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The Business of Hosting Healthcare
The Business of Hosting Healthcare

By Rhett Gill · 5/3/2021

Our talk with Bruce Lehrman about Involta’s business strategy contained some interesting details and pearls of wisdom. They discussed getting involved early in emerging markets, what it takes to open up a world-class data center in a new location, and what verticals have shown the most interest in Involta’s services.

Surprisingly, it was often the healthcare industry that became early adopters of these new data center locations. Lehrman said that a lot of the companies he’s worked with have been really focused on network latency from their core data centers and backup facilities to their primary hospitals and clinics. Given that some of these markets are off the beaten path, and healthcare infrastructure is often quite dated, these companies jump at the opportunity to upgrade their network capabilities.

Becoming a HIPAA Business Associate

Hosting healthcare providers isn’t for the weak of heart, however. In the U.S., anyone who touches healthcare data falls under HIPAA rules. That means becoming a HIPAA Business Associate, which entails paperwork, audits, and standards checks. Those standards include the way a company’s servers handle PHI or ePHI data. Businesses must register and qualify even if all of their services are in the cloud, and even if the data is encrypted and the host has no decryption key. In short: There are a lot of hoops to jump through when hosting anything that involves medical information.

To add to the complexity, all subcontractors who have contact with the server data are also expected to register as HIPAA Business Associates. That includes backup services, anyone providing external network monitoring, and the like. This means it’s usually more convenient to handle everything in-house unless the subcontractors are already registered with the program.

Given these barriers, it isn’t a surprise that healthcare services jump at the opportunity to find competent, modern hosting. Many companies are going to turn them down to avoid the hassle of additional government regulation.

The Rewards of Hosting Healthcare

Lehrman mentioned a positive aspect of hosting healthcare providers: The ability to forge a long-term partnership.

Sure, the initial qualification and setup might be more painful than some other clients. But once that’s done, you may very well have a client for life. Once healthcare organizations have tech that works and that meets or exceeds their needs, they’re loath to move off of it.

And on the flip side of the coin, once a HIPAA Business Associate establishes a friendly set of standards for one healthcare organization, it can be tweaked and applied to future partnerships in that vertical, all across the country. The first time is always the hardest. But that effort need not be duplicated for every new healthcare client.

A second reward is community. Lehrman has set up advisory boards for hosting healthcare providers, made up of customers and non-customers alike. He uses these roundtables to keep abreast of the market and the upcoming needs and expectations of the industry. It’s not only a valuable feedback tool, but getting back to each individual about their concerns and feedback forms a connection… current customers become more trusting customers, and non-customers might have a reason to do business with someone they trust in the future.

These benefits can lead to larger opportunities. Once one metropolitan area is taken care of, there’s a distinct possibility that the parent company will ask about opening small data centers in other parts of the country.

That’s because healthcare providers, more and more often, are interested in a different kind of hosting model. They’re looking out towards the edge.

Living on the Edge

One of the common themes seen in the business of hosting healthcare clients (and beyond) is wanting to get closer to the edge. And they aren’t talking about extreme sports, at least not in this context.

‘The edge’ should also not be confused with simple mirroring, load balancing, or redundancy operations. Although aspects of these things might be included in edge architecture, they aren’t the whole picture.

The edge is about decentralizing a data center. If a healthcare provider is dealing with highly latency-sensitive operations, such as remote laparoscopic surgery, they don’t want to go through a bunch of hoops to get to their destination. So providers find locations where they can host the client’s hardware and software as close to their demarcation point as possible. Alternatively, they set up shop at a low latency location somewhere between a healthcare organization’s headquarters and their metropolitan branch. Either way, the goal is to be as close to the ‘edge’ of the involved private networks as possible.

This can mean more geographic expansion, more location scouting, and more time dedicated to clients when you’re hosting healthcare operations. But it can also mean establishing footholds in markets that the hosting provider can later expand further if there’s a demand.

Lehrman mentioned that he’s seeing a big move towards decentralization, and within the next ten years quite a few medium to large-sized enterprises will fully take on edge networking. Involta is constantly looking at new tools and capabilities that will allow them to be as flexible as the client needs them to be.


Hosting healthcare providers can be a big investment of time and effort. Getting the proper certifications, becoming a HIPAA Business Associate, assuring the client that you meet their needs, and making the sale when the time comes are all potential challenges.

However, the effort is rewarded with many boons. Getting hungry early adopters in a new data center is a rare blessing. Selling out a decent percentage of the space so close to opening, and sometimes in advance of the official opening, can help cover costs after making such a major expenditure. And of course, having a happy local advocate that will give your business a glowing review never hurts either.

Generally speaking, the benefits of becoming a HIPAA Business Associate and getting into the business of hosting healthcare organizations far outweighs the initial time investment. Particularly in emerging markets and new data centers that could use early adopters with deep pockets.

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