IS spending to increase

Health care systems, notoriously tightfisted when it comes to investing in information technology, will be doubling their spending over the next few years, according to a new survey of health care executives.

Nearly half (44.6%) of the respondents to the Information Systems Leadership survey plan to spend 1% to 2% of total budgets on information systems (IS), a level that has long been the industry average. Another third say they will spend 3% to 4%.

But a surprising 39.7% said they would spend between 5% and 10% on IS, while another 12.8% plan to spend more than 11%. Their top priorities include computer-based patient records, development of clinical data repositories, measuring outcomes and management of multiple managed care contracts.

These CEOs and chief information officers (CIOs) are also looking for cost-analysis management tools, tools to manage multiple payer contracts, and eligibility and benefits information. This marks a shift away from traditional IS spending for areas such as billing, accounting, payroll, and claims processing. Those areas fell to the bottom of the executives’ shopping lists.

One caveat: CEO respondents apparently don’t have much faith in their CIOs. Two-thirds (67%) of CEOs said they don’t believe their CIOs are fully prepared to meet the informational challenges facing their organizations. They criticized their CIOs for lack of initiative and strategic orientation; a bent toward process orientation at the expense of operational goals; lack of understanding of the industry, especially clinical operations and managed care; lack of management and leadership skills; and lack of "big picture" systemwide vision.

The survey was conducted by the executive search firm of Witt/Kieffer in Oak Brook, IL. It surveyed 1,000 health care CEOs, CIOs, and IS directors in hospitals, health systems, and managed care organizations last year and received a response rate of 6.4%. Despite the low response rate, the survey confirmed previous IS surveys. For a free copy of the survey results, call (630) 990-1370, Ext. 244.