This transcription is provided by artificial intelligence. We believe in technology but understand that even the smartest robots can sometimes get speech recognition wrong.
Today's episode is brought to you by EHC Consulting.
If your team is discussing public cloud options for your EHR, EHC consulting should be on your radar. With decades of epic expertise and proven cloud migration experience, they help health systems confidently plan, execute, and support their move to public cloud. Ask about one of their free guides, like where to host Epic or their Hyperdrive delivery decision matrix at this week.
health.com/ehc.
I'm Drex Deford, president of Cyber and Risk here at this week, health and the 2 29 Project. Our mission is Healthcare Transformation powered by community. Welcome to this executive interview on the UnHack Channel. Real conversations about managing risk at the highest levels.
Let's dive in.
Hey everyone. We're here at HIMSS 26. I'm Drex and this is gonna be a really great interview. I'm really gonna enjoy this conversation with Tim from EHC.
How you doing today? I'm glad you came by.
No, I'm doing great. Thanks for the invite and thanks for the time.
Yeah, for sure. I want to ask you some questions. You have really become an expert on this. Let's start though with a little bit about your background. You're at EHC now, but you made the transition from Michigan Med.
Tell me about, tell me that story and how the career has developed.
Yeah, so the story kinda starts or really goes back about 10 years when I was at Virtue Stream. I was given the mandate of go build a healthcare cloud. And so we went and built a private cloud to host Epic on that private cloud infrastructure and built a very successful business for Dell doing that.
It's since been absorbed and since been sold off, and when that process happened, a lot of us left.
I
see. I went to Michigan Medicine several of the other founders at EHC left and went to Microsoft. The. Founders at EHC that went to Microsoft, actually founded their Epic on Azure Global Black Belt Program and kind of started that initiative and kind of developed with Microsoft, this is how you do this really well.
And interestingly enough, a few HIMSS ago, we all got together. I was at Michigan they were at Microsoft, and we said, Hey. There's a real market need here.
Yeah.
There's a market need to move epic to public cloud. We can do that better than anyone. And so we formed the company shortly thereafter. But I was the CTO of Michigan Medicine.
I had been given a mandate to move them to the cloud. So I still had a lot of real work left to do there. so over the course of a couple years, I actually performed that work, moved their epic to Azure. We a lot of their general purpose workloads to cloud, move sector to cloud and started those
initiative.
It's not just epic. Like you've really become, I mean, part of why I love having conversations with people like you, you are from healthcare, you are an operator, this is the work that you have done. You become an expert in this transition from Epic to Azure, but not just epic other platforms too.
That's right.
So when we started this journey again 10 years ago. We selected Epic because we thought, well that's probably the most complicated system. You can do this, you can do anything, can system. And if you can move that,
yeah,
you should be able to move everything else. Right,
right.
And the, you fast forward 10 years to where we are now, and Epic has invested so much r and d in this Microsoft and the other public clouds have invested so much r and d into this.
You really have a very prescriptive programmatic framework. Of how to move Epic and how to stand epic up in the public cloud, that it's now arguably easier to do that application ecosystem Yeah. Than some of the other general purpose applications that are out there. But they, all of those applications can take a similar type of prescriptive method in order to move that from their current environment out into public cloud.
If you'd wanna avail yourself with a public cloud.
Sure.
We're very pro-public cloud, we see a lot of value in that. And that's similar with the automation orchestration, some of the features and functionality we see in public cloud.
Yeah.
We're super bullish on public cloud.
Yeah. So tell me about the financial model.
The money. I mean, it sounds like technically there's great, you've got a great playbook. You can help people make those moves. Financially from an ROI perspective, how do people talk about it and think about it and make those decisions inside their healthcare organizations?
Yeah, it's a great question because we actually spent quite a bit of time at my time at Michigan Medicine developing kind of a TCO model of what the on-prem costs were and what the public cloud costs would be.
we did that not only for Epic, we did it for et cetera, we did it for. Some of the other general purpose workloads, right? To try to understand if there would be a cost savings associated with it or a cost increase. We knew we were moving to public cloud 'cause we had been given that executive mandate by the president, but we wanted to know and be able to inform financial organization
what's the impact.
Yeah. What
was interesting was at the time the hypervisor costs and thin client software licensing costs and some of these costs. Started to materially change and what they did is they added fuel to the fire, if you will.
Sure.
Keeping it OnPrem
just kept getting more and more expensive.
Keeping it OnPrem. Yeah. Now, arguably is more expensive than moving it to the cloud. Right. So in my early days of moving things to the cloud, it was cloud was cheaper and then at some point in time, cloud became not as cheap or cost neutral or maybe a little bit more expensive. Now we're in this new paradigm where a lot of the TCO models certainly we've done over the last three months, have shown a very real cost savings
talk, talk about it in CapEx, opex sort of terms what, how does it work for CapEx, opex for health systems?
