Converged Infrastructure: Meeting the New Challenges of Healthcare IT

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1 WHITE PAPER Converged Infrastructure: Meeting the New Challenges of Healthcare IT Sponsored by: VCE Lynne Dunbrack March 2015 IDC HEALTH INSIGHTS OPINION Healthcare IT will play a central role in achieving the objectives of healthcare reform. Evolving business models and regulatory requirements are forcing IT to be more agile and more responsive to healthcare end users, requiring the rollout of new IT services while optimizing and rationalizing IT operations under tight budget constraints. Consequently, today's healthcare organizations (HCOs) are looking to simplify their IT infrastructure so that they can reallocate technical support and maintenance spending to invest in more innovative IT initiatives that will enable them to meet the business and clinical transformation demands under health reform. Infrastructure requirements in the datacenter include rapid deployment of servers, storage and applications, workstations and laptops, mobile devices, and analytics tools that allow providers to meet the data and technology demands of the business in a timely manner and at low cost. IT organizations also need to pay close attention to infrastructure requirements for regulatory compliance, business continuity, disaster recovery planning, and data security. Key findings include the following: Healthcare reform and new reimbursement models require agile, resilient, and secure IT infrastructure built on an extensible platform that addresses today's most pressing needs and will support future technology investments. The security needs of HCOs are growing with the proliferation of electronic health information. According to IDC's 2014 Global Technology and Industry Research Organization IT Survey, "security and risk management technologies" was the number 1 initiative (29.0%) in It was also the top-ranked initiative (20.1%) in Whether the HCO's datacenter is on-premise or in the cloud, or a hybrid of approaches, datacenter security is vital to the organization's overall security strategy. Converged infrastructure that is delivered onsite preconfigured with certified systems is increasingly attractive to HCOs that are looking to simplify and accelerate deployment of new critical IT initiatives while meeting intense security requirements to comply with a variety of regulations, including the Health Insurance Portability and Accountability Act of 1996 (HIPAA), and mitigate the risk of cyberattacks. Customers using Vblock Systems are able to rapidly deploy popular electronic health record (EHR) systems on fully tested, certified converged infrastructure that will meet their server, storage, and networking requirements for providing clinicians with secure access to patient data. March 2015, IDC Health Insights #HI254474

2 IN THIS WHITE PAPER This IDC Health Insights white paper is sponsored by VCE. The objectives of this white paper are to: Examine the current healthcare challenges and regulatory environment regarding securing patient information Identify healthcare technology and process challenges facing healthcare IT staff and associated healthcare business risks and how converged infrastructure can address them Present an overview of VCE's converged infrastructure offering This white paper is based on briefings with VCE as well as IDC Health Insights' converged infrastructure, security, and compliance research and IDC's research with VCE customers. SITUATION OVERVIEW Healthcare Challenges and Regulatory Environment Sweeping legislation enacted over the past five years, and in the case of HIPAA nearly two decades ago, has greatly enhanced the availability of electronic health information while creating the mandate for healthcare IT organizations to protect patient information from internal and external threats: The American Recovery and Reinvestment Act of 2009 (ARRA) provided $20 billion in incentives for physicians and hospitals to deploy EHRs and other meaningful use technologies. The Patient Protection and Affordable Care Act of 2010 (PPACA) created new care delivery and reimbursement models, such as accountable care organizations (ACOs) and value-based purchasing plans, focused on reimbursing for care coordination, improving quality of care, and improving patient outcomes rather than paying providers on a fee-for-service or volume basis. Under ARRA's HITECH Act, the HIPAA Omnibus Rule published in January 2013 implements the new privacy and security provisions proposed. As a result, privacy breach notification, minimum use, and disclosure reporting requirements become more stringent. The risks and liabilities associated with privacy breaches increase, and annual penalties for violations can total up to $1.5 million per provision, up from $25,000. Security must consider the complex healthcare environment with its highly mobile and transitory workforce. The journey to accountable care requires a transformation of healthcare IT that started with the implementation of meaningful use solutions EHRs, computerized physician order entry (CPOE), eprescribing, and health information exchange (HIE) to automate and connect healthcare applications and processes across the continuum of care. Following the meaningful use applications, HCOs began investing in population health management and analytics solutions to identify at-risk patients who require clinical intervention. The combined forces of ARRA and health reform are stimulating investment in clinical applications at a pace that threatens to outrun the ability of IT organizations to fund, support, and maintain these applications without the use of innovative infrastructure technologies IDC Health Insights #HI

