Global equity funding to private digital health startups grew for the 7th straight year in 2016, with a 12% increase from $5.9B in 2015 to $6.6B in 2016, according to CBInsights.

Not incidentally, the rise of digital health has coincided with rising familiarity and market acceptance of public cloud providers like Amazon Web Services (AWS). Public cloud is what has allowed growing healthcare software companies to get to market faster, scale, and meet compliance obligations at a fraction of the cost of custom-built on-premise systems.

Digital health go-to-market journey

Ten years ago, when digital technology was disrupting established companies in nearly every industry, health IT was still dominated by a handful of established enterprises and traditional software companies. In the scramble to meet Meaningful Use requirements for stimulus funding, healthcare providers and insurance companies moved en masse to adopt EMR, EHR, and HIE systems. A few years later, another scramble began as the insurance industry rushed to build HIX (Health Insurance Exchanges) under Obamacare.

Today, most healthcare software products are delivered as Software-as-a-Service platforms. Except for core systems, customers do not anticipate needing to add infrastructure to host new software products. They expect to access these services on the cloud, and be able to add or remove capacity on demand. While some legacy software products will struggle to modernize their code to run in the cloud, next generation cloud-native products benefit from the inherent competitive advantages of infrastructure-as-a-service.

In a public cloud like Amazon Web Services, you can:

• Spin up servers in minutes
• Get best-in-class infrastructure security off the shelf
• Use compute/storage/network resources that have already been assessed to HIPAA standards, limiting the scope of your HIPAA assessment and removing the burden of maintaining most physical security controls (learn more about HIPAA compliance on AWS in our new eBook)
• Leverage native analytics and data warehousing capabilities without having to build your own tools
• Start small and scale fast as your business grows

Arguably the most important benefit for new companies is the ability to launch your software product into production in a short span of time. In order to comply with HIPAA, you still have to undergo a risk assessment prior to launch, but a good portion of that assessment can rely on AWS’ own risk assessment.

SaaS – not just for startups

The benefits of the SaaS delivery model are not limited to new startups. More established companies — who saw the market shift and took action early — have also benefited from the public cloud.

A top health insurance company recently launched an online wellness and population health management application for diabetes patients. The program combines a number of cloud-based technologies including Big Data, Internet of Things, and Live Media Streaming — all while maintaining HIPAA compliance.

This is all possible because the company hosted its new product on the AWS cloud.

The company also chose AWS because it supports the hyperscale growth of data that must be delivered seamlessly in patient-facing applications that monitor real-time health goals. This kind of data-crunching would be considerably more expensive in an on-premises data centre. AWS also take care of a significant portion of the risk and cost of protecting physical access to sensitive health data.

They didn’t build the infrastructure for the application alone. They relied on cloud automation and a partner (Logicworks).

Cloud automation

One of the core benefits of AWS is that it has the potential to significantly reduce day-to-day IT operations tasks. IT can focus more on developing software, and less on building and maintaining infrastructure.

However, AWS is not maintenance-free out of the box. AWS is just rented servers, network, and storage; you still have to configure networks, set up encryption, build and maintain machine images — hundreds of tasks large and small that take up many man-hours per week. In order to make AWS “run itself”, you need automation.

Cloud automation is any software that orchestrates AWS. AWS officially recommends the following aspects of automation:

• Each AWS environment is coded into a template that can be reused to produce new environments quickly (AWS CloudFormation)
• Developers can trivially launch new environments from a catalog of available AWS CloudFormation templates (AWS Service Catalog)
• OS is bootstrapped by a configuration management tool like Puppet or Chef, so that all configurations are consistently implemented and enforced. Or you can use AWS’ native service, AWS Opsworks.
• Deployment is automated. Ideally, an instance can be created, OS and packages are installed, it receives the latest version of code, and it is launched in an Auto Scaling Group or a container cluster without human intervention.
• All CloudFormation, configuration management, etc. is versioned and maintained in a repository.

And yes, it is entirely possible to use these automation tools in a HIPAA-restricted environment. However, creating this software from scratch is time-consuming and complex. It requires vastly different skills from those required to launch AWS or write an application — and most healthcare companies don’t really have the time or resources for it, so hiring a partner is the best approach.

The value of external expertise for health IT on AWS

The AWS cloud is a new landscape for most risk-averse companies. Established healthcare companies struggle to understand the new responsibility model for security and compliance on AWS, while new healthcare companies just want to get HIPAA compliance “out of the way” so they can move on to growing their business. This is where a partner can help. An experienced AWS consulting partner can reduce the risk of migration and accelerate the process of getting a HIPAA audit-ready environment up and running quickly.

The good news is that AWS has a very robust partner ecosystem for healthcare companies. Visit the AWS healthcare partner page for more information. Or contact Logicworks — we currently manage AWS for companies like Orion Health, MassMutual, and Spring Venture Group with ePHI for more than 50 million Americans.

The post Why Digital Health Companies Belong in AWS Cloud appeared first on Gathering Clouds.