HIT's Rising Cost and Dubious ROI

Edward Prewitt, February 25, 2013

Our latest monthly Intelligence Report, which draws on the 6,000-plus healthcare executives who are members of the HealthLeaders Media Council, is titled "Healthcare IT: Tackling Regulatory, Clinical, and Business Needs."  Why, then, is it mentioned in our weekly finance column?

Because healthcare IT is expensive. And the report reveals that it's becoming an ever bigger drain on hospital and health system bottom lines. And that an ROI from healthcare IT will be hard to find, despite the fervent hopes of healthcare executives.

Today, 40% of the 250 respondents say the operating IT budget takes up 2-3% of their organizations' overall operating revenue. But the respondents—who represent a range of C-suite leaders and VPs, including CEOs, CFOs, COOs, and CIOs—expect an upward shift in the near future. More than half (56%) say the operating IT budget will account for 4% or more of overall operating revenue, and a fifth expect IT spending to take 6% or more.

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Those percentages are historically high for healthcare, but not necessarily for other industries. You could argue that healthcare is simply catching up.

Edward Prewitt Edward Prewitt is the Editorial Director of HealthLeaders Media. Twitter
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