Healthcare IT spending for healthcare providers continues to rise as they shift from carrying out organization-wide electronic health record (EHR) initiatives to supplementing EHR systems with analytics and care management functionality, according to a new IDC Health Insights report.
Supporting the assertion, 40% of healthcare IT professional responding to IDC’s 2015-2016 Healthcare Provider Technology Spend Survey said IT spending is growing. Just 25% of those surveyed attributed IT spending growth to spending on technology for EHR, however.
IDC’s new report, ¨Business Strategy: Trends and Opportunities in the U.S. Healthcare Provider Market — A Discussion of the 2015–2016 Healthcare Provider Technology Spend Survey Results,¨ delves into shifts in IT spending and investment in areas such as cloud services and clinical applications, patient engagement, revenue cycle and analytics, focusing specifically on U.S. acute-care hospitals with more than 200 beds.
Healthcare IT Spending
IDC Health Insights’ latest market research results indicate that enterprise healthcare IT spending is at the start of ¨the post-EHR/post-meaningful use era¨ in healthcare IT, IDC highlights. Respondents ¨overwhelmingly¨ reported confidence in their organizations’ ability to manage meaningful use, but were somewhat less confident about organizations’ ability to manage other healthcare reform requirements.
“This report documents the movement by providers to the Third Platform, and across cloud, mobile, and big data technologies, we saw providers making significant investment in 2015, with more planned for 2016,” research director Judy Hanover commented.
Other key takeaways for healthcare IT spending 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 their 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, the 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.
IDC Health Insights advises healthcare IT planners to consider taking the following actions as they finalize their IT budgets for 2016:
- 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.