FinOps: Cloud Costs Diagnosis for Healthcare Operations

Vin Gray

CTO Consulting

Strategic Consulting Information Technology Delivery

Vin is a highly experienced IT professional with expertise in service delivery and Cloud operating models, including the latest in governance, security, and IT risk management frameworks. He has delivered trusted and reliable IT operations, including managing many Cloud Platforms and SaaS Applications for a significant customer portfolio. This required implementing Cloud Economics reporting and Financial Operations (FinOps) controls to enable informed planning for Cloud placement and to facilitate detailed usage analysis to manage Cloud resource costs to internal spend budgets and to proactively ensure customers received maximum value from their Cloud investment.

The healthcare industry is undergoing a technological revolution, with cloud-based platforms becoming essential for managing electronic health records (EHRs), telemedicine services, and diagnostic imaging. While these advancements improve patient care and operational efficiency, they also bring challenges, particularly in managing cloud costs and maintaining financial accountability. Adopting FinOps—an operational framework for managing cloud costs—can help healthcare organisations gain visibility, optimise spending, and ensure compliance.

Understanding FinOps in the Healthcare Context

FinOps, short for Financial Operations, is a discipline that merges financial management and operational practices to manage cloud costs effectively. For healthcare organisations that operate in highly regulated environments and rely heavily on cloud technology, FinOps can bridge the gap between technology and finance.

Healthcare's unique requirements make the adoption of FinOps especially critical. Departments such as radiology, pathology, and administration often have distinct cloud usage patterns, making monitoring and optimising costs challenging. Moreover, stringent regulatory frameworks, such as the Australian Privacy Act, necessitate strict data security and governance, adding another layer of complexity to cloud cost management.

By implementing FinOps, healthcare organisations can ensure that their cloud spending aligns with their operational and financial objectives while maintaining compliance with regulatory standards.

Key Benefits of Adopting FinOps in Healthcare

1. Increased Visibility

One of the core principles of FinOps is enhancing visibility into cloud spending. Centralised dashboards allow healthcare organisations to monitor costs in real-time across various departments, providing a clear picture of where resources are being utilised.

For example, a radiology department using cloud-based diagnostic tools can track how much storage and computing power it consumes. Similarly, telemedicine platforms can monitor bandwidth usage to ensure that services remain cost-effective. These insights help identify inefficiencies, such as underused resources or unexpected spikes in spending, enabling timely corrective actions.

2. Enhanced Accountability

Accountability is another cornerstone of FinOps. By assigning cost ownership to specific teams or projects, healthcare organisations can foster a culture of financial responsibility. For instance, a telehealth initiative can be allocated a defined budget, with its team responsible for managing cloud expenses within that limit.

This approach ensures that every department or project team understands the financial implications of its cloud usage. When teams know their cost contributions, they are more likely to optimise their resource utilisation, reducing overall expenses and preventing budget overruns.

3. Compliance and Risk Mitigation

Healthcare organisations must adhere to strict regulatory requirements to protect sensitive patient data. FinOps frameworks can integrate compliance monitoring into cloud cost management practices, ensuring that financial and operational strategies align with regulations like the Australian Privacy Act.

Automated tools can flag potential compliance risks, such as storing sensitive data in non-compliant regions or overusing cloud services that lack adequate security measures. By proactively addressing these issues, FinOps helps healthcare providers mitigate risks while maintaining a secure and efficient cloud environment.

Practical Steps for Implementing FinOps in Healthcare

Step 1: Centralise Cloud Cost Monitoring

The first step in implementing FinOps is to establish centralised dashboards that provide a unified view of cloud costs. These dashboards should be tailored to the unique needs of healthcare organisations, offering insights into spending across departments such as radiology, pathology, and telemedicine.

Integrating tools for real-time cost tracking and trend analysis enables healthcare providers to make data-driven decisions. For example, if a diagnostic imaging platform shows consistently high usage, the organisation can evaluate whether additional resources are required or if existing usage can be optimised.

Step 2: Define and Assign Cost Ownership

FinOps thrives on accountability. Assigning cost ownership to specific teams or projects ensures that all stakeholders are aware of their financial responsibilities. Each department should have clear visibility into its spending, with metrics and benchmarks to track performance.

Providing training on FinOps principles can help healthcare teams embrace their roles in managing costs. Workshops, online modules, and regular reviews can reinforce a culture of accountability, ensuring that cost management becomes a shared responsibility.

Step 3: Build Compliance into FinOps Practices

Compliance should be a fundamental aspect of FinOps in healthcare. Collaboration between FinOps teams and compliance officers ensures that cloud spending aligns with regulatory requirements. Automated tools can simplify compliance monitoring by flagging potential risks in real-time, such as storing patient data in regions with inadequate legal protections.

Proactively addressing compliance issues reduces legal risks and builds trust with patients and stakeholders, reinforcing the organisation’s commitment to data security.

Step 4: Optimise Cloud Resource Utilisation

Optimising cloud resource utilisation is essential for reducing waste and controlling costs. FinOps teams should analyse cloud usage patterns to identify inefficiencies, such as underutilised storage or over-provisioned compute resources.

Regular cost reviews and recommendations for consolidating resources or adjusting usage can significantly reduce expenses. For example, scheduling non-urgent workloads during off-peak hours can lower costs without impacting service delivery.

Challenges and Solutions in Adopting FinOps

While the benefits of FinOps are clear, implementing it in healthcare organisations comes with challenges. Resistance to change is common, as departments may be unfamiliar with financial management practices. Targeted training and showcasing quick wins, such as immediate cost savings, can help overcome this resistance.

Another challenge is aligning financial goals with operational needs. A unified FinOps framework integrating input from both finance and IT teams ensures that strategies are practical and achievable.

Technology a Much-Needed Shot in the Arm

FinOps offers a powerful solution for healthcare organisations looking to manage cloud costs effectively while maintaining accountability and compliance. By increasing visibility, fostering accountability, and integrating compliance into cost management practices, healthcare providers can optimise their resources and enhance patient care.

As the healthcare industry embraces cloud technology, adopting FinOps is no longer a luxury—achieving sustainable growth in a competitive, technology-driven landscape is necessary.

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