Survey Says Health-Care Providers To Boost IT Spending 2Survey Says Health-Care Providers To Boost IT Spending 2

After years of single-digit growth, U.S. health-care providers are planning to increase their IT budgets annually by more than 10% between now and 2006, according to a survey released Wednesday by market-analysis firm Datamonitor.

The key factors driving the increases are industry and government pressure to improve quality of care for patients and reduce medical errors, says Panni Kanyuk, a Datamonitor senior health-care analyst who worked on the study. "Information technology is an important tool in improving patient quality of care," she said, "and we're seeing this resonate in the market."

For its two-part study, "2004 IT Strategy In U.S. Healthcare Providers" and "2004 IT infrastructure Trends In U.S. Healthcare Providers," Datamonitor surveyed 100 U.S. health-care decision makers about their companies' IT investment plans.

Of those surveyed, 66% said they expect their IT budgets to grow more than 10% annually between 2004 and 2006. Datamonitor also found that "high, mid-tier" health-care institutions, those with 500 to 999 beds, are the most aggressive and advanced in IT investments, with a focus on technologies such as remote access for clinicians, inpatient and outpatient systems integration, and picture archiving and communications, or PACS systems.

Low, mid-tier providers--those with 250 to 499 beds--are focusing their IT efforts on integrating clinical information into a single, enterprise information repository.

The largest providers--those with 1,000 beds or more--are focusing their IT efforts on computerized physician order-entry systems, electronic medical records, and lab, radiology, and pharmacy systems. "Providers of all sizes have electronic medical records, physician order-entry systems on their minds, but the largest providers are taking the biggest steps with those technologies," Kanyuk says.

But despite the double-digit increases in IT spending planned by many health-care providers, the industry overall still lags in overall spending in IT, Kanyuk said, noting that "the financial-services sector spends about 10% of its budget on IT, but the health sector still spends about 2% to 3% on average of its operating budget on IT."