COVID-19 has driven the virtualization of health care and engagement, leveraging technology to accelerate therapies, and optimize delivery. This has inspired the healthcare ecosystem to expect material increases in IT budgets and investments in emerging technologies (IoT, artificial intelligence, blockchain, etc.).
- Over 60% of healthcare respondents expect to see between 6% and 20% increase in their 2021 IT budgets while 75% of healthcare respondents expect to make material investments in emerging technologies over the next 12 to 18 months. These technology spending increases in healthcare are in stark contrast to the average annual increase in IT budgets across different industries of 3% to 4%.
- Triple Aim (cost of care, health outcomes, and experience of care) should be significantly improved by the potential material increase in technology spending. However, outcomes have been discouraging with the cost of care increasing faster than inflation, US mortality increased three years in a row and consumer experiences have not improved.
- IT budgets support annual operational needs such as salary, licenses, and infrastructure costs while investments in emerging technologies are strategic to position the enterprise for future success. That success typically includes rationalization of IT assets which reduces IT budgets. It is atypical to see secular technology spending increase.
The Bottom Line: Be outcome-focused in the infusion of the technology dollars, directing them to improve the triple aim specifically to realize the full value of the investments.
The possibility of a material increase in technology spending in healthcare has been a long time coming. However, the selection of technologies must be deliberate, integrated, and sustainable to improve the Triple Aim.