Is Healthcare Underspending on IT?

Various experts estimate that Canadian healthcare organizations spend something on the order of 2% to 2.5% of their operating budgets on IT.  I have heard many of these same experts suggest that we should spend on the order of 4% to 5% of operating budgets on IT.  Indeed, I have made such statements 🙂

In conducting research for a client I came across some data on IT spending, plans, and priorities for the global airline industry.  Interestingly, for 2009, planned IT spending is 1.7% of revenue for operational IT and 1.1% for capital IT investments.  This level of spending is down from 2.2% in the previous year.

Given the extent to which the global airline industry is reliant on IT, is this level of spending a comparable benchmark for healthcare IT?   Or, perhaps, is this level of IT spending what we can expect once the health sector catches up to the airline industry in terms of use of IT in day to day operations?

I believe that there are lessons that we can learn from other industries in terms of IT use and spending.   Maybe a review of IT spending across industries can shed some light on what is needed today in the health sector and offer a glimpse of what we can expect to spend in the future.

Mike

2 responses to “Is Healthcare Underspending on IT?

  1. One of the major concerns in healthcare IT is that the industry in Canada is many years behind other industries in the implementation of IT solution to deliver service. It would be interesting to understand how much investment was made in the past by other industries to get them to a level of investment they have today?

  2. I agree with your comment. Indeed, I think that there are some important lessons to be learned from looking at the IT development history in other industries.

    Mike

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