Where health systems are spending IT dollars, per KLAS, Bain

Despite tight operating margins, 80 percent of healthcare organizations increased their technology spending in the past year and three-quarters expect that growth to continue, KLAS Research and Bain & Co. reported Sept. 12.

Hospital and health system leaders boosted tech spending to keep up with emerging technologies, ease labor shortages and help with cost pressures in other areas, according to the June survey of 201 healthcare executives.

Here are six other things to know from the report:

1. IT and software have increased as a top strategic priority for hospitals and health systems over the past three years, with nearly 1 in 5 saying it is No. 1. They are also spending more on it compared to 2021-22.

2. The main reasons providers are spending more on IT include technological advancements or new solutions (35 percent), labor shortages (16 percent), other financial pressures (8 percent), wage inflation (8 percent), and product or supply cost inflation (6 percent).

3. The top three IT spending priorities for hospitals and health systems are revenue cycle management (39 percent), clinical workflow optimization (34 percent) and patient engagement (29 percent).

4. While 6 percent of healthcare organizations have a generative artificial intelligence strategy today, that number is expected to grow tenfold in the next year. Academic medical centers are most likely to have such a plan in use or development.

5. The top three barriers to AI adoption for hospitals and health systems are lack of technical expertise (33 percent), regulatory and legal considerations (31 percent) and unclear benefits (31 percent).

6. The top three AI use case priorities for hospitals and health systems are clinical decision support tools (29 percent), predictive analytics and risk stratification (25 percent), and clinical workflow optimization and automation (23 percent).

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