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40% of Providers Report IT Budgets are Still Growing

by Fred Pennic 02/02/2016 Leave a Comment

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Hospital CFO_New Financing Program Minimizes Impact of ICD-10 Revenue Delay for Private Practices

40% of providers reported their IT budgets are still growing with only 25% of providers with growing budgets attribute the growth to EHRs, according to a new IDC Health Insights report. The new survey specifically examines technology spending and planned technology spending by U.S. acute care hospitals with more than 200 beds.

Key findings indicate that the post-EHR era is upon us as providers turn to optimizing the business for accountable care, adding analytics and care management, and away from massive enterprise EHR projects. The hospitals responding to the survey overwhelmingly reported confidence in their ability to manage meaningful use. Hospitals were somewhat less confident in their ability to manage healthcare reform requirements other than meaningful use.

Key Findings

Additional key findings from the new report include:

– Across all of the technologies examined in the survey, providers are taking advantage of more cloud implementations and leveraging mobile and analytics capabilities in the cloud. While 50% of software spending growth is still directed toward on-premise investments, survey respondents reported that 18% of new software spend is going into software as a service (SaaS) and 24% is going into projects that leverage managed hosting by a third party.

– Comfort levels with cloud are growing. Across all hospitals, 30% of the respondents said they were comfortable with cloud in 2014, while an additional 41.5% respondents said they were more comfortable with cloud in 2015 than they were in 2014. Barriers to cloud adoption, primarily comfort levels with security and compliance, are clearly coming down.

– Across all hospitals, top reasons for budget growth included analytics, patient engagement, customer relationship management (CRM), and security.

– Security strategies are maturing. Cybersecurity is one of the new growth areas in the provider IT budget, and this growth is expected to continue in 2016. Threats are top of mind, but the increased availability of resources for IT security is allowing providers to begin to implement strategies to secure data and networks. Top priorities included focusing on security in the cloud, monitoring the environment, and controlling shadow IT.

– Analytics spending continues to grow, and big data is here to stay. Analytics continues to be one of the fastest-growing segments of the provider IT budget in 2016 as it has been for several years. Ongoing investment in ACO, clinical, and quality will continue in 2016, but hot areas of new analytics investment reported also include provider and care team performance analytics, as well as analytics that examine referral patterns and other financial analytics areas.

Key Recommendations for Providers

As providers finalize planning for 2016, the results from this study should add to the forward-looking predictions found in IDC FutureScape: Worldwide Healthcare 2016 Predictions, which provide a benchmark on the activities of peer organizations in the industry. IDC Health Insights recommends that planners consider the following key actions:

– Align investment plans with enterprise strategy.

– Evaluate your planned strategy for opportunities to leverage the 3rd Platform.

– Look holistically at topics like operating cost, productivity, and efficiency for investments with return on investment (ROI) in these areas, which may or may not involve modifications or enhancements to the EHR.

– Increased availability of resources for IT security is allowing providers to begin to implement strategies to secure data and networks.

– Continue to grow expertise and application portfolios where gaps exist in hot new areas including provider and care team performance analytics, as well as analytics that examine referral patterns and other financial analytics areas to drive competitive advantage.

– New spending will be directed toward optimizing IT departments, right staffing, and adding resources that help make IT more efficient or bring skills needed for the 3rd Platform.

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