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Choosing an Electronic Health Record: Cloud v. On Premise EHRs

Choosing between cloud and on premise electronic health record systems can be a challenge for healthcare organizations.

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Choosing the right electronic health record (EHR) system that best suits an organization’s budget, setting, practice type, and patient population can be a daunting prospect.

In order to maintain consumer satisfaction and succeed with value-based care initiatives, quality improvement, and other business objectives, organizations need to ensure they are committing to a health IT suite that can help—not hinder—their progress.

There is no shortage of options to choose from. Well-known vendors and up-and-coming players are both offering innovative solutions to enhance communication, enable analytics, and support quality care.

Before organizations can take advantage of these capabilities, however, they must investigate the pros and cons of different types of EHR architecture.  

Deciding between cloud-based and on premise EHR tools is one of the most important choices an organization can make.

What are the challenges and opportunities associated with these different types of EHR systems, and how can healthcare providers choose the option that best fits their financial and clinical needs?

The differences between EHR architecture models

According to NIST, “the cloud” is a model for enabling internet-based, on-demand network access to a shared pool of applications, servers, storage, and services for connected devices.

There are public, private, and hybrid clouds.

The public cloud is available to multiple clients who access the same hardware, services, and network devices through an internet connection. These users pay a subscription fee or flat rate to use their portion of the public cloud. While users of the public cloud pay to store and access data and use computing resources, the cloud services provider controls the data architecture configuration, security, and availability of services.

Meanwhile, a private cloud is owned by a third-party service provider, but users are given access to a dedicated server that is not shared with other entities.

When healthcare organizations use private clouds hosted by third-party service providers, the third-party takes control of managing and maintaining the cloud. The hardware used to host a private cloud is owned by a single organization. No other data exists on a private cloud server besides data belonging to the healthcare organization paying for the cloud.

Finally, hybrid clouds function as a combination of a public and private cloud.Users store sensitive data and applications in a private cloud, and use the public cloud to manage high-volume, low-risk information.

On premise or client server EHR systems differ from private clouds because they are hosted locally and managed in house without the involvement of third parties.  

Healthcare organizations and health systems with on premise EHR systems must ensure IT professionals are on staff to maintain and oversee hardware and software. The IT team must maintain security safeguards and manage all controls. The on premise infrastructure functions on the healthcare organization’s local network connections.

All of these types of health IT infrastructure come with their own advantages and pitfalls.

Before deciding between a cloud-based or an on premise EHR system, healthcare organizations need to evaluate how closely each option aligns with their organizational priorities.

Considerations for moving to the cloud

A cloud EHR can be an attractive option for small, independent, and community hospitals or physician offices that may not be able to afford the high up-front costs of an on premise EHR implementation.

athenahealth, eClinicalWorks, and Allscripts are examples of health IT companies that offer cloud-based EHR solutions to users.

Cloud-based EHR solutions often don’t require that users make upfront capital investments in new hardware or in-house storage systems. Some health IT companies providing cloud-based EHR solutions offer flexible payment structures that allow hospitals to pay health IT companies based on collections rather than in a down payment.

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Hospital executives at Ellenville Regional Hospital were drawn to the unique payment structure that accompanies cloud EHR solutions when looking to replace a poorly-integrated legacy system with a single solution.

“With a lot of these systems, you have to buy the hardware, the software,” Ellenville Regional Hospital CEO Steve Kelley told EHRIntelligence.com. “You have to install all that stuff — millions of dollars — and you have to install all these licenses, which are typically paid for up-front.”

Other cloud EHR system contracts allow users to pay by subscription. Prior to being acquired by Allscripts, Practice Fusion’s cloud EHR offering was free to providers.

Now, Allscripts charges providers a subscription fee of $100 per month to use the software. The monthly subscription model gives users the option to pay for the EHR solution in smaller, scheduled increments.

The ease of deploying a cloud EHR solution is also a bonus for smaller organizations who may not have well-staffed IT teams to manage a full-fledged on premise EHR implementation.

