A new revenue source for large hospitals and health systems?

A few weeks back, I was a guest of The Atlantic and The Aspen Institute in Washington DC for something called the Washington Ideas Forum.  I shared highlights of that meeting here on HealthBlog.  It was quite a treat sitting just feet away from, and being able to interact with, so many well known political figures, business leaders and journalists.  I was particularly impressed by New York Mayor, Michael Bloomberg.  In a 30 minute exchange with television journalist Mike Wallace, Mr. Bloomberg held his own on every question.  Although coy when asked about running for President, I’m sure I wasn’t the only one in the room thinking he’d make a great candidate.   Michael Bloomberg is smart.  And, as his billionaire status affirms, he is as savvy in business as he is in politics. 

That’s why I wasn’t surprised with news announced today by Microsoft CEO, Steve Ballmer, and Mayor Bloomberg that the resources, software and information for New York City’s computers will soon be moving to the cloud.  Under an agreement made public, Microsoft will power all the city’s computer needs, consolidate their server and data storage, and allow city employees to choose from different levels of licensing, depending on their needs.  It is projected that this will save the city of New York $50 million dollars over the next five years.  Mayor Bloomberg understands technology.  Mayor Bloomberg understands the advantages and savings that accrue from centralizing IT and moving software and computing to the cloud.  Like I said, when it comes to business he’s as savvy as they come.

imageWhat about you?  If you’re a healthcare executive you know that under health insurance reform nobody is likely to pay you more for what you do today.  Hospitals and health systems are looking for ways to consolidate services, become more efficient and reduce fixed costs.  Savvy hospitals will also be looking for new sources of revenue.  So, here’s an idea!  If you are a large and well established hospital or health system in your region, have you thought about offering private cloud services to other hospitals, clinics, and physician practices around you?

Health data, like other data, will be moving to the cloud.  But because of the unique regulatory, privacy and security issues that surround health data, the preferred model is likely to be private cloud services vs. services on a public cloud.  Who will offer those services? Why not you?  You have already made significant investments in your data centers.  You may already be thinking of expanding your data center to meet your organization’s future needs.  Perhaps you should consider offering cloud services to the many smaller hospitals, clinics and physician practices around you and turn that data center of yours into a revenue center.

I can tell you from my travels around the world that many of our large enterprise health customers are beginning to have exactly that conversation with us.  If what I’ve said makes sense, maybe this is something you’ll want to explore as well.  Contact your local Microsoft account executive for more information about private (or public) cloud services.  Gentlemen (and ladies), start your engines!

Bill Crounse, MD                 Senior Director, Worldwide Health             Microsoft

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