Healthcare is a constantly changing industry, as patient needs evolve, new technologies and techniques emerge, and reimbursement models change.
Healthcare budgets allow leaders to plan for the future and identify priorities surrounding the care and clinical departments.
Without a doubt, healthcare directors have to juggle multiple balls when it comes to setting up an efficient budget. But what place does IT development take in the whole picture?
Тhere is definitely an increase in healthcare organizations that set aside financial resources as part of their annual financial plans. However, another big part of the industry still experiences difficulties in including IT expenses in their budgets.
In the following lines, we’ll show you a couple of industry benchmarks, and explain what you’ll have to consider when setting up your healthcare IT budget.
Industry Benchmarks on Healthcare IT Spending
It is common for practice managers to have unrealistic expectations of a healthcare IT budget. And because of that, this article would be of no help if we just say, “every healthcare organization should include IT spending in their budgets.”
We searched for industry reports and benchmarks to demonstrate what a healthy budget looks like and back it up with real-world data.
Here’s what we found, based on two reports from MGMA Cost & Revenue Report via ModernMedicine and Gartner IT Budget Report:
- The national (per the U.S.) average for healthcare IT expenditures is $32,500/per full-time provider.
The Gartner report breaks the numbers down even further, as IT spending is represented as a % of three business aspects:
IT as % of Revenue
- 2.5% All Enterprise
- 4.3% Healthcare
IT as % of Operating Expenses
- 3.3% All Enterprise
- 4.5% Healthcare
IT Spending per Employee
- $6,383 All Enterprise
- $6,820 Healthcare
Now that you have a baseline, let’s look at the steps you need to take in order to build a healthy IT budget.
7 Things to Consider When Setting Up Your IT Budget
“Let’s take care of the more important things first, and then see what’s left for IT” is definitely not the route you want to take. If you’re serious about the technological aspect of your organization (and to be honest, in this day and age, if you’re going to stay competitive, you have to be), setting a budget aside for IT endeavours should be part of those “more important things”.
If you want to create a budget that is well thought out and reflects reality, you should follow these steps:
- Get Feedback
Two things to build an adequate budget: take your time and get feedback from the staff. Since everyone uses your IT systems, the management, physicians, and office staff should be involved in the project. When you upgrade a system, it is essential to get feedback from the people who use it daily.
- Learn from the Past to Predict the Future
You already know the industry benchmarks. But what was your budget one, two, or three years ago?
Set a baseline for your IT budget regarding the current year’s expenses, and then make adjustments based on the expected changes.
Also, reviewing your IT budgets from previous years can help you see the bigger picture and how your costs varied throughout the years.
- Align Your Budget with Your Goals
No organization should spend money on IT just for the sake of it. Make sure that your budget supports your organization’s goals. In terms of IT, budgeting for IT improvements that help you achieve your bigger goals turns IT costs into practice profits.
- Don’t Forget – Your Budget is just an Estimate
Budgets are just an estimate, and your IT budget is no different. Don’t try to account for every penny. In case your projections are incorrect, you can adjust when you review your budget each month.
- Take Hardware, Software, and Replacements Into Consideration
It is common for practices to have outdated hardware and software since they don’t keep track of when to update and replace them. As a result, systems may slow down, get glitchy, or completely fail which might cause financial losses to your organization. So don’t leave these things out of the equation.
- Security, Security, Security
Healthcare providers are an attractive target for ransomware and other cybercrimes. With all the personal data that your organization processes, applying security best practices is a must-do. Here’s what you should focus on:
- Email filtering
- Antivirus software installed on all devices
- Resources encryption (emails, files, backups, patient portal, etc.)
- Backups, with at least one off-site
- Updating your systems regularly
- Maintaining and monitoring your systems
- Don’t Cut Corners
Even if training is an optional expense in your budget, not getting your employees familiar with new software or tech equipment will only save you money in the short term. However, reducing your costs by not training your staff may end up costing you more in the long run.
Staff unfamiliar with software and equipment will be slower and less productive than those trained in all systems. Furthermore, if everyone has received the appropriate training, security issues will be less likely to occur.
Rely on a Trusted Healthcare IT Partner
This could be the eighth bonus you should consider when setting up your budget.
Working with a trusted IT partner could make the whole process a lot easier, especially if you don’t have an IT department in-house.
At CloudScale365, we have the experience you need as healthcare IT partner. First of all, we can help you build a comprehensive IT plan – from your end goal and budget to which services will satisfy your organisation’s needs best.
We offer a wide range of IT solutions that will improve the technological development of your practice. Including:
- Private Cloud
- Public Cloud
- Platform as a Service
- Disaster Recovery
- Auditing & Compliance
- And more
But most importantly, we offer a free consultation to understand better your organization, its needs, and long-term goals. Only then do we proceed with building a customized plan!