This is a guest post by investor Robert Abbott

In a field where handwriting notes on paper charts and managing large rooms filled with filing cabinets have been the accepted practices for decades, healthcare providers are being deluged by a perfect storm.

Not only do they have to grapple with implementing new technology and converting paper files to digital format, they are simultaneously dealing with how to secure this growing cache of electronic data while complying with complex corporate governance policies and federal mandates.

Despite these challenges, healthcare providers are finding a silver lining in secure cloud services that help them address the key technology, regulatory and privacy issues they face.

The market and legislated demands created by 900,000 healthcare providers migrating to electronic records has resulted in a $25 billion healthcare IT market, which is expected to grow more than 24 during 2012-2014, according to global market research company RNCOS.

But because healthcare is about a decade behind other industries in the adoption of IT technologies, this perfect storm is giving healthcare companies a chance to leapfrog into cloud-based solutions designed to solve their unique needs.

Cloud adoption is still in its infancy in healthcare with early adopters representing only about four percent of the market. However, there is great potential for cloud technology. According to a report from research firm Markets and Markets, the cloud computing market in healthcare is estimated to grow at 20.5 percent from 2012 to 2017. [At VentureBeat’s CloudBeat conference, which begins tomorrow, healthcare is going to be a major theme; providers will discuss how they’re adopting the cloud, and healthcare companies will explain how it’s also helping them use novel “big data” strategies.]

CloudBeat 2012 assembles the biggest names in the cloud’s evolving story to uncover real cases of revolutionary adoption. Unlike other cloud events, the customers themselves are front and center. Their discussions with vendors and other experts give you rare insights into what really works, who’s buying what, and where the industry is going. CloudBeat takes place Nov. 28-29 in Redwood City, Calif. Register today!

Given these growth prospects, there is a sweet spot in this market for cloud service providers that can effectively combine IT expertise and experience dealing with the unique privacy, security and compliance demands of the healthcare market.

Of particular interest are cloud providers that offer automated solutions to replace traditional paper-based processes, enable better connectivity and communications between patients and their providers, and that support the entire healthcare supply chain.

Some of the leading cloud providers in healthcare today include CareCloud, ClearDATA Networks Inc., athenahealth, ADP AdvancedMD, PracticeFusion, RemitDATA, and TeraMedica Inc. For example, Baptist Health South Florida, the largest not-for-profit healthcare organization in the region, recently announced it is subsidizing CareCloud’s integrated electronic health record and practice management solution to more than 2,500 community-based physicians to improve patient care. While ClearDATA, for example, is providing its HealthDATA Cloud Platform to Dignity Health, the fifth largest hospital provider in the nation and the largest hospital system in California.

“By moving various healthcare infrastructure and applications to ClearDATA’s cloud platform, Dignity Health has been able to reduce its IT costs while increasing security and efficiency and greatly decreasing the time it takes to deploy a solution,” said Darin Brannan, ClearDATA’s president and CEO. “We also improve reliability – in terms of uptime and redundancy – and our state-of-the-art cloud systems provide greater performance over legacy hardware and networking architectures, which is typically not well-suited for the hospital’s growing data requirements.”

During CloudBeat 2012, on Nov. 28 at 10:15 a.m., Brannan and Scott Whyte, Dignity Health’s vice president of IT Connectivity, will join VentureBeat Executive Editor Dylan Tweney to talk in more depth about the challenges that healthcare companies face in their transition to electronic medical records and new IT solutions, and what they need to consider when adopting a cloud solution. During the session, they’ll also share more details about how Dignity Health has employed ClearDATA’s innovative solutions to strategically upgrade select components of its IT infrastructure, prepare for personalized care models, comply with mandates and ensure the security and privacy of patients’ electronic records. 

Robert Abbott is a general partner at Norwest Venture Partners (NVP), where he focuses on a wide variety of investment categories including mobile, cloud and IT infrastructure. NVP is an investor in ClearDATA and CareCloud. 

Navigating the storm image // Shutterstock