Ultimate Guide to Cloud Computing in Healthcare

Cloud computing, as a part of broader digital transformation efforts, is not an option but an inevitability in the healthcare industry. In a 2025 Deloitte survey on global health trends, 90% of respondents agreed that accelerated digital transformation will have a moderate or significant impact on their organizational strategies during the year. Plus, 88% of respondents cite virtual health, digital tools, and connected care delivery as emerging trends for the healthcare industry, along with the proliferation of generative AI (81%).

Cloud computing can enable these healthcare digital transformation projects, but what is the technological landscape like now, and where is it likely to go in the near future? We cover the benefits of cloud, key applications, future trends, and challenges in this guide.

What Is Cloud Computing in Healthcare?

Cloud computing in healthcare refers to the use of internet-hosted remote servers and networks to manage, store, and process healthcare data and applications. While providers traditionally hosted workloads in on-premises data centers, the adoption of cloud technology can support modern telehealth solutions, operational efficiency, and better clinician and patient experiences.

Healthcare organizations typically use one of three main cloud deployment models: public, private, or hybrid. Public cloud platforms such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP) offer HIPAA-eligible services with business associate agreements (BAAs), encryption, and advanced security controls. They can be strong, cost-efficient options for healthcare organizations managing protected health information (PHI).

Some organizations still choose private cloud for dedicated environments, regulatory preferences, or specialized performance needs. In reality, most IT leaders find a hybrid or multicloud approach best balances compliance, performance, and cost-effectiveness.

What Are the Benefits of Cloud Computing for Healthcare Organizations?

Cloud computing can be greatly beneficial to both healthcare professionals and patients. The advantages of cloud technologies include easy access to health data for better collaboration between healthcare facilities, better patient experiences, reduced costs, accelerated disaster recovery efforts, and improved scalability.

Improved Data Access and Sharing

Inadequate access to data can slow down the patient care process. When healthcare providers are unable to efficiently retrieve and share medical information, patients may experience longer times to resolution. Cloud-based solutions enable collaborative care coordination and interoperability between departments and different providers. They facilitate real-time data access and streamlined data sharing between providers, administrators, and medical devices, so healthcare professionals can create more comprehensive treatment plans.

Cloud computing also increases patient care continuity and the effectiveness of telehealth sessions. Patients can also feel more empowered with greater control and visibility over their own data, such as test results, medical history, and information collected from remote monitoring devices.

Enhanced Patient Experience

Patient empowerment is one factor that can greatly improve the healthcare experience, and this comes at an important time. According to a recent Gallup poll, patients’ view of U.S. healthcare is at a 24-year low, with the percentage of respondents rating healthcare quality as excellent or good dropping 10% since 2020.

Cloud computing in healthcare can increase the perception of quality when applied with a patient-centered focus. Cloud services can help organizations implement the features patients expect to encounter, such as:

• Personalized health dashboards
• Easy access to online portals with historical data and scheduling capabilities
• Streamlined bill payment tools with a user-friendly interface

Healthcare institutions can also use cloud technology to unlock advanced capabilities, like AI-powered clinical decision support systems (CDSS), that can result in better treatment and quality patient care. As the healthcare sector continues to shift to value-based care, these capabilities will be key to achieving HCAHPS ratings and optimizing reimbursements.

Better Cost Efficiency

When healthcare organizations manage workloads on-premises, they have to factor in many upfront costs, including hardware, networking, space rental or purchase, power, cooling, and staffing. Cloud computing shifts costs from capital expenditures (CapEx) to operational expenses (OpEx), particularly with public cloud, where customers are only paying for the resources they use. This allows for increased financial flexibility and business agility.

Providers can also leverage healthcare cloud computing to implement operational efficiency measures and automations time spent on manual labor, including clinical documentation and administrative tasks. This can drive cost savings, compared to on-premises environments, and allow staff to react more swiftly to changes in resource demand. With 35.4% of U.S. healthcare workers (including over 57% of primary care physicians) experiencing burnout, automation can also be key to reducing turnover and improving employee satisfaction.

Faster Disaster Recovery

Cloud-native disaster recovery leverages replication across multiple availability zones and regions, enabling healthcare organizations to meet strict recovery time objectives (RTOs) and recovery point objectives (RPOs).

Services such as Azure Site Recovery (ASR) and AWS Elastic Disaster Recovery (DRS) provide automated failover and failback capabilities. This reduces downtime during outages caused by natural disasters, cyberattacks, or human error. These solutions also support immutable backups and ransomware detection, ensuring PHI and mission-critical systems remain protected. As a result, healthcare IT teams can orchestrate recovery more efficiently and cost-effectively than with traditional secondary data centers.

