Your June 23 editorial ("Info systems are smart investment, but money must be wisely spent," p. 54) quotes a recent HCIA survey that says hospitals are spending more than 5.4% of their operating budgets on information systems. In truth, the 5.4% refers to both capital and operating expenses. Capital costs fluctuate widely from year to year, with almost all of a hospital's capital budget expended during the year a new information system is purchased, then little or none thereafter. Eventually, these capital costs are depreciated into each year's operating budget, so they should be discounted in calculating the percentage of operating budgets allocated to information systems.
Operating expenses include primarily salaries of the information systems department and vendor maintenance fees, which have historically run in the 2% range for all hospitals (regardless of bed size), a figure our firm has confirmed in more than 100 client hospitals in 10 years of consulting. Unfortunately, the HCIA survey concentrated on larger facilities and systems (average operating budget of $205 million in 1996), whose large information systems staffs bear little resemblance to the typical community hospital.
I believe you should correct this misimpression, because many hospital executives rely on your fine magazine for its excellent news coverage. In these days of tight healthcare budgets, one should not mislead executives into throwing even more money into information systems departments, consultants and vendors, who (speaking frankly as an info systems consultant) are already overpaid in many instances.
HIS Professionals, Boonton, N.J.