Simple go-lives can mitigate the stress of a new EHR implementation and help to buoy provider satisfaction. Furthermore, health IT companies that offer cloud EHR solutions handle all system updates.

The high levels of provider satisfaction, lower costs, and ease of deployment associated with cloud-based EHR systems have helped to bolster their popularity among small practices and solo providers since 2015.   

A 2015 Black Book survey of 5,700 small and solo providers found cloud-based EHR adoption jumped from 60 percent in 2013 to 82 percent in 2015 due in part to lower upfront costs and improved clinical productivity.

More than half of solo practitioners participating in the survey noted that switching from an on premise EHR system to a cloud-based EHR helped to improve clinical productivity.  

Furthermore, all 20 cloud-based EHR product offerings included in the survey scored above 90 percent in overall user satisfaction for key performance indicators including computerized provider order entry (CPOE), clinical decision support, patient health data management, and communication capabilities.  

The security of cloud-based technology has also improved in recent years.

While healthcare organizations have been wary in the past of the security of cloud technology, the HIPAA Omnibus rule enacted in 2013 has helped to support compliance in the cloud.

According to HHS, cloud services providers (CSPs) that store, receive, maintain, or transmit protected health information (PHI) for covered entities such as health plans, providers, or healthcare clearinghouses must become business associates (BAs) to comply with HIPAA regulations.

“A business associate is an entity or person, other than a member of the workforce of a covered entity, that performs functions or activities on behalf of, or provides certain services to, a covered entity that involve creating, receiving, maintaining, or transmitting PHI,” explains HHS.

“A business associate also is any subcontractor that creates, receives, maintains, or transmits PHI on behalf of another business associate.”

CSPs must enter into a HIPAA-compliant business associate agreement (BAA) to become contractually liable for HIPAA compliance issues related to the protection of PHI.

By entering into a BAA with a CSP, healthcare organizations can maintain PHI security and HIPAA compliance when storing patient information in the cloud.

Because healthcare organizations that use the cloud do not directly manage how their data is stored, organizations must have trust in the security of a CSP or health IT company’s data centers.

If a vendor’s data center is compromised in any way, healthcare organizations could face days of EHR downtime that may negatively affect patient health data access, appointment scheduling, and patient care delivery.

One such incident occurred in January 2018 when a ransomware attack targeted Allscripts’ cloud-based EHR and electronic prescribing of controlled substances (EPCS) systems hosted at its Raleigh and Charlotte, NC data centers.

EHR functionality affected by the ransomware attack included InfoButton, regulatory reporting, clinical decision support, direct messaging, and Payerpath.

Physicians and nurse practitioners were required to manually write out patient encounter notes and prescriptions. Reverting back to paper-based processes can negatively affect clinical productivity and continuity of operations.

The potential for a security incident to strike a cloud data center and unexpectedly shut down provider access to patient health data may be a distressing prospect to some healthcare organizations.

However, healthcare organizations with on premise storage systems are by no means immune to EHR downtime.

Missouri-based Cass Regional and Jones Memorial Hospital in New York experienced sustained periods of EHR downtime in 2018 when security incidents affected their on premise EHR systems.

Regardless of where or how data is stored, downtime incidents can affect every type of health IT infrastructure.

Exploring on premise EHR solutions

The dominant players in the health IT market — including Epic, Cerner, MEDITECH, and others — primarily offer on premise EHR systems.

For large health systems and healthcare organizations with the capacity to store data, maintain servers, and pay upfront costs, on premise EHR systems from these popular industry names are a familiar, reliable option.

On premise EHR systems from large health IT companies are also more likely to offer health IT solutions with 2015 ONC health IT certification, according to the most recent data from ONC.

Epic and Cerner EHR systems were used by the highest percent of eligible hospitals to attest to meaningful use from 2011 to 2016, with more than 23 percent of eligible hospitals using Cerner and 22 percent using Epic.

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Cerner and Epic also offer the most health IT solutions that meet 2015 edition base EHR definition requirements. Cerner, Epic, Allscripts, and Greenway Health each offer at least one health IT module that meets 100 percent of ONC 2015 edition base EHR criteria.

eClinicalWorks cloud-based EHR also includes modules that meet 100 percent of ONC 2015 edition base EHR criteria.

