Healthcare organizations are expected to increase their spending on information technology in 2018 by about 10 percent over the amount they spent in 2017, according to an analysis by Forrester Research.

The healthcare industry segment, however, will spend less than 3 percent of its gross output, or revenue, on technology budgets, the consultancy estimates.

The predictions for healthcare spending are included in a larger report that Forrester developed on technology budgets for 2018 in several industries. Overall, the report estimates a 5.8 percent increase in total technology budget spending in the U.S., exceeding $1.5 trillion in 2018.

Industries clustered around healthcare, industrial products, education and the energy sector will all grow their tech budgets 8 percent or more, the analysts project. IT budgets for healthcare and educational organizations will rise because of the increased technology content of the services they provide.

Fotolia

Andrew Bartels and Matthew Guarini, two analysts with Forrester Research, predict that insurance carriers will grow their tech budgets to adapt to changing business conditions. Health insurers must cope with the uncertain future of the Affordable Care Act, Bartels and Guarini note, while property and casualty insurers are pressed to meet new customer expectations by expanding their online sales, customer service and mobile applications.

Forrester estimates tech budget spending of $74 billion in 2018, up about 8.8 percent from 2017. Healthcare tech spending will benefit from strong consumer demand for these services and increased use of technology in these services, although the effects of the tax bill will partly offset these positives.

Investments in business technology will rise to $19 billion in healthcare, or about 26 percent of the total amount that healthcare organizations will spend in 2018.

However, tech budgets will represent only 2.8 percent of gross revenues in 2018, the same percentage as the consultancy estimated for 2017. This percentage has slowly declined from a high of 3.1 percent in 2014, Forrester estimates.

Finally, the analysis predicts that healthcare organizations will spend the most on tech outsourcing (35 percent of tech budget) and CIO staff costs (22 percent) in 2018.

Register or login for access to this item and much more

All Health Data Management content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access