Far from being a weakness, cloud security features are often stronger than what healthcare organizations can maintain on-premises. Rob Hall, Cloud Director at Intermountain Healthcare, explains how it plays an important role in data loss prevention in Ep. 22 of TierPoint’s Cloud Currents podcast:

“It also strengthens our security policy.. to be able to have multiple environments where we can back up our data and have that available. If one set of data that we have was potentially compromised by ransomware, we have other options that we can go to get that data, which is highly leveraged.”

Rob Hall, Cloud Director at Intermountain Healthcare

Increased Scalability

Rapid growth, sometimes associated with mergers and acquisitions, is common in healthcare settings. New technologies can also demand a lot of new resources. Businesses need to be able to scale quickly in periods of strong growth and demand. Cloud technologies can grow with healthcare organizations without additional capital expenditures. This can also be beneficial in times of lower demand, leading to reduced costs without having to pay for unused resources.

Key Applications of Cloud Computing in Healthcare Organizations

There are already countless cloud computing applications available to healthcare organizations, yet new solutions are continuing to emerge. Today, the use of cloud technology is helping organizations improve the management of electronic health records, remote patient monitoring, telemedicine, data storage, and data sharing. Emerging technologies, including tools powered by artificial intelligence and machine learning (AI and ML), will continue to shape the healthcare landscape in the coming years.

Electronic Health Record (EHR) and Electronic Medical Record (EMR) Management

Healthcare providers and practices can more easily access and manage formerly siloed electronic health records (EHR) and electronic medical records (EMR) in the cloud. With cloud-based EHR and EMR systems, organizations can maintain the security needed for regulatory compliance while gaining features that:

• Improve coordination between teams
• Provide a more comprehensive view of patient health history
• Allow for a more well-informed approach to patient care

As the exponential growth of medical and operational records continues, this cloud-based software will be especially useful for big data management due to its scalability.

Telemedicine and Remote Patient Monitoring

Remote access to care can improve outcomes for patients who face barriers to accessing in-person care, such as busy schedules, lack of reliable transportation, or mobility issues. Telemedicine also helps providers connect with patients in underserved areas, so reliable connectivity through cloud computing is a must.Cloud-based healthcare solutions can collect important data for medical professionals between visits using remote patient monitoring. Wearable devices collect health information that can be sent to providers, who can then perform real-time analysis. Having more frequent data points can help healthcare professionals make important decisions for patients with chronic conditions and catch issues that may escalate if gone unchecked, thereby reducing emergency room visits.

Data Storage and Sharing

While text-based medical records do not require a lot of storage space, high-resolution medical images place a much greater demand on data storage. Picture archiving and communication systems (PACS) are often used to store and manage medical images, including X-rays, MRIs, and CT scans. When healthcare organizations leverage cloud-based PACS, they can scale up based on resource needs without changing infrastructure or purchasing additional hardware.

HIPAA-compliant Imaging as a Service solutions can allow for secure data sharing with patients without the risk of outside infiltration. These solutions empower healthcare entities with the flexibility of predictable, per-study pricing, enabling 40% lower total cost over six years. Organizations that legally have to store files for several years can also budget for reliable, monthly cloud storage fees.

Artificial Intelligence and Machine Learning

While human expertise is indispensable in medical settings, emerging use cases for artificial intelligence and machine learning (AI/ML) include training models on large medical datasets to identify patterns that may go unnoticed by the human eye. Predictive analytics, using these large datasets, can analyze patient data to determine if someone is at greater risk for a certain condition or showing early signs of a disease based on minute imaging differences. This could help with diagnostics and result in earlier interventions.

Beyond diagnostic applications, providers can leverage generative AI (GenAI) tools to:

• Streamline clinical documentation and charting
• Create personalized patient education materials
• Translate medical information into plain language for better health literacy

The Future of Cloud in Healthcare

As emerging technologies grow more sophisticated, we are likely to see more applications for cloud systems in healthcare. Over time, AI/ML-powered tools can be trained with greater precision, solving problems in specific areas to improve patient outcomes and save money and time for clinicians, administrators, and IT teams. 

One potential future path for the cloud in healthcare involves using AI/ML in radiology. Cloud-based AI platforms can process medical imaging incredibly fast, augmenting human expertise to read scans and identify issues sooner. This technology may also be able to prioritize cases to triage patient care more effectively.

Cloud technologies may also aid in advancing personalized medicine, tailoring medical treatment based on patient information, including their full medical history. Instead of relying on clinician review, AI/ML big data analytics tools can rapidly correlate patient records with massive datasets to create targeted therapies and treatment plans. 

Drug discovery and development are increasingly cloud-enabled, with scalable compute driving genomics analysis, AI-driven molecule modeling, and secure remote collaboration across research institutions. Major providers already offer healthcare-specific cloud services such as AWS HealthLake, Azure Health Data Services, and Google Cloud Healthcare API that accelerate innovation.

What Are the Main Challenges of Cloud Computing in the Healthcare Industry?

In the healthcare industry, organizations may encounter several challenges, including issues with data security and privacy, meeting regulatory compliance standards, integrating legacy systems, and addressing skills gaps.

