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Survey: IT is Top Spending Priority at Nonprofit Hospitals

May 17, 2012
by Gabriel Perna
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According to a survey conducted by Fitch Ratings, a New York City-based global rating agency,  the majority of nonprofit hospitals expect capital spending to either increase, and most of them are going to spend their money on IT. The survey said factors influencing capital plans, such as potential decreases in reimbursement levels, shifting clinical practice patterns from inpatient settings to outpatient settings, and the possible implementation of the Patient Protection and Affordable Care Act (PPACA), have lead to this increase in IT expenditures.

The report’s authors say the surveyed hospitals identified IT as the highest priority capital expenditure area, since information systems allow for greater cost controls, and they can increase in the quality of care, and should help hospitals to adjust to emerging reimbursement models. Those models include pay for performance, quality incentives, and bundled payments.

 Capital expenditure levels have historically been correlated to profitability levels, the report’s authors’ caution, saying a material change in operating profitability may alter future capital plans. In addition, the authors’ indicated that one of the main drivers of consolidation among nonprofit hospitals is the potential for strategic benefits. This included increased scale of operations, diversified service mixes, and enhanced access points throughout the continuum of care.

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