IBM puts its health IT solution in the cloud

By | August 5, 2010, 10:23am PDT

Summary: IBM’s decision to go with the cloud justifies the business models of other SaaS companies. They could do very well in the next year or two.

In writing over the last few weeks about major IT providers getting into health IT any way they could, it was with a sense of sorrow for companies like Cerner that will be displaced.

The sorrow grows a little today, with IBM’s announcement it will do health IT in the cloud, working with Aetna through its ActiveHealth unit.

The strategy has made increasing sense as the year has gone on.

The 2011 fiscal year will start in less than three months, on October 1. Hospitals and clinics will need six months of experience in order to prove meaningful use and get that sweet, sweet stimulus cash. There is no way they can hit that deadline with an installed solution. They must have SaaS.

The first customer release is already out on the new agreement, from the Sharp Community Health Group in San Diego, which has 200 generalists and 500 specialists on call, serving a population of 165,000 according to its Web site.

Sharp was already considered one of the most wired practices in America, so in the near term the IBM EHR can be layered on top of it.

IBM says it will first focus on mid-sized practices, like Sharp, but the solution scales down easily, threatening the folks at Practice Fusion, AthenaHealth and eClinicalWorks over time.

Since it’s SaaS, it also eliminates any need for IBM to buy an existing EHR provider, like a Cerner or McKesson. Cloud computing is a major secular change in computing (I heard a radio ad for a cloud service a few moments ago) and tends to render client-server systems instantly obsolete. (Well, maybe you can use the clients.)

In the near term, of course, IBM’s decision to go with the cloud justifies the business models of other SaaS companies. They could do very well in the next year or two, and IBM’s decision may even give them an exit strategy.

But all that’s for later. For now, IBM is getting in on the health IT gold rush, and it’s coming with a solution that leapfrogs most rivals by many years, plus a partner who knows where many of them live.

Someone did some thinking.

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Disclosure

Dana Blankenhorn

Dana Blankenhorn has been a journalist, writer and part-time futurist for over 30 years. At the present moment I run only a personal blog in addition to my ZDNet open source blog. DanaBlankenhorn.Com has the subtitle The War Against Oil. In the past I have used it to write about political history, e-commerce, personal matters, some ideas related to open source, and The World of Always On, which is the idea of using sensors, motes and RFID to turn WiFi links into platforms for applications which live in the air. My IRA account at Schwab holds a few tech shares, most notably some Intel and Applied Materials, but there are no open source companies in it. I don’t even own any CBS stock.

Biography

Dana Blankenhorn

Dana Blankenhorn has been a business journalist since 1978, and has covered technology since 1982. He launched the Interactive Age Daily, the first daily coverage of the Internet to launch with a magazine, in September 1994.

Talkback Most Recent of 4 Talkback(s)

  • The cloud should be secondary
    Clouds are great, but on-site information & images are better.

    Couds assume that you are up and working 100% of the time. I can see some tort actions in the future when the cloud goes down and patients (especially in hospitals) suffer.

    Considering that there was a recent article about legal work (especially at the entry level lawyer level) being outsourced to India I'm sure a lot of trial lawyers and defense lawyers will be looking at cloud failures very closely.

    And, considering just how cheap basic computers and hard drives are, there is going to be no excuse for a patient to be disadvantaged because of any cloud.
    ZDNet Gravatar
    Ken_z
    5th Aug 2010
  • Clouds go down?
    @Ken_z I think you mean the Internet connection goes down. But caching a portion of a system on local hardware means a short-term cut-off of connectivity does not matter. And it's still tons cheaper than a local system.
    ZDNet Gravatar
    DanaBlankenhorn
    6th Aug 2010
  • The concern
    @DanaBlankenhorn

    needs to be identifying the data, information, and images that are needed IF the internet goes down (or the cloud servers).

    In many cases the IT system needs to be as reliable as paper for the sake of the patient. If a patient is harmed at any level then the cost of litigation needs to be added to the "tons cheaper" cloud.

    And, lets face it - how expensive is the on site hardware when HDs are added? Or simply increasing the size of the HDs?
    ZDNet Gravatar
    Ken_z
    6th Aug 2010
  • ZDNet Gravatar
    itkonlyyou217
    5th Aug 2010

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