“Post EHR-era” Causes Shift in IT Investment

Updated in July 2020

After the creation of the Meaningful Use Program in 2009, hospitals began significantly investing in the implementation of electronic health records (EHRs) with the goal of benefiting from the program's financial incentives.

Greg Slabodkin at HealthData Management conjectures that hospitals began entering a “Post-EHR era” in 2016, causing a shift in the financial flow of their IT budgets. According to Definitive Healthcare data, approximately 92 percent of hospitals have implemented inpatient or ambulatory EHR systems as of July 2020.

Now, hospitals are looking to build on these investments by expanding their technology infrastructure, from telemedicine to patient portals.

Which technologies are hospitals investing in?

Some of the most common technologies hospitals are investing in include:

• Telehealth
• Electronic medical records (EMR)
• Remote patient monitoring

After the end of meaningful use, other technology-related quality measures took its place—including the Merit-Based Incentive Payment System (MIPS) and the Medicare Access and CHIP Reauthorization Act (MACRA). Through these programs, the Centers for Medicare and Medicaid Services (CMS) aims to improve patient safety, streamline clinical processes, increase care coordination, and ensure efficient use of healthcare resources.

MIPS, MACRA, and other quality improvement programs have shifted to focus on interoperability between distinct software applications as well as clinical improvement. According to IDC Health Insights, 40 percent of healthcare providers will leverage machine learning and AI-algorithm advances by the end of 2020 to improve cybersecurity.

In a 2019 study co-sponsored by Definitive Healthcare, 32 percent of hospitals reported they are currently using artificial intelligence (AI), while one-third of respondents indicated they would be instituting AI technology by 2021. Nearly 35 percent of imaging centers reported using AI technology at the time of the survey.

What percentage of hospital revenue is spent on IT?

IT operating budget accounts for about 4 percent of hospital net patient revenue on average, according to Definitive Healthcare’s Hospitals & IDNs database. Generally, the greater a hospital’s net patient revenue, the higher the IT operating budget. There seems to be little correlation between total number of staffed beds and IT operating budget.

Top 10 hospitals with the highest estimated IT operating budget

 Fig 1 Data from Definitive Healthcare’s Hospitals & IDNs database. IT operating budgets are estimated using a proprietary algorithm. Accessed July 2020.

We've estimated each hospital’s IT capital budget, shown below. Though it’s difficult to see how these budgets break down by technology type, anecdotal evidence supports the findings of the IDC survey. Definitive is constantly surveying hospitals on changes in technology infrastructure, and identified more than 160 technology implementations from July 2019 to July 2020.

Top 10 hospitals with the highest IT capital budgets

Fig 2 Data from Definitive Healthcare’s Hospitals & IDNs database. IT capital budgets taken from the most recent available Medicare Cost Report from calendar year 2019, released in March 2020. Accessed July 2020.

Learn more

Are you looking for more information on how IT vendors can target and engage high-value healthcare clients? Watch our on-demand webinar, Tracking Tech: Keep Account Intelligence and Intent Data Where You Need It Most.

In this webinar, viewers will learn to more effectively leverage technographic data, determine purchasing intent, and identify technological inconsistencies within a health system.