Cloud migration challenges are less technical and more budgetary, say health system IT execs

As healthcare becomes an increasingly data-heavy industry, health systems must weigh whether to migrate their EHRs and other software applications to the cloud and out of their own data centers.

Becker's recently asked a number of CIOs and other hospital tech executives what the biggest challenges are in shifting to the cloud.

Note: Their responses have been condensed and edited for clarity.

Chris Carmody. Chief Technology Officer and Senior Vice President of UPMC (Pittsburgh): From a technology standpoint, the biggest challenge when you adopt any new platform is training. Right now, our main focus is training current staff and teams as well as recruiting for different positions to help join our team so we can exponentially grow our abilities here.

Josh Glandorf. CIO of University of San Diego Health: Historically, it's been reluctant. There's been a substantial shift in how we trust the cloud and how it will be healthcare-ready from a protected health information standpoint.

But now, challenges remain about execution. Historically, we've had data centers that housed physical servers, and now we've started to move out of data centers and into the cloud. 

We're now asking — how do you pick and choose what will transfer to the cloud first? What's most important to be in there?

We're also facing challenges around setting up teams to ensure we have adequate support as we migrate to the cloud. Of course, there are existing resources that are doing that support, but it's not something you can do with the snap of a finger.

And lastly we're looking at a different cost model in which we have to learn how to understand that cloud infrastructure is more subscription-based and volume-based versus the capital equipment and maintenance.

Craig Kwiatkowski, PharmD. Senior Vice President of Enterprise Information Systems and CIO of Cedars-Sinai (Los Angeles): It's about control and trust. Once we're locked in with a vendor it's particularly difficult to shift back, and it risks some challenges around subscription costs being uncontrollable.

Healthcare is also still burdened with a lot of legacy systems. So we carry those legacy costs while we're trying to absorb a new cloud expense. It's not as simple as just the lift and shift to the new cloud. And we pay, from that point, only what we consume. Those costs don't offset linearly. And so it can cause some budget challenges and budget bloat during the transition.

There's still a need to maintain the data center footprint to support those legacy systems that haven't come along as quickly. We still need staff to support some of the physical systems and hardware in the data center. And so some of that doesn't scale as immediately as advertised.

On trust, while it's a good thing to no longer keep all your eggs in the same basket, bad things can also happen, like the Kronos cloud issue that happened not too long ago. And customers have zero control over the destiny of mission critical systems once they've handed everything over. And so this is something that we all need to think carefully about and pay attention to.

Beth Lindsay-Wood. Senior Vice President and CIO of City of Hope (Duarte, Calif.): You want to make sure whatever you've got is cloud-enabled, because otherwise it's going to be sitting in your data center until it becomes so or you replace it with something.

We are on a trajectory for cloud migration, but we already have major platforms that are in the cloud — they're just not in our cloud, but they're cloud-based, like the Salesforces of the world. A lot of [enterprise resource planning programs] are there already. Even our EMR is going to be cloud-enabled in the next six months to a year. So as you select new things, making sure that they're cloud-enabled is important.

But we're also moving our data center, as much as possible, all of our storage, up to the cloud. It's going to help us with our disaster recovery, business continuity as you get out of the data center and get up into the cloud, because it gives you more capability to put together a good disaster recovery program that isn't site-specific every time.

One of the changes that we're experiencing is the move from capital to operating dollars. And for some organizations, capital is easier to come by. It's amortized over a period of time. It's below the line because of depreciation. Whereas when you go to the cloud, you are only paying for what you actually use, which is not the case when you buy these big storage units that you know you've got to have capacity to grow in. But you're also paying for that out of your operations budget, above the line — it's [earnings before income, taxes, depreciation and amortization]. So as a result of that, we're seeing increases in operating costs. Clearly revenue is a key piece of that. And this isn't necessarily contributing to revenue, but it is certainly providing a lot of capabilities that you don't have in the current environment.

So it depends on your appetite. If you don't like capital and you like operating, great, that's a good way to go. And you're just biting off what you need, versus buying big machines that lose warranty and have to be replaced fairly often.

Al Smith. Senior Vice President and CIO of LifePoint Health (Brentwood, Tenn.): It's absolutely the right strategy. It's a completely the wrong financial model, at least in my world. Anything that pushes up operating expenses and pushes down [earnings before interest and taxes] is a bad thing. I can get capital easier than I can get operating dollars. And other people are different, but for us that's a major challenge trying to convince the financial and operations people that this is a good thing.

The other thing I'd point out is our legacy applications aren't cloud-enabled. It's really not a cloud play. It's — where's the data center? If I move Meditech to the cloud, it's not like it's cloud-enabled and suddenly it's like Facebook. I move Meditech to a different data center. So I'm paying more potentially for operating costs. Did it really do anything to enable my application or make it better? Not really. It's a data center play. So I think that's a challenge for a lot of us.

If you have applications that are cloud-native, that's a different discussion. But most of our legacy applications are nowhere near that. So that's a challenge because you get an [operating expense] hit, you get a cost hit, but where's the pay-for? Where's the value? My clinicians still operate the same way. So I think that's a little bit of a challenge in trying to sell it.

Angela Yochem. Executive Vice President and Chief Transformation and Digital Officer of Novant Health (Winston-Salem, N.C.): The most difficult challenge is not how to do it technically, because that has been known for a decade and a half. I don't think that the how is a problem. It is the shift in budget. So oftentimes, if all of your infrastructure is on prem, it is funded, and the ongoing refreshes and expansions in capacity are all funded through capital.

So [with the cloud] even as you're saving money overall for the company, you're starting to see that spend shift into a yearly operational expense. And I think that's been difficult for the strategic planners in some cases, not so much at Novant Health.

It's more accounting and strategy than it is technical difficulty these days.

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