Digital Health Records Drive Omaha Project

Partnerships between hospitals and data center providers are emerging as a formula for growth in the midwest. In the latest example of this trend, Alegent Health is partnering with CoSentry to build a 48,000 square foot data center on its campus in Omaha to store digital health records. CoSentry, an Omaha-based disaster recovery specialist, will build the facility and use half the space for its clients.

The structure of the partnership is similar to one between TEAM Companies and Iowa Health System, who are jointly building a 46,000 square foot data center in Waukee, Iowa. This approach provides new mission-critical space space for hospitals to store electronic health records, as well as expansion space for the data center partner.

President-elect Barack Obama's health care reform agenda includes plans to computerize all U.S. health records within five years. With the economy taking top priority for the moment, it's unclear when Obama's health care reform package may be taken up by Congress.

But recent data shows that only about 8 percent of U.S, hospitals and 17 percent of physicians offices have made the shift to electronic records. A mandated shift to digital health records could generate huge demand for secure data center space as the remainder of the health system moves its records online.

The Omaha project is expected to cost $26 million, and will feature four pods of data center space. Alegent will use one pod and have an option on a second, while Cosentry will use the two remaining pods for its customers.       

Alegent would have paid $17 million to build a data center half the size of the current project. Mike Steffan, president and CEO of CoSentry, said that by building a bigger facility, his company was able to get better leverage with suppliers and engineering firms. "It just jelled really nicely with what our needs were," Steffan told the Omaha World-Herald. "It made a lot of sense to expand with another data center in the area."

The project builds additional momentum for Omaha as a data center destination. In October Yahoo (YHOO) announced a major data center project in the Omaha suburb of La Vista, and last month Prairie Bunkers LLC unveiled plans to convert a World War II ammo bunkers in Hastings into data centers. A number of smaller cities in Nebraska are also seeking data center projects.