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Healthcare Data Storage Options: On-Prem, Cloud, Hybrid or Multi-Cloud

Healthcare Data Storage Options

The data revolution in healthcare is driving demand for healthcare data storage options that provide data security while enabling access and propelling innovation; will your organization lead the way, or be left behind?

Up until 2020, healthcare organizations were slowly but steadily adopting digital technologies to support a patient-centered model of care. Innovations like connected medical devices, remote patient monitoring, and telemedicine came with the promise of enhanced access and improved healthcare outcomes for patients.

Then the COVID-19 pandemic happened, significantly disrupting the global healthcare industry, changing how patients choose to access care, and increasing demand for data-driven technologies that connect patients and healthcare providers.

In this new paradigm, healthcare organizations are producing and storing data more rapidly and in greater volumes than ever before. With the right healthcare data storage solutions, these organizations can minimize their healthcare data storage costs while maximizing access, utilization, and value creation.

In this blog post, we explore three healthcare data storage options: on-premise, public cloud storage, and hybrid cloud. We’ll assess the pros and cons of each storage option, then discuss how healthcare organizations can choose the best solutions to maximize their competitive advantage, both now and in the future.

What is Healthcare Data?

Health data is epidemiological information related to health conditions, reproductive outcomes, causes of death, and quality of life (McGraw-Hill).

Common types of healthcare data include:

  • Electronic Health Records (EHR) – Digital versions of patient medical charts, EHR contain information about patient health status and medical history, lab and test results, and other data.
  • Patient/Disease Registries – Patient or disease registries are databases of secondary data and clinical outcomes for a group of patients that share a specific diagnosis or condition.
  • Claims Data – Billing codes submitted by healthcare providers to insurance companies that correspond to specific diagnoses and treatments.
  • Health Surveys – Data collected by public health organizations to assess public health risks at the population level and inform the development of public health policy and practices. 
  • Picture Archiving and Communication System (PACS) – PACS is a system for capturing, storing, and accessing medical imaging data. PACS data is generated by a medical imaging device (e.g., a CT or MRI modality) and archived in healthcare data storage where it may be accessed by physicians, healthcare researchers, or other authorized persons.
  • Clinical Trials Data – Clinical trials expose patients to health-related interventions to evaluate their impact on healthcare outcomes. Clinical trial data may include the results of publicly and privately supported clinical studies, including medical device trials, drug development trials, and other categories.

Why Does Healthcare Data Storage Matter?

Healthcare organizations are re-imagining their data storage solutions to accommodate growing volumes of data, enable data access for authorized users, support innovative solutions and applications that leverage data in new ways, and enforce data security and privacy in compliance with HIPAA regulations.

Here’s why these four objectives matter for the future of healthcare organizations.

Managing Data Growth

As healthcare organizations continue to undergo digital transformation, managing data growth is a key challenge. Organizations with growing data volumes need a scalable data storage solution that’s both cost-effective and secure to manage their future growth.

Controlling Data Access

Controlling data access means ensuring that data is available when and where it is needed to support clinical care, research, claims review/adjudication, and other requirements. Healthcare data storage solutions directly impact how data may be accessed and utilized by clinicians and researchers to create value.

Enforcing HIPAA Compliance

Under the Healthcare Portability and Accountability Act (HIPAA), health data that can be tied to an individual is classified as Protected Health Information (PHI), or electronic PHI (ePHI) if the data is stored electronically.

PHI and ePHI are covered by the HIPAA data privacy rule, requiring organizations to implement physical, technical, and administrative measures to ensure their confidentiality, integrity, and availability. Choosing the right healthcare data storage solution is therefore a critical step towards achieving and maintaining HIPAA compliance.

Driving Innovation

The most powerful healthcare data storage solutions can play a major role in driving innovation. 

Organizations at the cutting edge of healthcare data analytics are leveraging data storage platforms with support for cognitive computing, predictive analytics, and machine learning applications. These learning engines can process massive datasets and extract insights that accelerate new discoveries and enhance patient care outcomes. 

Healthcare Data Storage Options: On-Prem, Cloud, or Hybrid 

Healthcare organizations have three major options when it comes to storing their health data: on-premise data storage, data storage in the public cloud, or a hybrid cloud data storage solution.

On-premise Data Storage

Overview: On-premise data storage means that healthcare data is stored in the healthcare organization’s own on-site data center. Healthcare organizations frequently gravitate towards on-premise data storage, as it allows for full control over the data storage environment.


  • Total Control Over Data: On-premise storage gives the healthcare organization complete control of how their data is stored, accessed, and secured.
  • Leveraging Cloud Technology: Healthcare organizations can leverage on-premise private cloud, virtualization technology, or hyper-converged architectures to increase the efficiency and flexibility of on-premise healthcare data storage solutions.


