5 ways CIOs can improve hospital finances

Houston-based Harris Health System CIO David Chou penned an article for Forbes outlining how health IT executives can "put on their financial hat" to cut costs and generate revenue to make up for revenue declines during the pandemic.

"This is a prime opportunity for the CIO to step up and shine, since IT departments often have one of the biggest budgets," Mr. Chou writes. "CIOs will need to lead by example in several ways."

While health system CFOs and financial executives still see digital transformation and technology purchases as essential to the future of their organizations, CIOs must become savvier about how they spend. Many are postponing projects, instead of canceling them outright, and shifting funds to areas such as telehealth, remote-work capabilities and data analytics.

Mr. Chou recommends hospital and health system CIOs take the following steps to generate revenue and transform their departments:

1. Focus on providing IT services to other organizations, including rural and critical access hospitals.This could include extending their EHR systems or other solutions to the health systems without the resources to buy them on their own.

2. Pause nonessential spending on IT projects and reevaluate technology portfolios for duplication in services.

3. Prioritize core expenses until the hospital or health system has more stable finances.

4. Renegotiate contract terms and find alternative financing options for technology contracts and purchases already underway.

5. Evaluate current supply vendor relationships and keep those who are willing to partner and innovate even through the challenges of the pandemic. Combining all vendors and procurement into an integrated ecosystem is another option, according to the article.

One of the major shifts, Mr. Chou said, will be the approach to acquiring new technology. Traditionally, CIOs have purchased the best solutions to increase the number of systems departments support, which also increases expenses; now that's not sustainable.

"The philosophy should be that if existing product is good enough to deliver the outcome desired, then there should not be a need to buy another one that has a much broader range of features, many of which are unlikely to be used," he said.. "Healthcare IT departments must operate with a venture capital mentality to ensure that every technology investment produces the highest return on investment at the lowest cost."

The financial situation at health systems across the nation is evolving fast, and Mr. Chou issued a warning to CIOs that can't keep up: "IT executives who don't rise to the pressing challenges may not be in the CIO seat for much longer."

More articles on health IT:
The game-changers: 10 execs outline the defining tech of the next 10 years
Telehealth app error let patients see video of other users' visits: 4 details
Amazon deepens its healthcare presence: A timeline of the past year

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