Cloud Computing Offers Benefits, Risks

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Practice Management Feature – January 2012

Tex Med. 2012;108(1):23-27.

By Crystal Conde
Associate Editor

Many physicians are finding their heads in a "cloud" as they ponder adopting or upgrading an electronic health record (EHR). That doesn't mean they're not in touch with reality. It means they now can choose new web-based systems, also known as cloud-based EHRs, that allow them to pay a monthly subscription fee to access an EHR rather than purchase it. They don't have to buy an expensive server with its associated hardware and software; a computer with an Internet connection will do.

"Cloud" is the latest buzzword companies use to market systems that store EHR information across a network of data centers and in no one particular place at any time, rather than storing the data all on a single server in the doctor's office.

Cloud-based EHRs have many benefits, including lower up-front capital costs, compared with traditional client-server EHR models. But they have drawbacks, too, including higher annual operating expenses than client-server EHRs.

Matt Murray, MD, a Fort Worth pediatric emergency medicine physician and vice chair of TMA's Ad Hoc Committee on Health Information Technology, says "there's no right or wrong choice" when selecting an EHR model. He urges physicians to weigh the pros and cons of client-server EHRs and those of cloud- or web-based systems, keeping the needs and strengths of the practice in mind. (See "Client-Server vs. Cloud-Based Systems: Benefits and Risks.")

Dr. Murray defines client-server systems as "EHR software installed on a server and located in the physician's office. The physician and staff access the EHR through computer devices connected to the server through a local area network set up in the office."

He compares cloud computing to online banking on a home computer.

Peter J. Polack, MD, a Florida ophthalmologist who blogs on medical practice management and EHR implementation, says cloud-based EHRs are cheaper to set up, but client-based systems usually have a better return on investment, with a typical break-even time of about five years. Cloud-based systems don't have a break-even point per se because there is no initial software investment. Paying for use of the system simply becomes part of a practice's monthly operating expenses.

Sara Bartos, MD, an Austin internist, employs a part-time nurse, a medical assistant, and an office manager. She adopted a cloud EHR system in her solo practice "to avoid the cost of buying software updates and the responsibility of maintaining a server and the HIPAA and patient privacy issues that go with that."

"I know that the system will always be up to date and meet the never-ending regulatory changes that are continually coming out," she said.

A 2009 TMA survey on EHRs shows the median purchase, training, and implementation costs are $18,000 per physician, down from $25,000 in 2007. Monthly maintenance costs are $350 per physician, down from $425 in 2007. TMA recently updated information on EHR vendor-specific pricing. To access TMA's EHR Product Pricing Comparison, visit the TMA website.

Dr. Bartos began using her vendor's practice management software in 2009 and began using the web-based EHR product in July last year. The vendor doesn't require her to sign a contract for services. She pays $349 per month for the cloud EHR and $349 per month for the practice management and electronic billing components.

Normally, EHR training would cost $5,000, but her vendor gave her 30 hours of free training. For a $1,000 fee, she can cancel her service at any time and receive an external hard drive containing all her data.

"The cloud-based EHR may seem expensive in the short term, but in the long run, I'm not going to have to pay for system upgrades, extra employees to manage the system, or an in-house server. Plus, I have no upfront costs and can access the data from anywhere," she said. Her EHR vendor backs up data every hour.

Dr. Bartos says that because her EHR vendor is fairly new to the industry, she has encountered some programming and training glitches, but still says her experience with the vendor has been good.

Weigh Your Options

Dr. Murray encourages physicians to take into account their finances and information technology capabilities in selecting an EHR system. Before signing a contract, physicians also should ask vendors about data ownership, export, security, access, backup, and breaches, as well as server maintenance and troubleshooting. (See "Questions to Ask Cloud Vendors.")

"I'd be concerned with choosing a cloud-based system if I worked in a rural part of Texas with unreliable Internet access, slow Internet connection speeds, or lack of backup connectivity options. If the only Internet connection goes down, you're web-based EHR is dead in the water. But if I belonged to a small practice that wasn't technically proficient and didn't have a lot of cash on hand for the up-front costs of a client-server model, my practice may benefit from the lower monthly cost of a cloud EHR, as well as the privacy, security, and maintenance services provided by the vendor."