  • High Capital Costs: On-premise healthcare data storage solutions come with high capital costs, requiring healthcare orgs to secure data center space and purchase expensive computing equipment (servers, networking, etc.)
  • High Operating Costs: On-premise data storage also comes with high operating costs, including electricity, cooling costs, equipment maintenance and upgrades, disaster recovery arrangements, and retaining specialized staff to manage the IT infrastructure.
  • Scaling Challenges: Scalability means being able to add more storage or compute capacity to meet demand. Increasing capacity for an on-premise data center allocating more space for servers, procuring new physical server hardware and disk arrays, and paying for installation and management – it’s costly, time-consuming, and results in wasted capacity when demand is below peak levels.

Public Cloud Data Storage

Overview: Public cloud providers like AWS, Google Cloud Platform, and Microsoft Azure can provide healthcare organizations with healthcare data storage in the public cloud.


  • Low Capital Costs: Healthcare organizations who store data in the public cloud can avoid many of the capital costs associated with setting up an on-premise data center.
  • Pay Per Use Model: Public cloud service providers bill for data storage and computing resources on a pay-per-use model, making them cost-efficient and low-waste.
  • Easy to Scale: Scaling data storage in the public cloud is now an automated process. Core AWS services like S3, Amazon E2C, and Amazon Relational Database Service (RDS) all include an auto-scaling feature. Auto Scaling monitors storage consumption and automatically provisions more storage as utilization approaches the available capacity.
  • Expanding Data Access: Data stored in the public cloud may be accessed by researchers or clinicians from anywhere in the world with an Internet connection.


  • Loss of Data Control: Storing data in the public cloud means giving up some control over how the IT environment is managed, secured, and maintained.
  • Data Privacy Concerns: Healthcare organizations may have concerns about the security and privacy implications of storing data in the public cloud.
  • Downtime Risks: High-profile public cloud outages at AWS in November 2020 (The Verge) and Google Cloud in December 2020 (CRN) have exposed the risk of relying solely on public cloud infrastructure for mission-critical data services. In contrast, organizations that store health data on-premises can implement disaster recovery and failover systems that virtually guarantee 100% uptime and availability. 

Hybrid Cloud Data Storage

Overview: A hybrid cloud data storage solution includes on-premise data storage, public cloud storage, and the services needed to share data and orchestrate workloads between these environments. 


  • On-Premise Data Security: Choosing a hybrid cloud data storage allows healthcare organizations to continue storing their data in on-premise servers where they retain control over how the IT infrastructure is secured and full visibility of their HIPAA compliance status.
  • Scalable Cloud Resources: Connecting on-prem data storage with the public cloud gives healthcare organizations scalable, cost-effective access to virtual machines and computing resources that support data utilization and propel innovation.
  • Disaster Recovery: Healthcare organizations can further leverage their hybrid cloud deployments by establishing cloud-based disaster recovery protocols that maximize system uptime and data availability.


  • Data Portability Challenges: Data portability between on-premise and cloud storage is a key concern for healthcare organizations adopting a hybrid cloud data solution.
  • Complex Implementation: Deploying a hybrid cloud data storage solution is a complex process that requires some technical expertise. Healthcare organizations may rely on the experience of a third-party managed service provider to help them implement and fully realize the benefits of a hybrid cloud solution.

Choosing the Best Healthcare Data Storage Option

Healthcare organizations should invest in data storage infrastructure that addresses current needs like data security and accessibility, as well as future needs like managing data growth and driving healthcare innovation. 

That’s why hybrid cloud is the best healthcare data storage option for future-thinking organizations.

Hybrid cloud solutions allow organizations to:

  • Secure their most sensitive PHI on-premises to ensure ongoing compliance with HIPAA regulations,
  • Make anonymized and select data available around the world via public cloud,
  • Scale data storage, virtual instances, and compute resources up or down to manage data growth or cope with periods of high demand,
  • Access and leverage powerful machine learning applications and other services that interface with data to drive healthcare innovation.

Faction Multi-Cloud Solutions for Healthcare Data Storage

Faction Inc. delivers scalable multi-cloud data solutions that empower healthcare organizations to maximize the value of their data while retaining data ownership. 

Faction operates a secure, cloud-adjacent data lake where healthcare organizations can send PACS and EHR data via array-based replication. Health data is presented to all public clouds over a low-latency connection and may be analyzed using compute instances from multiple cloud providers. This approach minimizes data storage costs and avoids data egress fees while providing the data accessibility and scalable infrastructure needed to propel healthcare innovation.

Could Faction Healthcare Cloud Data Services be the best healthcare data storage option for your organization? Here’s how to find out:

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