Private Cloud vs Dedicated: Choosing HIPAA Hosting

While choosing the type of hosting your company needs is complicated enough on its own, if your business requires HIPAA compliance, the question becomes far more complex. 

Using dedicated servers has been the default option for companies that need to ensure that all HIPAA regulations are followed for a long time. But with the increasing popularity of the cloud, especially its flexibility and scalability, more businesses started to wonder whether the cloud environment could be used with the same level of safety and HIPAA compliance as traditional dedicated servers. 

The answer is yes. But as there are a few specifics to consider, we should first review what HIPAA compliance is and how it relates to both dedicated and cloud servers.

HIPAA (Health Insurance Portability and Accountability Act) is a law that regulates the use of PHI (protected health information) in the United States. PHI refers to any identifiable information about a patient, from their name and date of birth to their social security number, address, phone number, etc. 

Any company that handles PHI must follow HIPAA regulations, including healthcare providers, insurance companies, and other businesses in the healthcare supply chain. It’s also required that companies ensure that their business associates (e.g., hosting providers) follow HIPAA regulations as well. 

In general, HIPAA regulations relate to the privacy of data and the security against breaches. Businesses have strict limits on how PHI data can be used and have to safeguard it against reasonably anticipated threats. 

So what does it mean for dedicated and cloud servers? 

HIPAA doesn’t specify which particular server setup companies should use. However, using a dedicated server is the easiest way to satisfy HIPAA security requirements. 

A dedicated server provides an isolated environment. As a result, your infrastructure is not shared with anyone, reducing attack surfaces, making it easier to configure a secure firewall, and helping control authentication points. 

When choosing a dedicated server, you have the most freedom in selecting hardware, software, and an operating system. You can also add cloud functionality for increased scalability without sharing.

When you host your website or application in the cloud, a set of remote servers is pooled together for computing and storage. With a public cloud, that set of resources is shared; in a private cloud, they are not. 

HIPAA compliance is much easier to achieve on a private cloud since it allows for more granular control over the infrastructure and security features. In addition, physically isolating the environment from other tenants makes HIPAA audits easier. 

That said, not everything within the private cloud environment is the hosting provider’s responsibility. For example, they might take care of the hardware, hypervisor, and operating system updates, but everything in the application layer is likely up to the customer. 

Usually, the private cloud provider would handle management and secure support systems: 

• Physical access to the data center.
• Infrastructure against external threats and cyber attacks.
• Software against malicious actors, viruses, spyware, ransomware, etc.

Potential customers can request HIPAA audits from the cloud provider, which would prove that PHI is protected throughout all the business functions. 

• A valid business associate agreement (BAA) that outlines how PHI is being protected.
• Annual HIPAA staff training.
• Tier III data center with SSAE certifications that specifies physical security measures and uptime guarantees.
• Software security practices such as firewalls, log management, intrusion detection, antiviruses, etc.
• Policies against internal threats include background checks, access audits, and onboarding/off-boarding processes.
• Data protection, such as encryption at rest, offsite backups, and disaster recovery with regular testing.

So with the HIPAA regulation in hand, should you go for a dedicated or private cloud server? 

As mentioned above, HIPAA doesn’t explicitly prohibit any particular server setup. You can be HIPAA-compliant even on a public cloud, but proving and ensuring such compliance would be much more difficult and hence is not recommended. 

Thus, the question narrows down to finding a great hosting provider that is fully compliant with HIPAA, such as Liquid Web, and then choosing between private cloud or dedicated hosting based on your business needs. 

The best use cases for a dedicated server are: 

• More granular security and configurability for businesses that have very specific infrastructure requirements.
• Traditional applications benefit from fast performance but don’t require any cloud features.

Unlike private clouds, dedicated servers are less scalable and require more investment for hardware updates. 

At Liquid Web, private cloud is served through VMware, distributing resources across virtual machines and has management tools to control, move, and expand them from a centralized interface. The best use cases for a private cloud are: 

• Testing software in multiple environments.
• eCommerce applications that require high scalability and redundancy.
• Consolidation of hosting/vendors.
• Secure and scalable environments for healthcare businesses.

Private clouds are somewhat complicated to deploy initially and cost more than a single dedicated server. However, a multi-tenant environment on Liquid Web’s Private Cloud provides full management for your deployments while keeping you on budget. 

Comparing dedicated servers and private cloud servers, we can see that they can easily satisfy HIPAA requirements with a reliable hosting provider. However, if you require isolation for your data and the flexibility and scalability of the cloud, private cloud is the right choice. There are many private cloud plans for businesses of any size, and you can adjust your scale on the fly at any time without compromising availability. 

Reach out to us at Liquid Web today. Our technicians would be happy to answer any questions regarding HIPAA Compliant Private Clouds and help you choose the most suitable VMware Private Cloud plan for your business needs.