Study Sizes Up Cloud Computing Potential

A report by MeriTalk, a public-private partnership focused on improving the outcomes of health and government IT, found that healthcare executives believe the adoption of IT-as-a-service (ITaaS) or cloud computing, can reduce IT costs by 9%, or $11 billion over the next three years.

The report, titled “Health Check: Healthcare CIOs Prescribe Change,” is based on a survey of 109 members of the College of Healthcare Information Management Executives (CHIME) conducted from April through June. The Alexandria, Va.-based organization’s report was underwritten by EMC Corp.

The report found that while respondents indicated only about 15% of their total current IT portfolio is delivered via cloud computing, about 47% has the potential to be delivered as a service—either via private, hybrid or public clouds--in the future. Also, 94% said have purchased at least part of their IT portfolio to be used as a service.

For example, 87% said they have purchased software or applications as a service, such as via virtualization. Also, 22% have purchased platforms or complete environments as a service, which can help increase the use of both private and hybrid cloud computing models. Further, 18% of survey respondents said they have purchased infrastructure as a service.

“Healthcare reform is forcing new efficiencies,” said Steve O’Keeffe, founder of MeriTalk, which was created to serve as an online community and go-to resource for government and healthcare IT issues. “ITaaS results to date show enormous potential. This is a crucial step if we want to revitalize our healthcare system.”

The report, however, also found that only 22% of respondents said their current IT environment significantly enables their organization to innovate. As a result, 99% said they were taking steps to transform their IT infrastructure to gain more efficiencies and drive down IT costs. For example, in addition to deploying cloud computing strategies, 73% of survey respondents said they are streamlining operations, while 48% are centralizing IT management.

However, healthcare executives also indicated that they face several challenges as they strive to achieve such goals. Fifty-two percent of respondents said they are unable to find and hire all the IT staff with the right skills needed for innovation. Also, healthcare business and regulatory changes, such as meaningful use, accountable care organization data integration and the need for improved IT security, were reported as other challenges.

The full report can be downloaded at