Drug prices for Americans under 65 are projected to rise more than 11% in 2017. For consumers and health insurance companies, this is a real challenge as prescription drugs account for 10% of all healthcare spending in the United States. In an increasingly competitive landscape, where consumers can compare and choose cheaper drugs and where insurers want to pay less, pharmaceutical companies are feeling pressure to drive down costs.
In our most recent Connectivity Benchmark Report, we surveyed over 951 IT decision makers (ITDMs), and approximately 90% of healthcare IT leaders ranked the adoption of cloud technologies as an “important,” “very important,” or “extremely important” priority for 2017. Why is this so important to the healthcare industry? The typical drivers for cloud adoption (cost savings, better application scalability) are a factor, but there are also industry-specific drivers that have created a sense of urgency around healthcare organizations moving to the cloud.
In the midst of increasing competitive pressures from both incumbents and startups, companies across all industries are adopting Software as a Service (SaaS) technologies as a means of increasing operational efficiency, improving digital engagement with customers, and accelerating new product go-to-market market faster.
For organizations with decades of accumulated on-premise infrastructure and applications, adopting these technologies in a way that enables them to coexist with existing technologies presents a number of thorny, technical challenges. In particular, connectivity between on-premise and cloud systems has emerged as an obstacle that has slowed the adoption of modern cloud technologies within established enterprises.
In 2016, the Government Accountability Office, a US government watchdog, published an account of the oldest government IT systems. The average age of those systems, which handle things like our nuclear forces, our weather satellites, and incidents involving hazardous materials, is 49.8 years. The oldest system, at 56 years old, is the Internal Revenue System that handles taxpayer data and handles refunds, which is “written in assembly language code — a low-level computer code that is difficult to write and maintain — and operates on an IBM mainframe,” according to the GAO. So it’s no wonder that these legacy systems sometimes struggle to meet modern needs.
Sign up for our newsletter
