CIOs expect healthcare IT spending to grow in 2017

Healthcare CIOs are more likely to increase IT spending over the next 12 months than top IT executives in other industries, as providers seek to improve efficiency and business processes.

Healthcare IT executives also say they expect to continue to struggle with significant shortages in staff with needed technology skills, according to results of a new survey from Harvey Nash/KPMG CIO Survey.

The survey of 190 healthcare CIOs shows that 52 percent anticipate increases in IT budgets over the next year, while 35 percent predict unchanged budgets. By contrast, 45 percent of CIOs from all industries say they expect budgets to rise, while 33 percent of them expect budgets to remain unchanged.

Also See: IT budgets expected to remain flat in 2017

“The Healthcare industry IT spend has been historically low, but recent high profile security breaches, concerns over regulatory compliance, increasing complexity of HIT systems and the deployment of digital and mobile health services to improve patient access, satisfaction and brand loyalty have elevated the priority and spend in the board room for near and longer term investments,” concludes a report on the survey’s findings.

Nonetheless, although 80 percent of CIOs indicate that there is a growing strategic role for IT in their organizations, compared with 67 percent from all industries, only half of those surveyed said they have a clear digital business vision and strategy, while the survey found that 39 percent of respondents were currently working on a digital business strategy.

In fact, healthcare organizations are less likely to have a digital business strategy, within business units or enterprisewide, than the all-industries average (50 percent versus 58 percent for all industries).

“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,” observed Vince Vickers, an advisory principal for healthcare and life sciences at KPMG.

“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,” he says.

However, as Vickers points out, the survey reveals that healthcare lags other industries in key technology skills. When asked in what areas their organizations are suffering from skills shortages, 45 percent of healthcare CIOs said big data/analytics, 36 percent responded project management, 30 percent indicated change management, and 29 percent cited security/resilience.

One area that is gaining interest from healthcare organizations as a “means to leapfrog to more modern technology” is cloud computing, according to Vickers. “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,” he said.

The top three reasons CIOs gave for using the cloud were to improve availability and resiliency (45 percent), to use the best solution available (35 percent) and to improve agility and responsiveness (34 percent).

Yet, at the same time, those surveyed indicated that the top three challenges to adopting cloud computing were data loss and privacy risks (55 percent), integration with existing architecture (46 percent), and legal and regulatory compliance issues (42 percent). In particular, Vickers noted that one of the challenges facing healthcare organizations is that some clinical software and electronic health record systems are still not available or optimized for the cloud.