 This article addresses the following:
What is the cloud?
 The answer to this question is not as straightforward as it may seem because of the confusing jargon surrounding private clouds, public clouds, and community clouds. Here's a good overview of cloud computing. For the purposes of this article we are speaking of the benefits and risks associated with the public cloud. The public cloud is what most mid-size covered entities and business associates are likely to find economically feasible (i.e. only larger organizations have the economic clout to pursue the private cloud option).
Is the healthcare industry moving to the cloud?
Yes, the healthcare industry is moving to the cloud in a big way and we applaud the move. Cloud economics will contribute to bending the healthcare cost curve, although not nearly as much as creating a functional healthcare marketplace based on patient outcomes and transparent pricing (something we are not likely to see anytime soon).
Dr. Halamka does an excellent job in this post in making the argument as to why the healthcare industry has been slow (understatement) to adopt enabling technologies. Fundamentally, his argument can be summarized as a "structural" justification for slow adoption. The industry simply had no real incentive to adopt enabling technologies, the status quo worked just fine (not really) thank you very much.
However, now the industry is being pushed to change because of disruptive forces, not all of which are based on government incentives. So healthcare is being hit with a "perfect storm" of change and has decided to embrace cloud computing as part of its change strategy. The industry has not only embraced the cloud but put such a bear hug on it that healthcare is now the fasting growing IT verticle because of it.
The movement of the healthcare industry to the cloud is unstoppable, but this should not obscure the real downside risks that must be managed as part of this process. Generally the risks are a direct result of losing control of mission critical applications and infrastructure. Before discussing the risks let's highlight the real benefits that the industry is likely to derive from cloud computing.
What are the benefits of cloud computing?
 The benefits of cloud computing in the healthcare industry are many, including:
- Fast and easy access to patient data anytime and anywhere.
- The potential to leverage best practices surrounding security and encryption.
- The availability of large and centralized de-identified data-sets available for multiple uses including predictive analytics.
- A robust communications infrastructure for home healthcare monitoring applications to plug into.
- A transaction/usage based pricing model for state of the art hardware and software that enables the distribution of previous fixed upfront capital costs more evenly across time.
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