The real problem isn’t the size of the check. It’s that the list of what IT departments are expected to cover keeps getting longer.
That’s the takeaway from CIOs who responded to a recent Becker’s survey on IT spending at the 200 largest U.S. health systems, where almost none said their own budget was above industry standard.
CIOs acknowledged to Becker’s that the scope of the job has outpaced spending growth — no matter how fast that spending grows.
Reid Stephan, senior vice president and CIO of Boise, Idaho-based St. Luke’s Health System, said the mismatch isn’t really about funding levels.
“IT budgets have generally increased, but the demands placed on healthcare IT organizations are growing even faster,” Mr. Stephan said. “The result is not necessarily underfunding as much as constant prioritization. Most health systems cannot fully fund every worthwhile initiative, so leaders are forced to make tradeoffs.”
Those tradeoffs show up as slower execution, delayed modernization and accumulating technical debt, Mr. Stephan said. Cybersecurity is often the clearest example: Necessary security spending can consume resources that might otherwise support new digital capabilities or AI initiatives, and the pressure to deliver more under financial constraints creates its own risk — to burnout and talent retention.
Bob Berbeco, CIO of Oskaloosa, Iowa-based Mahaska Health, said his department is well-resourced — but the underlying tension is the same.
“We are fortunate to be well supported by our leadership team in terms of both staffing and budgetary needs. I would not characterize our IT department as underfunded,” Mr. Berbeco said. “The larger challenge is that demand for technology will never level out. Cybersecurity, AI, EHR optimization, analytics, infrastructure, and operational requests will always compete for finite resources.”
Rather than lobbying for a bigger number, Mahaska Health leans on a formal process to sort competing requests.
“It is a disciplined demand management framework that helps us evaluate requests based on organizational priorities, patient and workforce impact, risk, regulatory requirements, and expected value,” Mr. Berbeco said.
That framework includes regular touchpoints with executive, operational and physician leaders to confirm the IT roadmap stays aligned with the organization’s broader priorities — allowing Mr. Berbeco’s team to stay transparent about sequencing and tradeoffs while focusing resources on what matters most.
At Jacksonville, Fla.-based Baptist Health, Aaron Miri, DHA, executive vice president and chief digital and information officer, said an adequate budget starts with proving value, not asking for more.
“Our IT budget is adequate for the priorities we have agreed upon with our leadership team, and that takes transparency, evidence and clear trade-offs,” Dr. Miri said. “As I tell my team, ‘Lead with the receipts.’”
Baptist Health benchmarks its IT spending annually against outside organizations and uses a technology business management framework to tie technology costs to business objectives, Dr. Miri said. Savings from retiring old applications and optimizing existing spending have helped keep the system’s IT cost per unit of service nearly flat year over year, even while it reinvests in AI and other priorities.
“That discipline builds leadership’s confidence in funding technology and gives us a credible basis to discuss additional resources when new demands or opportunities emerge,” Dr. Miri said. “At the end of the day, a CDIO’s job is to give the CEO clear options for funding the future and unlocking the art of the possible.”
Taken together, the three CIOs point to the same conclusion Mr. Stephan raised at the outset: the fix isn’t a bigger number so much as capacity that keeps pace with expectations.
“Technology capacity must keep pace with expectations if healthcare organizations are going to realize the full promise of digital transformation and AI,” Mr. Stephan said.
