Store These: Businesses going off-site to ensure safety and security of medical, legal, financial records

May 1, 2005

In the offices of Piedmont Allergy & Asthma Associates, things are still done the old-fashioned way.

Many of its patients' medical records are on paper charts and most of those records are at the office, said Vanessa Burke, the clinic's practice manager.

But that is not going to be the case for much longer.

The Winston-Salem clinic, part of Allergy Partners in Asheville, plans to convert its paper medical records to electronic records to save office space, Burke said. It also plans to store those records in a centrally located, secure computer system, she said.

The clinic is not alone in attempting to secure its electronic data.

Growing numbers of companies have been demanding advanced data-storage services to keep and protect their sensitive information, including medical records, legal documents and financial statements, information-technology officials said.

As a result, the business of data-storage companies and software vendors has boomed. According to IDC, an information-technology consulting company in Massachusetts, spending on information-technology systems nationally is expected to top $417 billion this year and could increase to nearly $500 billion by 2008.

Information-technology security services are "finally taking off," said Curtis Gittens, a senior research analyst for the Info-Tech Research Group, a consulting company in Ontario.

Federal laws such as the Sarbanes-Oxley Act of 2002 and the Health Insurance Portability and Accountability Act of 1996 (HIPAA) have pushed more companies to be diligent - and near paranoid - about protecting their private information, officials said,

As security systems become more affordable, "this important storage technology becomes increasingly accessible to mid-size companies," Gittens said.

Health-care providers have particular need for more security.

HIPAA, passed by Congress, aims to provide more privacy and security for patients and their medical records. To implement the law, hospitals and other medical clinics have had to restrict access to a patient's medical information, overhaul their computer systems and find better ways to safeguard patient records.

For smaller medical clinics, that means sending their electronic patient information to secure-storage companies.

Indeed, business at Data-Chambers LLC, a Winston-Salem data-storage company, has increased by about 300 percent since the fall, largely because of HIPAA, said Nicholas Kottyan, the company's chief executive. The company would not disclose financial details about its business.

"We've seen, over the past six months, a pretty significant increase" in companies interested in storing their electronic information off-site, Kottyan said. "That, quite frankly, has added a fair amount of growth on our side of the business."

The company, on Old Lexington Road, stores paper and electronic records in a secure, lead-lined bunker nearly 20 feet underground. The electronic records are protected from online computer threats, such as hackers or viruses, by proprietary computer encryption systems, Kottyan said.

DataChambers stores records for medical offices, attorneys and other businesses. It maintains about 1,000 servers to hold its electronic information, and expects to add more, Kottyan said.

"Let's face it, data is growing," he said. "We're seeing just a significant explosion in the amount of data that being retained."

Clinics such as the Brookview Women's Center in Winston-Salem have had to shift some of their electronic records to off-site centers to meet security guidelines, officials there said.

But health care isn't the only industry that's trying to put clamps on sensitive information. The Sarbanes-Oxley Act was enacted after some big financial-accounting scandals in 2001 and 2002. It requires publicly traded companies to keep strict reporting records of their finances.

Blue Rhino, a Winston-Salem propane-tank exchange and propane-fueled products company, spends about $15,000 a month to store some of its electronic data at DataChambers, according to Bob Travatello, the chief information officer at Blue Rhino.

To find an electronic storage center, "we looked for a place that was basically a bomb shelter," Travatello said. "The key here is basically security."

Outsourcing its data-storage systems is also less expensive than hiring additional information-technology employees, he said.

Information-technology officials said they expect the electronic-storage market to continue to grow.

DataChambers typically adds massive amount of computerized storage space for its clients each week, and "we don't see that slowing down," Kottyan said.

Travatello at Blue Rhino said he is not surprised at the storage industry's boom. "All it takes is a fire in a building here, and what do you do now?" he said.