Right? And that, that was a, discussion point, certainly when we were at Michigan Medicine. The organization was used to spending money in a CapEx way, and they were used to things like depreciation,
right?
Which is really an accounting advantage or a tax advantage, but not necessarily an economics or an agility advantage, right?
And what I mean by that is when you look at CapEx, you tend to tie up a huge amount of capital 'cause you're building for peak. And you're building for five years of growth.
Yeah.
What that translates to is you're using very little of your infrastructure in the early years and the, in the later years, you may be using some of that infrastructure, but it's aged infrastructure.
Right.
In a cloud economic model, you can build out that infrastructure as you need it. So the economics actually make much better sense. Than a CapEx opex. And what we can see is if you factor in things like cost of capital and you can factor in things like a five year view of the spend cloud actually makes a lot more sense to A CFO than a CapEx product
if you pay the bill as you need it.
The other thing about CapEx I always struggled with was the sine wave expense of some like. You had to buy a bunch of stuff and then maybe you didn't buy anything for another four or five years, and then you had to buy a bunch of stuff to replace or upgrade. And it was always, that was always a struggle with the CFO.
That's right. And we saw that. We've seen that for quite some time. Those huge peaks and valleys are really hard for healthcare organizations to plan for.
Predict.
Yeah.
And a lot of times you'd miss the mark.
Right.
So just as a, an epic example, if you're gonna. Set aside $20 million to do it.
Epic refresh. It's really hard to walk into the CFO's office a year or two later and go, oops I didn't calculate that quite right. Yeah. And I need another two or three or $4 billion in order to upgrade compute and upgrade storage,
right?
What cloud enables you to do is it enables you to slowly, incrementally increase that spend as you need it, and you can do that with a dial.
It's super easy. To change out that infrastructure and take advantage of the latest and greatest in cloud. It's very difficult, if not impossible to do that in an upfront model.
Yeah. So talk to me about cybersecurity and the better, worse What are the things that come up when you talk about cybersecurity in this model?
Yeah, so I love I, I love talking about cybersecurity. Certainly at Michigan Medicine, what we saw. Was the network or the infrastructure had been built out over the last 20 or 30 years and 30 years ago, network infrastructures, you wanted everything to talk to with each other,
right? Right.
And now you don't.
Right? Because there's bad people that if they get access to one thing, they'll do bad things. So what was wonderful about our cloud journey at Michigan Medicine was we were able to do segmentation in a very different way. So we were able to basically shrink, wrap our Epic environment and put that in the cloud.
So only things that were supposed to talk to Epic and talk to it. We did the same thing with Sectra. We were also able, with our general purpose workloads, we could categorize the type of workloads that existed and the data characteristics of those workloads.
And that enabled us to put security policies over the top of it. To say what those workloads could and couldn't do. Just as an example, whether they were internet facing or not, or whether they could have a, you know, a network card or not, or some of those policies we could programmatically put in place that if someone went out there and tried to change that or made a mistake and enabled something they weren't supposed to, that policy would catch it.
We'd get alerts. The IT team would immediately respond to it. So we looked at it as a much more secure model in the cloud than what we had in our on-prem environment. And part of the cloud migration effort was viewed at least by the CISO as a security initiative.
It's the cleanup fix up of all the legacy stuff that you've done OnPrem over the years.
That's exactly, yeah. So it was very much embraced by the CISO and the security team because it was an opportunity to overhaul the infrastructure. And make it much more secure.
That's great. I wanna leave an opportunity here. Is there anything else that I haven't asked you about that you want to talk about before we wrap up?
Well, one of the things that I talk about when I'm talking to healthcare organizations that are really focused on moving to the cloud is I always emphasize that's really the beginning of the journey. One of the reasons, and one of the values we find in public cloud is all of the tools and technologies that are ready made.
These are tools and technologies that an on-prem system doesn't have, such as data lakes or open AI fabrics and things that healthcare systems want to avail themselves of, but may not have the cycles or the resources in order to spin those things up. Right? So one of the fun things that we have at EC consulting is as we move epic environments to public cloud, we then get to enable and work with the healthcare system to say,
how do we really drive value? You for patient care. Yeah. It's not about the network operations or the infrastructure or the security all, although that all of that stuff is important, but how do we then begin to take advantage of things that can deliver value back to the organization?
That's great.
And that's really what gets us excited and that's why we're so bullish on public cloud.
That value plus model is really important. It's not just about moving to the cloud, getting the benefits of that. What you're saying is just. There's all these other things you can do once you're in the cloud, there's all these other new, cool capabilities you can take advantage of.
That's right.
Yeah.
That's great. Hey, thanks for thanks for stopping by today. I'm glad you're here. And enjoy the rest of hims while you're here.
Yeah, Drex, thanks so much for the time. I really do appreciate it.
Thanks for joining this executive interview on UnHack with me Drex Deford here this week. Health, we believe every healthcare leader needs a community to lean on and learn from. Build your network at this week, health.com/subscribe and share this with a colleague because together we're stronger.