Data Privacy and Security

Healthcare entities, which handle extremely sensitive personally identifiable information (PII), must operate under a strict compliance environment. This makes security one of the most critical aspects of cloud adoption. Cloud providers such as AWS, Azure, and GCP offer HIPAA-eligible services, signed BAAs, and advanced compliance certifications like HITRUST CSF, SOC 2 Type II, and FedRAMP. These controls cover the provider’s side of the shared responsibility model, including physical security, infrastructure hardening, and core encryption features.

However, healthcare IT leaders are responsible for configuring workloads correctly to ensure PHI remains secure. This typically includes:

• Identity and access management (IAM): Enforcing least privilege access, role-based access control (RBAC), conditional access policies, and multi-factor authentication (MFA).
• Encryption: Using provider-native tools like AWS Key Management Service (KMS), Azure Key Vault, or Google Cloud Key Management to encrypt PHI at rest and in transit, often with customer-managed keys or hardware security modules (HSMs).
• Monitoring and threat detection: Leveraging cloud-native tools such as Microsoft Sentinel, Amazon GuardDuty, or GCP Security Command Center for real-time anomaly detection and incident response.
• Audit logging and compliance monitoring: Continuous monitoring with HIPAA and HITRUST in mind, often supported by frameworks like NIST 800-53.

Data breaches remain an expensive risk for the healthcare industry, with average costs exceeding $7 million per incident according to IBM’s 2025 Cost of a Data Breach report. IT leaders who align with cloud providers on the shared responsibility model can reduce exposure while gaining stronger resiliency than with on-premises system alone.

Regulatory Compliance

Regulatory compliance is a persistent and ever-evolving challenge for the healthcare industry. In the United States, healthcare organizations must meet Health Insurance Portability and Accountability Act (HIPAA) standards to adequately protect PHI. Those who are found to be non-compliant can be subject to legal action, fines, and an erosion of public trust.

As a result, organizations must intentionally operate within the shared responsibility model. Cloud providers such as AWS, Azure, and Google Cloud Platform deliver HIPAA-eligible services, encryption, physical security, and compliance certifications. However, it is up to the healthcare organization to configure workloads correctly. This can include:

• Enforcing IAM policies
• Encrypting PHI with managed keys or HSMs
• Monitoring logs
• Applying continuous compliance checks

Clear ownership of these responsibilities is critical to ensuring HIPAA and HITRUST compliance in the cloud.

Healthcare organizations may also pursue or work with managed IT services providers who have HITRUST certification, which demonstrates proficiency with the Health Information Trust Alliance Common Security Framework (HITRUST CSF). Meeting these standards can ensure organizations stay HIPAA-compliant and meet other relevant data security and privacy standards.

Legacy System Integration and Migration

It can also be difficult for healthcare providers to move on and adapt their on-premises legacy systems, including EHR systems. Organizations that have been around for decades did not build systems with the cloud in mind, and integrating and adapting old applications and workloads can be a daunting task. 

Cloud migration experts can help healthcare organizations plan their IT modernization strategically. This ensures data access won’t be interrupted during cloud transformation projects, and optimal steps are taken to alter or rebuild applications so they’ll work effectively in the cloud. Often, the right solution will include a phased approach, in which some services remain on-premises until they can be rearchitected and moved to a new cloud environment. Regardless of how the migration is achieved, it can be expensive and time-consuming for healthcare systems to complete, especially with internal resources.

Skills Gaps

While an in-house IT team may have the expertise necessary to manage on-premises systems, or even foundational knowledge of cloud computing frameworks, organizations may find that their teams lack the specialized expertise necessary to plan, carry out, and manage a cloud migration. The intricacies can mean the difference between a successful cloud migration and one wrought with unexpected roadblocks and complications.

An IT services provider that specializes in healthcare organizations can be extremely valuable in these circumstances. Instead of worrying about hiring additional team members, IT leaders can bring in outside experts to develop a strategic roadmap, provide technical expertise within knowledge gaps, and even offer staff training so internal teams can carry on with management once the project is complete.

Overcome Cloud Adoption Challenges with TierPoint

Adopting the cloud in healthcare can be complex, but a comprehensive strategy can help healthcare systems prioritize risk reduction, compliance, and innovation in their migration. Organizations can improve the staff and patient experience without sacrificing cloud security.

With strategic guidance from TierPoint, your team can minimize downtime in your transition while meeting regulatory requirements, cutting costs, and preventing unauthorized access to critical information. Our healthcare IT experts develop the roadmap you need to confidently leverage and optimize emerging technologies.

Discover how we’ve partnered with healthcare companies to design, migrate, and manage secure cloud environments leveraging cloud platforms like AWS and Azure, as well as hybrid solutions. Reach out to learn more about how we can help you succeed anywhere in your cloud transformation journey.

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