The demand for technology in health systems is climbing — but will organizations increase their IT budgets in 2026?
CIOs across the country say the answer is mixed. Some are expanding budgets modestly, while others are cutting back or holding flat, with most agreeing that dollars must be used more strategically to maximize value.
At San Diego-based Sharp HealthCare, IT spending is set to decrease “fairly significantly” in fiscal year 2026 despite years of heavy investment. The system recently rolled out Workday, Epic and a cloud-native analytics and AI stack.
“While IT spending is decreasing fairly significantly in FY26, we are actually accelerating and broadening the impact of efficiencies and value by focusing on reaping the benefits of all of the incredible platforms that we have put in place,” Dan Exley, interim chief information and digital officer at the system, told Becker’s. “That’s one of the benefits of a platform-centric approach — the ability to yield numerous improvements with ease compared to coordinating across myriad point solutions.”
Others anticipate targeted growth. Whitefield, N.H.-based North Country Healthcare is planning a modest IT budget increase in 2026 as the demand for new technologies continues to grow, but CIO Darrell Bodnar emphasized the need for discipline.
“As a rural health system, we don’t have the luxury of unlimited resources, so we are prioritizing investments in areas that directly improve provider efficiency, patient access and financial sustainability,” Mr. Bodnar told Becker’s. “Our primary focus remains on AI adoption and automation — from ambient voice documentation to intelligent workflow tools that reduce provider burden and enhance patient care.”
To fund this innovation, Mr. Bodnar said the health system had to deliberately cut or consolidate spending in other areas, such as infrastructure redundancies and legacy systems, to balance demand with fiscal responsibility.
“In rural healthcare, every dollar matters, so the strategy isn’t just about spending more — it’s about spending smarter, ensuring our limited resources are directed toward technologies that truly support long-term resilience and high reliability,” he said.
Morristown, N.J.-based Atlantic Health System is taking a similar stance, aiming to remain “budget neutral” with selective increases in high-impact areas.
“Our top priorities include investments in AI-driven solutions that directly improve clinical outcomes, patient safety and workforce efficiency, such as ambient voice documentation, predictive analytics and agentic AI to reduce administrative burden,” Sunil Dadlani, executive vice president, chief information and digital transformation officer, and chief cybersecurity officer, told Becker’s. “Cybersecurity and data governance remain non-negotiable areas of continued investment.”
Seattle-based Seattle Children’s is among the organizations tightening its belt. The system is implementing a 5% IT budget reduction in 2026, according to Zafar Chaudry, MD, chief digital, AI and information officer.
“We’re shifting our approach from simply acquiring more to optimizing our existing resources,” Dr. Chaudry told Becker’s.
He said the health system’s investments will be prioritized toward consolidating its applications, enhancing its cybersecurity protocols, restructuring teams and investing in targeted IT innovation that brings clinical value.
“It’s about ensuring every dollar delivers maximum value,” Dr. Chaudry said. “The future of technology isn’t just about spending more — but about spending smarter. This approach, I believe, will make us more agile and resilient.”
Despite the differences in spending levels, CIOs largely agree on priorities: AI, cybersecurity and workflow automation remain top areas of focus, with a sharper eye on measurable outcomes and return on investment.
