HealthEdge, a company that develops and provides software solutions to insurance providers, hospitals and non-profits, is experiencing a period of rapid growth - both in terms of customer-base and data - which is forcing it to rethink how it manages and uses its technical infrastructure. Key to its plans are expanding its use of Pure Storage, which has proven cost-effective to scale, as well as reliable in protecting very sensitive, personal data.
HealthEdge’s key offering is software that processes healthcare insurance claims, which historically have required a lot of human intervention - sometimes as high as 40% to 50%. However, the company’s solutions have seen its customers able to process up to 70% to 80% of claims through automation and without any human input, which in turn frees up resources for healthcare providers that are grappling with increased costs.
Its success in the market attracted attention from Blackstone Investments, which ended up purchasing the company for $700 million back in 2020. Since then HealthEdge has acquired three other businesses, seen its employee base grow from a few hundred people to 3,000, and its data growth increase by 30% per year (and that’s just for existing customers, not to mention new customers).
diginomica sat down with Kendra Rozett McCormick, Senior Manager of Datacenter and Network Operations at HealthEdge, this week at Pure Storage’s annual user event in Las Vegas, where she explained how the vendor is helping it to scale effectively, whilst also enabling easier and faster access to data, which in turn supports its customer’s needs. McCormick said:
Our customers, health insurance companies, some nonprofits, as well as hospitals, use our software to process claims. The goal is to process those claims as quickly as possible and as accurately as possible. One of the issues we are facing is that our business is growing incredibly rapidly.
Pure has helped us, through deduplication and compression, to start to reduce some of that, while still making that data accessible to our customers and their customers. Before that massive growth, we were a Dell hyper converged environment. The problem with hyper converged is that you buy a node at a time. And in that node you have networking, heating, cooling, compute storage, all on one node. To expand any one of those things, you have to buy an entirely new node, where we were looking at about $150,000 per node. So if all I need is storage, I still have to buy that entire node. And that really was not scalable for our business to do in an affordable way at all.
So we were looking for a solution to allow us to grow our compute and our storage separately, and only pay for what we're using, to help us limit that cost that we have to pass off to our customers. We also really wanted to quantify the cost, so that we can more accurately price our product for those customers. Pure has helped us do that.
Pure’s all flash solution also means that HealthEdge has been able to access its data quickly. McCormick added:
It's a lot of data that we have to chunk through very quickly and make it accessible to our customers and therefore to their customers. We are fairly heavy on both compute and storage, but storage is growing much faster. So by using Pure Evergreen One, we're able to anticipate that growth by increasing our reserve rates. We can set our reserve rates in anticipation of upcoming growth but continue to only pay for what we're actually using, which then allows us to pass some of that cost savings off to our customers.
Data use in a healthcare environment
McCormick explained that she also has a fairly small team, with eight US-based staff and approximately eight to ten engineers based out of India. Another key advantage of Pure, according to McCormick, is that she has been able to train these engineers on the infrastructure within a short time period - as little as six months. She said:
That was really important to me as well, being able to bring a new technology in and not have it be a huge burden to my team, to scale up in order to support it properly.
Equally, given the nature of HealthEdge’s work, data security is incredibly critical to its business. The industry of healthcare is changing, with an increased focus on the use of data to shift towards personalization and pre-emptive care, rather than waiting for problems to occur and relying on expensive treatments. This will place even further onus on the likes of HealthEdge to manage and deal with data effectively and securely. McCormick added:
Clearly with healthcare, security is a number one concern. We're stewards of people's very sensitive healthcare data, their personal data, so going to a solution that provides us features and options for security was critical - like immutable storage, ransomware protection, some of the tools that we already use in VMware. Pure has been so dynamic and so flexible, that we can both use traditional security features like network segmentation, but also discover some new security features to put on top, without sacrificing performance.
And the resilience of Pure’s technology was put to the test recently, when HealthEdge suffered from an unplanned outage in one of its data centers. The company has two data centers, one in Massachusetts where it is headquartered, and one in Ohio. Both of these data centers are co-located, meaning that it doesn’t own the center, but are residents there.
McCormick described a recent scenario where somebody in one of the data centers pushed the emergency power button by mistake, which essentially shuts off all the power to that floor, bypassing the generator power. This is usually used in a situation of a fire, where all power needs to be cut. The problem was identified very quickly, the data center was back online in about 20 minutes, but the difference in how Pure Storage’s systems handled the unexpected cut-off, versus HealthEdge’s Dell Hyper Converged kit, was stark. McCormick said:
It was like pulling the power plug, which enterprise equipment generally doesn't like. We have three stacks of equipment - our Pure stack, our Dell hyper converged stack and then we had a very small legacy footprint that we're still trying to roll over. The only one that came back clean with no intervention for my data center staff was our Pure stack.
Our Dell hyper converged stack, we had some small hardware failures, we had a couple of disk failures, some dongles, stuff like that, where we had to get part repair or part replacements from Dell. And then our legacy stack was a whole nother mess. That's why we signed a new deal yesterday to double our Pure footprint, to pull that hyperconverged out of there, because I want to go to bed at night knowing that if something outside of my control happens like that happens, that my stack is going to come back.
Challenges and opportunities
When asked what have been the key learnings or challenges from working with Pure Storage and moving to an all-flash environment, McCormick said that the technical difficulties were limited. However, some culture and organizational changes were needed in order to bring HealthEdge along on the subscription journey. She said:
I think our biggest challenge with moving to the Pure platform has not been a technical challenge, it's been a conceptual challenge for our leaders and executives. It's such a new financial concept, to physically have the equipment in our data center, but at the same time get the benefits of an as-a-service, where we're only paying for what we need.
The financials of making that deal and figuring out how we pay for that, how we amortize that month after month, how we charge that back to our customers based on utilization - that's been really difficult for our executives to understand.
That's not something that's familiar to them in the industry and so it took time to pull them along, to get them on board, and I wish we were able to get them on board a lot faster so that we could expand our footprint in Pure more quickly.
It's brought so much benefit to us, particularly in being able to grow our storage separately from our compute. It's saved us so much money. I know that we're going to need more compute the rest of the year, but the cost of expanding is going to be so small compared to what we would have had to pay two years ago with our hyper converged environment.
However, now the organization is fully behind the changes, the key priority is adoption and expansion, so that HealthEdge can continue to prioritize data access for its customers. McCormick said:
I think right now we're at a place of trying to figure out how we can continue our commitment to our customers of making their data accessible for their lifetime - making it easily accessible and self-service, without the cost of that driving us off the charts. Storage can be expensive and for us it's one of our biggest costs, because we require so much storage.
Some of the new products that were announced here this week are very exciting to us. Having 75 terabytes on that single card - that is so exciting to me because I can now hopefully shrink my data center without shrinking my storage capacity. I'm looking forward to working with my team to figure out how that can help us have the amount of data we have, but slow the physical growth of our data center, and hopefully pass some of that cost savings off to our customers.