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Is It Crunch Time Yet?

November 13, 2008
by Mark Hagland
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As the current economic downturn—now clearly a recession, even if a few fussy economists still argue that it hasn’t yet met the technical definition of a recession—grows deeper, healthcare CIOs, like CIOs in all industries, will be under growing pressure to trim or at least hold down their budgets, even as important clinical and other implementations proceed apace industry-wide.

And of course, that will mean stretching their staffs, their budgets, and their patience even farther than they’ve been stretched in the recent past. But things aren’t entirely grim, though the weather forecast is decidedly mixed. A new cross-industry survey of IT, the “TechTarget 2009 IT Priorities Survey,” as reported by yesterday, found that 37% of resurvey respondents said that staffing is the area that will be most affected by the sliding economy. The survey was conducted in mid-September, just prior to the financial crash.

What’s more, 46% of respondents to the September survey did not expect any increase in their IT budgets in 2009, with half of those respondents anticipating a decrease exceeding 10%. Since the survey was not at all healthcare-specific, and since it was conducted just before the worst of the economic downturn began to occur, we can only extrapolate on how healthcare CIOs are being affected, or potentially affected. On the other side of things, though, hospitals and health systems across the country are reporting problems obtaining capital in general; and that indicator can only be expected to worsen.

On the other hand, the SearchCIO article makes the following point: “Many industry analysts and CIOs argue that the current crisis is unlike the recession of 2001, when technology caused the bubble and IT workers paid dearly when it burst. CIOs have learned to budget lean. Forrester Research Inc. analyst Andrew Bartels believes IT is also less vulnerable to budget cuts than in 2001, because business leaders better appreciate what technology can do for their operations. They are looking to IT to help reduce costs, streamline processes, boost productivity, even generate revenue.”

And then of course, there’s the healthcare-specific element, which includes the accelerating push towards the implementation of core and advanced clinical information systems, including EMR, CPOE, eMAR, clinical decision support, data warehousing, clinical intelligence, and other applications. Thoughtful hospital and health system leaders recognize that these implementations simply must take continue to completion if the healthcare system is to become more efficient and effective, and achieve higher care quality and patient safety.

My personal prediction: CIOs will more and more be in the challenging position of having to justify their budgets, expenditures, and initiatives, even as their leadership will become increasingly key to the internal reform of the healthcare provider system, a reform that the purchasers and payers of healthcare are doing everything in their power to compel forward.

What are your experiences and perceptions of the current operating environment right now as CIOs? As our coverage of all the issues critical to CIOs moves forward at Healthcare Informatics, we’ll be keeping a close ear to the ground, seeking your input and insights, and covering the evolving landscape to give you the strategic information you’ll need to make your organizations successful in these challenging—yet in many ways for healthcare, also exciting—times.

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