Mount Sinai Health System CIO Kumar Chatani: Mapping out the health IT budget

The options in health information technology seem limitless, but all CIOs are held to a budget.

The dollar amount allocated for IT at a hospital or health system differs by organization. "If you look at large organizations that are doing well, there is a lot of room for innovation and the leadership team wants to use IT to gain a competitive advantage," says Kumar Chatani, MBA, CIO and Executive Vice President of Mount Sinai Health System, based in New York. "If an organization is distressed, they are just keeping the lights on. Managing the basic wires and pliers consumes the entire budget."

Though the IT budget number will be specific to each individual organization, guiding principles can help CIOs structure their allocated dollars and cents. For those thriving organizations that can spare revenue, depending on how technology-driven the C-suite team is, an average of four to six percent of revenue goes to IT, according to Mr. Chatani. "Spend 80 percent on infrastructure and support and the remaining 20 percent should be dedicated to innovation," he says. “But by leveraging advances in technology and being smart about our business, we can also try to move that needle so we can focus more on transforming our business, rather than just operating it.”

At Mount Sinai, Mr. Chatani has a five-year spending plan for IT, covering everything from maintenance issues such as system upgrades to the exploration of new projects. "Housekeeping activities are nonnegotiable,” said Mr. Chatani. “If you need to replace an old server, you do it. With the remaining 20 percent, you discuss opportunities to innovate with your C-suite colleagues."

One of the most important areas of Mr. Chatani's budget is IT security. "We need to be sure we are protecting our data," he says."  After you think you've done enough in the realm of IT security, the next investment would be emerging technologies." He and his team at Mount Sinai plan three to five years in advance, with 20 percent of the budget earmarked for new ideas like wearables, telemedicine, big data and digital medicine.

"Focus on the alignment between IT and business. Do that well and the budget will take care of itself," he says.

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