Healthcare News & Insights

Hospital spending to slow – except in IT

Compared to last year, fewer hospitals plan to increase capital spending in the coming months. However, much of the spending increases that are made will go toward new health IT investments. 

This year, 65% of hospitals say their capital expenditures will increase or stay flat, according to a recent survey by Premier, Inc. That’s down from 72% that said the same thing a year ago, and 69% that said so in the fall. Premier blames the drop on the nation’s current debt concerns and looming reductions in reimbursements.

While spending growth is slowing down, technology is taking up a greater portion of hospitals’ budgets than before. Nearly half (43%) of respondents said their biggest investments this year would be in IT and telecommunications. That’s compared to 35% a year ago.

What’s driving all the spending on health IT? Not surprisingly, the biggest factors were the transition to electronic health records (EHRs) and the upcoming deadline to switch to ICD-10 codes.

But other major factors include an increase in the number of hospital-employed physicians and many hospitals’ plans to become accountable care organizations. Both of those will require many organizations to upgrade their IT infrastructures.

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