Healthcare will continue to increase spending on information technology functions throughout the next four years, according to industry research estimates.
Facilities will spend up to 23% of their budgets on business processing and IT services by 2011, according to reports by Gartner, which conducts research and analysis in technology trends.
The increase represents a behavioral change as the healthcare industry turns to IT to improve communications, transparency, patient flow and data management, said John Lovelock, analyst and director of healthcare research at Gartner.
"Healthcare has seen a fundamental shift in its way of perceiving IT," he said.
In 2005, only 8% of healthcare facilities were considered "early" adopters of technology; last year, that number was 33%, a "monumental" difference in how executives perceive the need for IT to drive care delivery and operations improvements, Lovelock said.
That perception shift has led more companies to turn to outsourced IT functions, according to results from
Modern Healthcare's annual Outsourcing Survey. In its 29th year, the survey is a nonscientific look at healthcare outsourcing trends as reported by companies that provide on-site management to hospital departments, long-term-care facilities and alternate sites such as clinics and physician group practices. Fifty-five companies responded to this year's survey, up from 37 last year, and the number of clients increased across a range of services.
Information systems, which saw a 13% increase in the number of healthcare facilities served over last year on the survey, moved to 10th from 13th in the ranking of department categories.
Hospitals are increasingly relying on their contractors to provide even higher levels of service that help facilities comply with quality standards, especially as the healthcare environment opens to greater scrutiny by consumers and regulators. In many cases, that comes in the form of outsourced information technology, Lovelock said.
"IT is seen as an enabler" to increased quality and meeting regulatory pressures, he said.
There is a significant move among facilities to outsource clinical IT needs, and as that grows, contractor partnerships play a larger role in quality at healthcare facilities, said Kevin Fickenscher, chief medical officer and executive vice president of healthcare transformation for Perot Systems Corp. In its first year of participating in the survey, the Plano, Texas-based IT consulting firm ranked first in the list of top information systems contractors and appears on the top 20 list of outsourcing firms as well. The company reported a 23.6% increase in IT client facilities to 246 in 2006 from 199 in 2005.
Clients are asking IT contractors to provide the structure, software and analytical tools in categories such as quality, safety and evidence-based medicine to help the facilities turn data into the type of knowledge that has become more valuable as states and consumers continue to pressure hospitals to report on their performance, Fickenscher says. "Everyone recognizes the outcomes movement is becoming real," he says.
This means contractors are going beyond basic technology functions, such as providing hardware and office maintenance products. IT contractors now have to be prepared to offer expertise in clinical and front-office business processes in addition to high levels of technical experience, Fickenscher says.
Officials at Siemens Medical Solutions, which reported a 23.3% increase in client facilities for 2006 and is No. 3 among the top IT systems contractors, agree that the ways IT is used in hospitals is becoming more dynamic.
While cost reduction is still a large component of outsourcing contracts, the partnership between client and contractor "is more strategic," says Jim Way, vice president of managed services for the healthcare IT division at Siemens.
Healthcare providers are "definitely looking for help," he says.
View all of
Modern Healthcare's 2007 Outsourcing Survey charts
here (premium registration required).
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