Health IT budget growth outpacing broader industry, Harvey Nash/KPMG survey finds

Oct. 31, 2016

Healthcare companies are more likely to increase information technology spending over the next 12 months than other industries as they aim to improve efficiency and business processes in the midst of significant skills shortages, the Harvey Nash/KPMG CIO survey found.

“Despite significant increases in IT spending in recent years, the maturity of IT investment in healthcare is still lagging versus other industries and healthcare companies know they need to catch up,” said Vince Vickers, KPMG LLP’s healthcare technology leader. “Healthcare organizations have significant operational cost pressures now more than ever, and there is an opportunity to close that gap quickly with disruptive technologies and analytic tools that open the door to the notion of the ‘creative CIO.’ The survey also revealed that the healthcare sector lagged industry averages in key technology skills.”

The survey of 190 healthcare industry CIOs found that 52 percent were seeing increases in IT budgets in the next 12 months and 35 percent expected unchanged budgets, compared with 45 percent of budgets seeing increases and 33 percent remaining unchanged across all industries.

Of the healthcare executives surveyed, 80 percent said they see a growing strategic role in their organization compared with 67 percent from all industries. Despite this more strategic role, only half of the respondents said they have a “clear digital business vision and strategy.” The survey found that 39 percent of respondents were currently working on a digital business strategy.

“Healthcare organizations are continuously confronted with new regulatory challenges and evolving business models that are forcing them to change the way they think about leveraging technology toward the cloud and digital labor that can change how work is done,” Vickers said. “Some of these changes can remove costs through automation and provide greater insight into their business from data & analytic tools. All of this is putting more pressure on CIOs to quickly and effectively sort through the best new technologies and implement them to engage patients and deliver greater efficiency. So the CIO’s role is becoming much more creative, strategic and a key to transformation in healthcare.”
Growth of the Cloud.

Cloud computing is gaining interest from healthcare organizations as a means to leapfrog to more modern technology, but some clinical software and electronic health record systems are not yet available and/or optimized for the cloud, Vickers said. Survey respondents found that the top three reasons for using the cloud were to “improve availability and resiliency” (45 percent), “best solution available” (35 percent) and to “improve agility and responsiveness” (34 percent). Challenges in cloud adoption were “data loss and privacy risks” (55 percent), “integration with existing architecture” (46 percent) and “legal and regulatory compliance issues” (42 percent), the survey said. However, “no industry has a greater opportunity than healthcare to leverage the cloud to transform its operations, reduce cost, and improve its customer satisfaction (patient care) than healthcare,” Vickers said.

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