Healthcare cloud market to hit $5.4 billion by 2017

The global market for cloud computing in healthcare is expected to reach $5.4 billion by 2017, according to research firm MarketsandMarkets.

Last year, the market was valued at $1.7 million with just 4 percent penetration, but it's expected to grow by 20.5 percent a year.

The report divides applications into two types: clinical--which includes electronic health records, computerized physician order entry, imaging, radiology, lab, pharmacy, and others; and non-clinical--including revenue cycle management, automatic patient billing, cost accounting, payroll management and claims management.

These systems are being used in public, private and hybrid clouds, with the market dominated by software-as-a-service providers.

The report points to the high level of regulation in healthcare, including HIPAA and Meaningful Use, as the reason it lags other sectors in moving to the cloud.

Recent polls have put the percentage of healthcare organizations using cloud offerings at 30 to 55 percent, according to MedCity News.

It's a fragmented market with none of the players--including big names such as Amazon, Dell and Microsoft--claiming more than 5 percent, according to the report.

Cloud offerings have been touted for their promise to ease sharing--as in the instance of Maine's image archive--and improve care, such as the medication adherence app Geisinger and Merck are creating.

But as the outages from last weekend's East Coast storms again attest, cloud-based service requires backup--and healthcare tends to be behind the curve on disaster recovery, according to a BridgeHead Software survey.

Vineet Jain, CEO of cloud storage specialist Egnyte, predicts an increasing mix of on-premise and web-based services.

"Enterprises have to respond with an infrastructure strategy that leverages the benefits of a cloud, and hedges that with a behind-the-firewall presence, giving them protection in a variety of circumstances," he told Datamation.

While healthcare budgets overall are growing slowly, IT projects continue to claim a growing share. And as with EHR implementations, underfunded cloud projects are likely to fail.

Overall, healthcare IT spending is expected to reach $40 billion by the end of this year, reports Computerworld, citing a report from market research firm RNCOS. Hardware is expected to account for 55 percent of that, with the other 45 percent coming from services and software.

EHR systems, which can be on-premise or in the cloud, are fueling the healthcare software market, which is projected to reach $8.2 billion this year in the U.S.

To learn more:
- check out the report
- read the MedCity News article
- read the Datamation post
- here's the InfoWorld article
- read the BridgeHead Software release

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