 Jason Terk, MD, a Keller pediatrician and chair of TMA's Council on Science and Public Health, agrees, citing Internet and internal electronic connectivity as key considerations when opting for a cloud EHR.

"The performance of a web-based EHR system depends on having the fastest and broadest-band Internet connection possible. An investment in upgraded electronic infrastructure will save a great amount of frustration later," he said.

Dr. Terk uses a cloud EHR system at Cook Children's Health Care System in Fort Worth. He was part of a committee that selected the web-based model.

"For me, it is sort of like the choice to buy a car or lease one. In my opinion … leasing [an EHR system] is the better option because of the rapid changes that continue to happen with technology and the expectation that improvements must be ongoing," he said.

Cook Children's purchasing program for independent physicians needed to identify a vendor for its affiliated physicians in 33 states. When the health care system evaluated EHR options, Dr. Terk says committee members looked at client-server and web-based systems. The large organization faced investing tens of millions of dollars to implement a client-server model.

The hospital "purchased and implemented the web-based option we selected for a tiny fraction of the up-front cost of the server-based option we had been considering. And the cloud delivers improvements and upgrades overnight without additional incremental costs," Dr. Terk said.

Get Help; Earn Incentives

Help in selecting and using the optimal EHR for your practice is available from the regional extension centers (RECs). Dr. Murray is board chair of the North Texas REC.

"RECs are helping physicians assess their practices and narrow their EHR selections, which could be web-based or client-server, to a few that would meet their needs," he said.

Texas has four RECs that charge primary care physicians an annual subscription fee of $300 for their service: the Gulf Coast REC, the North Texas REC, the CentrEast REC, and the West Texas REC. In return, physicians receive services worth at least $5,000. Physicians who are specialists but can attest to providing primary care also are eligible to receive REC consulting at the subsidized rate. Other specialists can receive a quote for customized services.

For more information about REC services, call TMA Health Information Technology Director Shannon Moore at (800) 880-1300, ext. 1411, or (512) 370-1411, or e-mail Shannon Moore.  For more information, visit the TMA website.

Dr. Bartos received assistance from the CentrEast REC during her EHR system implementation.

"The REC continues to assist me. The consultants are checking as I progress to make sure I remain eligible to receive my meaningful use incentive payment, which is really important as I have had to hire extra staff to scan in records and enter data as I make the transition," she said.

Eligible health professionals participating in the Medicare EHR incentive program can earn up to $44,000 over five years for meeting meaningful use criteria from 2011 to 2016. Or, non-hospital-based eligible physicians with at least 30 percent Medicaid patient volume can receive up to $63,750 over six years in incentive payments from 2011 to 2021.

For more details and guidance, check out TMA's Medicare and Medicaid EHR Incentive Comparison, EHR incentive eligibility tool, and Medicare and Medicaid incentive program instructions online.

Crystal Conde can be reached by telephone at (800) 880-1300, ext. 1385, or (512) 370-1385; by fax at (512) 370-1629; or by email.

Jan 12 TM Pract Management Sidebar

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Questions to Ask Cloud Vendors

 When assessing a cloud-based electronic health record (EHR) system, ask vendors these questions:  

  • Who owns the data? You will want to be able to take it with you to another system later.
  • Is there a cost for exporting data? Some vendors will allow the export of data, but the format may be useless for converting the data to other systems.
  • What precautions do you take to protect data? Find out if the vendor encrypts data.
  • Who has access to the data? Ask the vendor to provide regular reports showing who has accessed the data and where the data actually reside.
  • How will you back up the data? Ask the vendor to demonstrate how its disaster recovery plan works.
  • Who's liable if someone breaches patient data on the network? The Texas Medical Board says physicians are responsible for maintaining patient confidentiality.
  • Can I easily access an audit trail if there is a data breach, and who must notify individuals about a breach?
  • What security and privacy controls do you use, and how will you demonstrate adherence to those controls? Matt Murray, MD, says the contract "should require the vendor to provide audit results periodically each year and preferably to use a recognized auditing standard for an independent, third-party audit at least once annually."
  • What happens if your company goes out of business or is part of an acquisition that renders the system obsolete? Ensure provisions in the contract for the data to revert to your practice immediately.

Source: Physicians Practice and Matt Murray, MD

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