3 VCE VBLOCK SYSTEMS: LAB-VALIDATED SECURITY AND COMPLIANCE SOLUTIONS FOR HEALTHCARE Benefits of Certified Converged Infrastructure Numerous HCOs employ converged infrastructure to speed application deployment, simplify operations, ensure compliance, reduce costs, and enable an agile, scalable infrastructure. Converged infrastructure is pre-engineered and integrates networking, servers, storage, and virtualization before delivery to the customer. This approach allows for quick, efficient, and flexible provisioning of these resources. Also, users can be separated from assets and applications and the devices they use to access them, thus enhancing levels of security across the entire infrastructure. Integrated certified systems are delivered through multivendor partnerships as a complete system with single SKU and single vendor for support services including, but not limited to, ongoing maintenance. Integrated systems simplify IT deployment and enable HCOs to transform their businesses by improving agility, efficiency, simplicity, and control. The benefits of converged infrastructure and how it addresses the technology and process challenges facing healthcare IT staff are presented in Table 1. TABLE 1 Drivers and Benefits of Converged Infrastructure Drivers Accelerate business Converged Infrastructure Benefits Reduces the time to revenue Manages through peaks of IT demand Enables accelerated deployment of new technology to meet evolving market and regulatory demands Facilitates data analytics to measure the organization's performance and facilitate decision making Lower costs While hardware costs may be on par, ongoing operations can be significantly less expensive: Improves application density Results in more shared IT resources and higher server and storage utilization Takes up less physical floor space and reduces the weight requirements on that floor space, thus requiring less power and cooling Cuts life-cycle maintenance costs Simplify IT Allows IT staff to work on more critical IT initiatives than routine maintenance of legacy systems Accelerates infrastructure and application deployment, thus saving time and ensuring compliance deadlines are met 2015 IDC Health Insights #HI

4 TABLE 1 Drivers and Benefits of Converged Infrastructure Drivers Reduce risk Converged Infrastructure Benefits Provides continuous availability, reliability, and high performance of mission-critical clinical systems, which are business imperatives Enables business continuity, backup, and disaster recovery strategies Mitigates business risks in the event of a breach (e.g., system outage, inability to deliver patient care, damage to healthcare organization's reputation) Build in security Security hardening built into the infrastructure: Helps ensure privacy and security compliance Protects data Manage system development life cycle Preconfigured infrastructure: Ensures proper sizing and performance availability Validates software and hardware configurations to run industry solutions successfully Source: IDC Health Insights, 2015 VCE Vblock Systems Overview VCE, was formed in 2009 by Cisco and EMC with investments from VMware and Intel to provide lab-certified converged infrastructure and services to datacenters. EMC and Cisco own 90% and 10% of VCE, respectively. The privately held company has over 1,000 customers across the industries it serves and 2,500 employees globally, with manufacturing operations in the United States and Ireland. Healthcare has been one of the early adopters of VCE infrastructure and remains an important market for VCE and its partners. VCE offers Vblock Systems customized for popular EHR systems, including Epic, McKesson, and MEDITECH. The Vblock Systems are preconfigured, tested, and validated by the respective EHR vendor. VCE ships a configured Vblock System within 45 days of an order, and the system can go live 5 days or often even 48 hours after it arrives on the datacenter floor. The Vblock System can be customized to accommodate the unique requirements of the EHR system's architecture. Other healthcare partners include Agfa, Fujifilm, GE Healthcare, Imprivata, Perceptive Software, and VisionWare. An extensive partner ecosystem enables VCE to offer a complete end-to-end infrastructure-as-a-service solution to help HCOs accelerate deployment of EHRs, digital imaging, document and content management, and back-office claims processing along with increasing end-user compute capacity so that they can run their whole healthcare IT system on Vblock Systems. Converged infrastructure along with validated industry solutions mitigates the risk of deploying complicated EHR systems and accelerates the time it takes to deploy them enterprisewide. For HCOs struggling to meet meaningful use deadlines, the benefits of converged infrastructure can be the difference between qualifying for meaningful use incentive payments and facing penalties for noncompliance. VCE provides solutions for healthcare as well as several other key industries such as financial services, education, government, public sector, and service providers. Vblock Systems, VCE's converged infrastructure product line, consists of EMC storage, Cisco Unified Computing System (UCS) servers and networking, and VMware server virtualization software IDC Health Insights #HI

