Cloud Computing for the Health Industry

Topics: Cloud computing, Utility computing, Grid computing Pages: 16 (4622 words) Published: March 28, 2011
[Type the company name]|
Applying Cloud Computing to the Healthcare Insurance Industry| |
Northwestern University
Master of Science in Information Technology (MSIT)
Dr. Alan Wolff

This abstract describes how cloud computing can be used to support business strategy and continuity, improve efficiency and lower costs for a healthcare insurer. Specifically, it proposes using cloud services during the discovery and feasibility phases of new product launch and for disaster recovery. Our research will highlight the benefits of cloud computing for conducting proof of concept implementation, hypothesis testing, and impact assessment for new insurance products. We will also explore using cloud computing for disaster recovery, discussing the advantages that it offers in meeting recovery time objectives and reviewing the challenges of data security, automation, and cost.|

Executive Summary3
Rationale for our Project4
Business Environment4
Business Needs and Cloud’s Fit6
Cloud Computing Overview7
Healthcare Insurer Overview11
The Healthcare Value Chain11
Healthcare Payer Process11
New Product Launch: Feasibility and Discovery Processes12
Impact Assessment13
Cloud Recovery Services13
Introduction to Cloud-Based Recovery13
Advantages of Cloud-Based Recovery14
Cloud Recovery Vendors15
Selecting a Cloud Recovery Vendor16
Financial Considerations16
Cost-Benefit Analysis16
Return on Investment18
Figures and Exhibits21
The Healthcare Value Chain21
Healthcare Payer Process22
New Product Discovery Process23
Architecture of a Typical Healthcare Insurer24
Spectrum of Recovery Services25
Cloud Recovery Vendors26
The Economic of Public Cloud Storage – Baseline 1 TB27
The Economics of Public Cloud Storage – 3 Year TCO28
Works Cited29

Executive Summary
On January 13, 2010 Gartner predicted that 20% of businesses will own no IT assets by 2012. This movement will be led by virtualization, cloud-enabled services, and employees running personal computer systems on corporate networks. The shift of hardware to third parties will have a dramatic effect on hardware budgets and IT staff. In April 2010, Information Week reported on a survey conducted by the Sand Hill Group. It showed that in three years, 16% of those surveyed expect to spend 30% or more of their budget on cloud computing; 8% will spend 21-30% of IT budget; 22% will spend 11-20% of budget; and 24% will spend 7-10% of budget. Those expecting to spend 7% or more make up 80% of the sample. In September 2010, Gartner reported Cloud-Computing services represented 10 percent of overall spending on external IT services in 2010, based on a survey of 1,587 respondents. The data indicates a shift in spending from traditional IT assets such as the data center assets and a move toward assets that are accessed in the Cloud. Also, more respondents expected an increase in spending for private cloud implementations that are for internal or restricted use of the enterprise than those that are for external and/or public use. These and other such publications have been capturing the latest excitement around “Cloud Computing” and its potential. Still in its infancy, Cloud Computing has caught the imagination of corporate IT and is reshaping future business strategies in nearly all industries. Rationale for our Project

Due to InfoCruzer’s consulting experience in the healthcare industry, we decided to research how the Cloud might be used to solve business problems of a health care insurer. In this paper, we propose leveraging the Cloud to make strategic decisions and to maintain business continuity. Specifically this includes setting up a disaster recovery environment in the Cloud and utilizing environment test snapshots to perform technology impact analysis of new insurance product offerings. Business Environment


Cited: Wikipedia, “Electronic health record” Online,
Yankee Group, “Transition to the Cloud”,, Online (2009)
Forester Research, “How the Cloud will Transform Disaster Recovery Services” (July 24, 2009)
CIO, “The Case Against Cloud Computing, Part 4” Online,
[ 2 ]. Information Week, “IT Spending on Cloud Ratcheting Up,” Online, (April 5, 2010)
[ 3 ]
[ 4 ]. AHIP, “Health Plans’ Estimated Costs of Implementing ICD-10 Diagnosis Coding” Online, (September, 2010)
[ 5 ]
[ 6 ]. Yankee Group, “Transition to the Cloud”,, Online (2009)
[ 7 ]
[ 8 ]. Forester Research, “How the Cloud will Transform Disaster Recovery Services” (July 24, 2009)
[ 9 ]
[ 10 ]. IBM, “Cloud Computing Payback – An explanation of where the ROI comes from” Online, (November, 2009)
[ 11 ]
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