AWS for Industries
Cost Optimization for Healthcare on AWS
The healthcare industry is increasingly migrating to the cloud to enhance service delivery, ensure compliance, and improve patient outcomes. However, managing cloud costs effectively is crucial to maximize the value of these investments.
Healthcare applications often have unique requirements that make them challenging to refactor into serverless or containerized architectures. These applications may have dependencies and licensing constraints necessitating a minimum number of machines running at all times.
Additionally, healthcare systems typically experience predictable traffic patterns, with increased activity during the day and decreased activity at night. To ensure continuous availability, especially for patient care providers, a minimum number of machines must be maintained for disaster recovery purposes.
The flexibility of the cloud allows health systems to meet these minimum requirements, even as they change. For example, Amazon Elastic Compute Cloud (Amazon EC2) reduces the time required to obtain and boot new server instances to minutes, allowing you to quickly scale capacity, both up and down, as your computing requirements change. This fundamentally changes the economics of computing by allowing you to pay only for the capacity that you actually use.
Core Cost Optimization Strategies
Amazon Web Services (AWS) offers a suite of services and strategies to help Healthcare organizations optimize their cloud expenditures while maintaining high performance and reliability.
Right Sizing: The first step in cost optimization is to ensure that resources are appropriately sized for the workload. Upon migrating electronic health records (EHR) and other critical applications to the cloud, many Healthcare organizations discover that their initial hardware specifications were overprovisioned. This realization leads to the immediate scaling down of Amazon EC2 instances, aligning resource allocation with actual needs.
Following are some AWS services that can help provide insights into optimal instance types and sizes, helping organizations make informed decisions about right-sizing their resources:
- Amazon CloudWatch: Allows monitoring of key performance indicators such as CPU utilization, memory usage, and network throughput across AWS resources, aiding in informed decisions about resource optimization and scaling.
- AWS Cost Explorer: Offers rightsizing recommendations to identify and adjust over-provisioned resources, potentially reducing costs by suggesting more cost-effective instance types based on workload patterns.
- AWS Compute Optimizer: Provides downsizing recommendations within or across instance families, upsizing recommendations to remove performance bottlenecks, and recommendations for EC2 instances that are part of an Auto Scaling group.
- AWS Trusted Advisor: Continuously evaluates your AWS environment using best practice checks across the categories of cloud cost optimization, performance, resilience, security, operational excellence, and service limits, and recommends actions to remediate any deviations from best practices.
Additionally, healthcare customers can consider switching to AWS Graviton2-powered instances for better price-performance ratios. Telescope Health, a physician-led healthcare solutions company, partnered with SourceFuse to develop a SaaS-based, multi-tenant virtual care application. By migrating to AWS Graviton processors, they achieved a 40 percent better price-to-performance ratio compared to x86 architecture. This migration resulted in significant cost savings and enhanced performance for their virtual care application
Savings Plans and Reserved Instances: After achieving a “right-sized state,” Healthcare organizations can further optimize costs by purchasing Savings Plans. These plans offer significant discounts—up to 72 percent compared to on-demand pricing—in exchange for a one- or three-year commitment to specific usage patterns.
Savings Plans are generally recommended for compute services, while Amazon EC2 Reserved Instances (RI) are suitable for Amazon Relational Database Service (Amazon RDS). Customers can view their Savings Plan recommendations in the AWS Management Console, which analyzes their usage patterns and suggests commitment levels for potential cost savings.
Storage Optimization: With cloud storage you can adjust on the fly and use what storage you need now, without being locked into another hardware refresh. This also allows for you to be able to cost-optimize your data storage practices as your data continues to grow. A few strategies for this include:
- Offload static data from applications into cost-effective object storage with Amazon Simple Storage Service (Amazon S3).
- Amazon S3 Lifecycle Rules: Automatically move data based on their usage patterns. Infrequently accessed data can be transitioned from standard Amazon S3 storage to Infrequent Access or Glacier storage classes (Glacier Flexible Retrieval or Glacier Deep Archive) to significantly reduce storage costs. As data continues to grow you can see significant cost savings by pushing archival data to the Glacier storage classes and only keeping frequently access data in S3 Standard.
- Amazon S3 Intelligent-Tiering: Automate the process of moving objects between access tiers to optimize storage costs.
Leveraging FinOps for Efficiency and Savings
As Healthcare organizations increasingly migrate to the cloud, evolving Financial Operations (FinOps) practices have become essential. These practices not only monitor costs but also maximize the value derived from cloud technologies. By adopting strategic approaches, healthcare providers can achieve significant cost reductions while maintaining or even enhancing performance compared to on-premises setups.
Long-Standing Commitment of AWS to Cost Optimization
Cost optimization, like security, is a shared responsibility at AWS. AWS builders are pushed to not only build, scale, and innovate, but also to find more efficient ways to continue that innovation. AWS has been relentless in developing new ways to increase performance while lowering costs across nearly every customer use case and solution area. AWS has achieved cost saving from foundational IT building blocks of compute and data stores, to advanced analytics, artificial intelligence (AI), machine learning (ML), and so much more.
AWS has been committed to cost optimization since its inception in 2006, reducing prices 151 times as of November 14, 2024. This dedication is evident in the development of services like the Cost Optimization Hub, which centralizes over 15 types of cost-saving recommendations, including EC2 instance rightsizing, Graviton migration, and Savings Plans.
Conclusion
Cost optimization on AWS is a continuous journey, not a destination. By implementing strategies (such as right-sizing resources), leveraging Savings Plans, Amazon EC2 Reserved Instances, and optimizing storage, healthcare organizations can significantly reduce costs. They can accomplish it all while maintaining or improving application performance and reliability. Regularly reviewing cloud spending and utilizing AWS services can help achieve these goals.
Take the first step in moving a workload to AWS, talk with an AWS expert to learn how you can start saving today.