Report: Hospitals gradually increasing IT operations budget

During recessions, fewer than 50 percent of IT organizations increase their IT operational budget, according to an August report from research firm Computer Economics. This finding was upheld in 2009 and 2010, and the Irvine, Calif.-based firm predicted the IT spending recession has largely paused with 60 percent of IT organizations now increasing their IT operational budgets.

“A decrease in the number of IT organizations reducing their budgets is also encouraging,” the report continued. “Last year, 42 percent of organizations were cutting their IT operational budgets. This year that figure dropped nearly in half, to 22 percent.”

Conducted from January to April, the study is based on input from 207 IT executives; including 8 percent of respondents identified as “Healthcare Providers.” The 26 respondents in this sector include hospitals, integrated health systems, pathology labs, nursing homes and medical practice groups.

The report noted that the recovery in IT spending is uneven across sectors. Insurance, wholesale distribution, manufacturing and healthcare providers are increasing their IT operational budgets at a rate greater than the composite sample. Healthcare provider respondents noted an average of a 3.1 percent increase in the median IT operational budget change.

The report provided subsector metrics for hospitals and integrated health systems which present benchmarks based on three years of survey data. “They share the IT spending characteristics of other healthcare organizations. These include complex payment and reimbursement arrangements and strict IT security and privacy requirements,” the report noted. “The sector requires IT staff with sector-specific skills, large patient medical records systems, mobile platforms, imaging and other systems with large data storage requirements.”

Healthcare provider organizations are characterized by complex payment and reimbursement arrangements with patients, insurance carriers, government and medical professionals. “The use of IT in delivering medical care and maintaining patient medical records requires investment in systems to ensure the security and privacy of patient data,” the report concluded. “While these characteristics drive IT investments, it is often difficult for healthcare organizations to rationalize IT investments not directly related to patient care.”

Read the executive summary by clicking here.