ROI and Cloud Technology for Medical Practices

Since my last column (“Ups and Downs,” April 2012) I have received several e-mails indicating that some of you found that the return on investment (ROI) for the electronic health record (EHR) cloud solution was simply not there, and that you subsequently did not feel comfortable taking the risk of housing your data with an unknown entity at an unknown site. I decided to explore the negative side of cloud technologies a little bit more.

This column is directed toward smaller practice groups rather than larger systems such as multispecialty groups or university practices. Typically, larger entities invest in their own IT staff and experts to guide their decisions.

Choosing a Vendor

When looking for an EHR cloud solution for your practice, one place to start is with a database of cloud technologies, such as the one available at medicalrecords.com/mrcbase. A search of these records, which are designed for ENT practices with three to five physicians, revealed 75 potential web- or cloud-based EHR systems. Filtering for certified products brought the number of results down to six. Cloud technologies for these smaller practices are also called “web based” or “application service provider.”

There are so many considerations to take into account when you are assessing your ROI that I would recommend hiring a consultant to help you work through the issues, the first one being the cost of remotely housing both the EHR software and its associated data. However, keep in mind that there are no claims to the completeness of any system’s otolaryngology knowledge base or to a software’s usability. Only you and your partners can assess these factors, which I believe are the most important aspects to consider in choosing a cloud-based system.

Let’s look at the infrastructure-as-a-service (IaaS) model. With IaaS, all networking, routing, data storage and retrieval are handled by an outside vendor, but the actual software is housed on the users’ computers and is not a part of the service. One thing is for sure: The cost of digital storage has really gone down in recent years. Storage is now so cheap that some say you are better off holding your own data and not relying on another party. In a recent article in Informationweek (March 2012), Jonathan Feldman wrote that when Amazon started hosting data, the cost for storing 50 TB of data was approximately $360,000. In today’s dollars, the cost has dropped to about $259,000. On the other hand, you could link together 25 2-TB drives, which would give you the same 50 TB of storage, for $3,000. While you will certainly not need 50 TB of storage for your practice, it’s clear in this example that the potential savings in storage costs are not being passed along to users by companies providing IaaS services.