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Healthcare Providers' Capital Spending Growth Expected to Dip in 2014

Rene Letourneau, for HealthLeaders Media, November 25, 2013

"There were incentives for health systems to spend faster on IT and the timeline was condensed for MU dollars and population health management. There is a natural decline now in IT spending. It will continue, but not quite to the same degree," he says.


Mark Bogen

Mark Bogen, senior vice president and CFO at South Nassau Communities Hospital in Oceanside, NY

Gilbert says providers should not expect an immediate hard dollar ROI from their IT investments and should look to reduced use and duplication of tests, imaging, and medications to find the initial value markers.

"Systems will first see the soft return on investment and then the hard return," he says. "Hard returns are going to happen over a prolonged period of time, so hospitals are looking at the soft indicators such as if the EMR keeps them from prescribing unnecessary medications."

Mark Bogen, senior vice president and CFO at South Nassau Communities Hospital, a 435-bed institution in Oceanside, NY, took that sentiment one step further when he told me he doesn't expect to ever see a full return on his organization's EMR investment.

"The hope of the EMR is that it will help to produce better outcomes and better patient satisfaction and to assist us in identifying variations in clinical practices to drive down costs," he says.

"Whether the Meaningful Use aspect will create enough return to ever cover the actual cost, I don't think it will happen. I don't think it is something that can be envisioned as paying for itself, but we will hopefully get some gains in productivity and outcomes."

As health reform takes hold and the healthcare industry moves in the direction of population health management, Gilbert believes robust capital spending on IT will be necessary despite difficult economic conditions and a squishy ROI.

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