Cloud EHR vendors Practice Fusion — since absorbed by Allscripts — and athenahealth meet 47 and 53 percent of ONC 2015 edition base EHR criteria, respectively.

While healthcare organizations are not advised to make EHR purchasing decisions based solely on health IT certifications, a seal of approval from ONC can signal which health IT systems meet federal reporting requirements and include useful functionality.

On premise EHR systems also give users complete control over how and where data is stored, as well as control over infrastructure configurations. This level of control allows healthcare organizations to customize their health IT systems extensively to fit their specific needs.

On premise EHR system users can also access patient health data without an internet connection, which can help to maintain continuity of operations when internet is down. This can be a comfort to providers and organization executives who do not want to rely on an internet connection to access necessary clinical information stored in the cloud.

While on premise EHR systems allow healthcare organizations to directly oversee all aspects of IT infrastructure, this level of control comes at a price.

Investing in an on premise EHR system is a major financial decision for hospitals and health systems, with some organizations spending well over $100 million in upfront costs.

On premise EHR go-lives involve more hardware, software, and personnel than a cloud EHR launch. All told, many on premise EHR implementation projects span about 18 months from preparation to deployment.

While customized deployments tailored to a healthcare organization’s specific workflow can be a bonus, the level of control organizations have over on premise EHR implementations can also be a source of frustration and long-term financial losses.

Tennessee-based Erlanger health system suffered billing problems and $4 million in losses after going live with an Epic EHR system at its inpatient services facilities in October 2017.

Erlanger also saw a significant increase in spending as a result of making more than 100 new hires to maintain the new EHR system.

Health system leadership planned to make up all losses by billing for services administered since the go-live after the process was complete.

While some health systems are able to quickly make up for financial, clinical, and administrative snags months after going live with a new on premise EHR system, others struggle long-term to restore clinical productivity to normal levels due to problems during deployment.

How to choose an EHR that meets organizational needs

Ultimately, healthcare organizations looking for a cost-effective EHR solution that will not require a team of on premise or external IT experts to maintain, manage, and control health IT infrastructure and data security may lean toward a cloud-based offering.

Large health systems that can afford to foot the bill and want to maintain complete control over their infrastructure, data security, optimization, and deployment processes may prefer an on premise EHR system.

However, hospitals and health systems seriously considering on premise systems should note that more and more large health IT companies are investing in cloud-based innovations.

At HIMSS18, Allscripts debuted a cloud-based EHR system with machine learning capabilities. In March 2018, Medsphere moved its CareVue EHR system offering to Amazon Web Services (AWS) to ease the financial strain of EHR implementations for community hospitals by eliminating the need for local data centers.

Meanwhile, Netsmart launched a new cloud-based EHR system designed specifically to meet the unique needs of home health and senior living care providers.

In light of the steady stream of cloud-based innovations coming from different health IT companies in recent years, some industry experts have opined the cloud is the future of health IT.

No matter which system best fits an organization’s goals, leaders should assess their resources, available capital, and capacity to invest in external or internal IT management before signing on for an on premise or cloud-based EHR.

If implementing a system with a flexible payment structure, full vendor-supplied IT support, and free updates is top-of-mind, the cloud may be the better option. If customization and full infrastructure control is top priority, on premise systems may be a better fit for a health system’s organizational needs.

Regardless of system architecture, utilizing go-live support may help to streamline implementation and reduce problems that often hinder success in the early days after an EHR implementation launch.

In a recent KLAS survey, 54 percent of participating providers cited strong EHR training as one of the most critical determinants of success.

Completing an implementation on time and within budget was the third-highest measure of success for a well-executed go-live.

With the help of external go-live support, healthcare organizations can avoid some of the pitfalls of a poorly-managed system launch.

Whichever type of infrastructure healthcare organizations choose, healthcare organization leadership must ensure clinicians can quickly and securely access clinical data for well-informed patient care.

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