5 In addition to Vblock Systems, VCE provides the following solutions that help HCOs optimize their datacenter operations and transform their business and clinical operations: AlwaysOn Point of Care, designed specifically for healthcare, combines technology from VCE and VMware and their partners to provide highly available virtualized desktops to help HCOs meet stringent healthcare privacy and security requirements by making data available without storing it locally on a fixed or mobile device. Business Continuity using EMC VPLEX enables mobility, availability, and collaboration by providing the ability to move data across distance. VCE Vblock Data Protection provides enhanced backup and recovery, data replication, and business continuity, along with predictable data protection. VCE works extensively with healthcare partners, including independent software vendors (ISVs), systems integrators, service providers, technology alliances, and developers that have been Vblock certified. Lab-validated and lab-certified solutions with built-in security ensure that when a Vblock System is delivered to an HCO's datacenter, the preconfigured applications are secured and will work together correctly. VCE offers professional services that are also available to provide additional security hardening above the standard configuration from the VCE factory. CHALLENGES AND OPPORTUNITIES The market challenges that HCOs face present opportunities for a vendor, like VCE, with a broad portfolio of converged infrastructure solutions and experience running mission-critical datacenters. These converged infrastructure solutions also address an HCO's challenges around: Security. As more patient information is moved into EHRs and made accessible both inside and outside the organization via a range of devices, including mobile devices, the risk of a privacy breach rises. Continuous operations. Many healthcare settings are 24 x 7 operations requiring round-the-clock access to mission-critical clinical applications. In extreme situations, lack of access to essential patient health information could mean the difference between life and death. Thus, uptime, computing performance, and reliability are critical considerations when evaluating healthcare IT. Cost pressures. More than half of U.S. hospitals are operating in the red. Exacerbating an already precarious financial position for providers are declining reimbursement rates by private and public payers. Careful consideration of the total cost of healthcare IT ownership is essential. More efficient IT operations will enable HCOs to reinvest IT cost savings in more innovative technologies and meaningful use and accountable care applications. Interoperability. Interoperability challenges are further compounded because the EHR market is highly fragmented with vendors offering a wide range of solutions, on a variety of technology platforms, for small, medium-sized, and large practices and hospitals. It is not uncommon for an integrated delivery system to have different EHR products from nearly as many vendors represented in its healthcare IT application portfolio. In addition to the various EHR products, wide-ranging clinical applications in inpatient and ambulatory settings across the continuum of care must be connected to establish fully operational integrated patient records IDC Health Insights #HI

6 Broad portfolio of technologies available from investor companies and partners. An extensive network of technology partners enables VCE to customize Vblock Systems to meet customerspecific requirements. On occasion, channel conflict that arises when partners' products compete with the solutions provided by VCE's investor companies must be resolved. FUTURE OUTLOOK The healthcare industry is facing unprecedented change today. Spiraling healthcare costs and a greater prevalence of chronic conditions led to health reform, which in turn has led to changes in care delivery, reimbursement, and business models. ARRA stimulated investments in EHRs and other healthcare technologies related to their meaningful use, such as order entry, eprescribing, and health information exchange. Cloud services have resulted in changes in technology buyer behavior and preferences, with line of business funding 61% of technology projects, according to IDC's Business Technology Study. With so much transformation underway, IT agility is of prime concern. HCOs are looking to source IT rather than build it themselves, thereby essentially contracting out risk and agility. Hybrid development and operations are resulting in changes to the IT organization. IT executives responding to IDC's IT Staffing Survey reported that 60% of staff time is dedicated to governing and managing IT systems and 40% of staff time is spent building and implementing IT systems. As IT teams move to the new model of service delivery, understanding the business needs of the HCO will be more critical. Converged and integrated systems are rapidly moving from evaluation to mainstream use, with HCOs increasingly deploying mission-critical tier 1 applications on the converged infrastructure platform. IT executives anticipate that 50% of compute, storage, and network resources and workloads will run on integrated systems by the end of Moving to a certified converged infrastructure improves an HCO's ability to focus on transforming business and clinical processes and ultimately creating IT-enabled services, such as analytics as a service, to support population health management and accountable care initiatives. PARTING THOUGHTS Converged infrastructure enables IT to be more responsive to the business needs of the HCO and to execute strategic initiatives more quickly. Workloads and applications are the critical pivot point for cloud and convergence decisions, so HCOs should consider which ones will have the highest impact. In addition, singular portfolios versus complex portfolios will impact infrastructure decisions and datacenter design. HCOs should partner with vendors that have a broad partner ecosystem and that are committed to the healthcare industry. An extensive partner network is critical to putting together a preconfigured converged infrastructure system that will be flexible and meet the HCO's unique needs. Selecting partners that are focused on the healthcare market and that understand the unique marketplace dynamics that challenge customers is critical to the successful deployment of a converged infrastructure. Healthcare providers should align with vendors that are dedicated to certified integrated infrastructure with market-leading technologies and professional services. In addition, they should consider the financial stability of the vendor organization and options for moving infrastructure to the cloud where appropriate. All the flexibility that a solution may provide will not matter if the vendor does not continue to sell and support the product IDC Health Insights #HI

7 About IDC International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make factbased decisions on technology purchases and business strategy. More than 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Global Headquarters 5 Speen Street Framingham, MA USA idc-insights-community.com Copyright Notice Copyright 2015 IDC Health Insights. Reproduction without written permission is completely forbidden. External Publication of IDC Health Insights Information and Data: Any IDC Health Insights information that is to be used in advertising, press releases, or promotional materials requires prior written approval from the appropriate IDC Health Insights Vice President. A draft of the proposed document should accompany any such request. IDC Health Insights reserves the right to deny approval of external usage for any reason.

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