TRADITIONAL
• Reactive Outsourcing/Cybersecurity
• Infrastructure Upgrades
• Software Upgrades
• Outsourced IT
EXPERIMENTER
• Proactive Cyber Risk Management
• Disease/Condition Specific Investments
• Patient/Provider Experience
• Strategic Outsourcing
INNOVATOR
• Comprehensive Cyber Risk Management
• Brand Architecture
• Provider/Patient Experience
• Data Governance/Analytics
• Population Health
• Social Determinant Research
• Value-Based Care/Payer Partnerships
Capital Expenditure
1.1% to 1.6%
Operational Expenditure
3.0% to 3.4%
% of revenue
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Capital Expenditure
1.6% to 3.2%
Operational Expenditure
3.4% to 5.3%
% of revenue
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Capital Expenditure
3.2% to 5.4%
Operational Expenditure
5.3% to 6.6%
% of revenue
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DOWNLOAD THE FULL REPORT
Download the complete research report to decide which investment profile is right for your health system.
Calculating strategic investments in technology is imperative for health systems. The first step in the process – picking an investment profile and rightsizing your IT spend – is something that can be done via a prescriptive, linear process.
Three approaches to future IT spend emerge from our research, and differ based on the extent innovation is necessary to fulfilling a health system’s mission. Each approach comes with a different guide on spend as a percentage of revenue, how to design a technology team, and what types of technology to invest in.
• Population Health
• Value-Based Care
• Data Analytics
• Cyber Risk Management
TRADITIONAL
• Disease/Condition Specific
• Provider/Patient Experience
• Proactive Cybersecurity
• Business Functions Outsourced
EXPERIMENTER
• Infrastructure Upgrades
• Outsourced IT
• Reactive Cybersecurity
• Software Upgrades
INNOVATOR
GROWTH RATE IN $ SPEND
2010
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The Investment Profiles: Where do health systems go from here?
PRIVATE
EQUITY
CORPORATE
13%
78%
8%
Looking at the growth rate of health IT spend, two mass scrambles stand out. These mass scrambles kept the hospital IT spend growth rate above 0% from 2007 to 2014. Now, spend levels have barely receded with the EHR “optimization” phase, and executives wonder if IT spend will ever go down.
A Look Back at Hospital IT Spend: 2007 to 2015
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Hospitals now face a post-EHR implementation era: Absent federal incentives and directives, executives are left to decide on their own which technology investments to undertake, and whether to slow their IT spend.
Moving forward, hospital leaders must determine which investment strategy aligns with their business strategy. Our research identifies three IT investment profiles for the future—and outlines the navigating principles to help hospitals decide which profile is the best match for their organization.
THE NEXT GENERATION OF HEALTH IT SPEND:
WHERE SHOULD HEALTH
SYSTEMS INVEST?