employees’ wages.

When considering where to spend their healthcare dollar, the new healthcare consumer is considering the excellent service they receive from companies such as Amazon and demanding the same from healthcare. The heightened expectations brought about by Amazon relates to efficiency and cost as well. Incredibly, Amazon serves 1,583 consumers per employee annually at a cost of $126 per customer, compared to just 26 consumers per employee served in healthcare per year at a cost of $9,433 per customer.

Of course, healthcare is much more complicated than e-commerce in many ways. However, the disparity in service level, efficiency, and cost is too vast to be ignored and cannot be simply explained away on the basis of complexity. Healthcare shares much in common with the complex coordination involved with managing multiple vendor and partner relationships to deliver a seamless customer experience. Simply stated, healthcare organizations must begin to act more like Amazon if they are to succeed moving forward.

The key to Amazon’s success is its ability to continuously construct, organize, and enrich customer profiles that lead to personalized engagement and tailored service for each and every customer. Amazon intelligently captures and organizes customer data to make us all feel like we are VIPs. Amazon keeps track of preferences, past purchases, forms of payment, and much more to engage you with the right information at the right time, night and day. It’s inevitable that successful healthcare organizations will redesign their approach to emulate Amazon’s while those with uninspired leadership will begin resembling dinosaurs that will eventually become extinct, following the ill-fated path of the now defunct Borders Bookstores.

Bundled Payments Will Cover More Care Episodes

Success with the Comprehensive Care for Joint Replacement (CJR) initiative resulted in the Centers for Medicare & Medicaid Services (CMS) proposing a bundled payment system for heart attack treatment and bypass surgery, which launches in July 2017. The proposed rule also expands the existing CJR model by adding hip and femur fractures.

The cardiac proposal is a tipping point in the movement from fee-for-service to a value-based reimbursement model. Under this model, providers are compensated based on the quality of outcomes and customer satisfaction ratings based on patient feedback rather than merely being paid for the volume of procedures performed.

Bundled payments appear to be working. According to a study published online in JAMA, Medicare payments declined more for lower extremity joint replacement episodes provided in bundled care-participating hospitals than for those provided in comparison hospitals, without a significant change in the quality of outcomes. Mean Medicare payments for the hospitalization and 90-day post discharge period declined by $3,286 per episode.

CMS also noted it will unveil a new voluntary bundling program for 2018, which will ask for expansive feedback (including comments on physician-led bundles). Since commercial payers tend to follow the lead of CMS, bundled payment models are expected to spread rapidly.

Bundled payments force healthcare providers across multiple care settings to track and manage patient information in a holistic manner. To achieve comprehensive patient management, previously siloed data stored in multiple EMRs and billing systems must be unified into comprehensive patient and provider profiles covering the entire episode of care. Through a well-designed and executed plan for organizing patient information, healthcare organizations can drive the action and accountability required to succeed in the bundled payment paradigm.

Cloud Adoption Will Become Mainstream

The volume of healthcare data that must be stored and analyzed is expanding exponentially. According to a study by EMC, healthcare represents a significant percentage of the overall digital universe and is growing at a clip of 48 percent each year. Several key developments fueling this expansion are the use of Electronic Medical Records, development of advanced diagnostics including molecular and genomic testing, and digital imaging. Policy initiatives such as 21st Century Cures also promote the use of patient data to advance the discovery and delivery of preventative cures and treatments.

Providers can now take advantage of secure cloud technology to manage and analyze this data. Even more importantly, cloud solutions have the compute power and user-specific access capabilities required to transform this endless stream of data into insights that drive action, accountability, and value.

According to QTS Data Centers, 80 percent of healthcare data will pass through the cloud by 2020 as healthcare organizations benefit from the cloud’s lower cost of ownership, increased security, disaster assistance, and ease of upgrading. Healthcare specific software providers that have developed specialized solutions to harness the power of the cloud will continue to drive innovation. An increasing number of innovative healthcare cloud solutions make it possible to gain near immediate value by unifying various disparate data stores to offer a live view into the key areas that require attention to succeed in a value-based care environment.

Summary Of Key 2017 Healthcare Trends

In 2017, healthcare consumers will continue to demand better service and higher quality for their healthcare dollar. Additionally, following the success of the CJR initiative, CMS will push forward with the aggressive expansion of the bundled payment program to cover additional episodes of care. Finally, healthcare executives and their leadership teams will increasingly turn to the cloud to capture and organize data in order to drive action and accountability. While the demands facing healthcare organizations are daunting, by effectively leveraging innovative cloud solutions, healthcare organizations stand to win big by harnessing the power of data to personalize the way they serve healthcare consumers.

About The Author

Brad Bostic is founder and CEO of, inventor of the world's leading healthcare relationship management platform.