For years, electronic health records were the big-ticket investment for hospitals and integrated delivery systems, as they raced to cash in on meaningful use incentives.

Now it appears the bulk of EHR investment may have been made at the nation’s hospitals. IT dollars are now heading elsewhere, going to products that will help providers cope with the pressures of accountable care, patient relationship management, and optimizing and protecting their IT environments.

Investment in IT is still growing at many hospitals, but healthcare organizations now are looking at technologies that can help them take advantage of the EHR infrastructure they’ve put in place in recent years.

There’s a perceptible shift in IT investment away from EHRs and towards key technology areas, with the top drivers for budget growth being analytics, patient engagement, customer relationship management and cybersecurity, according to the results of a recent survey of about 200 hospital IT decision makers by IDC Health Insights.

CIOs and federal officials agree with the findings of the IDC survey, suggesting that hospitals are transitioning beyond meeting targets of the federal Meaningful Use program, and saying the industry is entering a “post-EHR era.”

John Halamka, MD, (left) talks to Henry Feldman, MD, at Beth Israel Deaconess Medical Center
John Halamka, MD, (left) talks to Henry Feldman, MD, at Beth Israel Deaconess Medical Center

In the “post-Meaningful Use” era the agenda has been returned to patients, providers, payers and developers, says John Halamka, MD, CIO of Beth Israel Deaconess Medical Center in Boston. “The focus is the care management medical record—my term for customer relationship management and patient engagement—mobile technologies, big data analytics, and cloud,” he says.

The shift in focus makes sense to Judy Hanover, research director for provider IT strategies at IDC. “The focus of hospitals has migrated from a laser focus on EHRs to really being able to look at the whole picture of their business and how to align their IT resources and prepare for alternative payment models.”

The research firm’s survey found that 40 percent of U.S. acute care hospitals with more than 200 beds expect their IT budgets to increase. Some 50 percent of respondents expected no spending increase in IT, and fewer than 10 percent said their IT budgets will fall.

But, it’s where they’re investing in IT that is evolving—only 25 percent of respondents from organizations with growing IT budgets say those increases will be designated for EHRs.

By contrast, the IDC survey saw big increases in other forms of technology. Big data analytics spending was the most important new spending driver overall, mentioned as an area for increased spending by 36.7 percent of respondents. Mid-sized hospitals (with 500 to 999 beds) were most likely to report analytics and big data spending investments were driving budget increases (45.2 percent of respondents).

Patient engagement strategies and CRM platforms are clearly growing in importance, with 31.6 percent of organizations recognizing the need to increase spending on these enterprise platforms. Data security is also a focus for increased spending, mentioned by 29.1 percent of hospitals overall.

Engaging patients is rising as a priority for providers, according to Hanover, who says hospitals are putting more emphasis on patient portals, mobile health apps and electronic communication that drive that engagement. “If patients don’t participate in their care, they know that the new healthcare models will not work so well,” she concludes.

Within analytics, hot areas for investment include provider and care team performance analytics, as well as analytics that examine referral patterns and other financial analytics. “It is critical for value-based care to better understand cost structures, make healthcare more cost effective and understand the targets for those changes,” Hanover says.

Further, providers are getting serious about what IDC calls the Third Platform, defined as technologies enabled by the cloud, including mobile, social and big data analytics. Based on survey results, new spending by hospitals will be directed toward optimizing IT departments, right staffing, and adding resources to gain efficiencies and bring skills needed for the Third Platform.

Those growth areas stood in contrast with the shift away from projected spending on records systems, one of the striking changes in IT investment over the past couple years, said Hanover of IDC.

“That number—25 percent—would have been 75 percent or 80 percent two or three years ago,” Hanover observes, noting that hospitals responding to the survey overwhelmingly reported confidence in their ability to manage meaningful use, but were less confident in their ability to adjust to accountable care reforms.

Large hospital systems are well on their way to fully implementing the technology required to meet meaningful use requirements, agrees Michael McCoy, MD, who recently left his position as chief health information officer of the Office of the National Coordinator for Health IT. “Those who do have technology implemented should, for the most part, only need to optimize it at this point. Thus, predictably, the need for new systems or increased budgets is reduced,” explains McCoy.

For years, corporate IT in other verticals invested 7 percent, 8 percent, or even 9 percent of their budgets in infrastructure, while hospitals were in the 1 percent to 3 percent range.

Nonetheless, in the case of Dallas-based Methodist Health System, CIO Pamela McNutt says they are still investing in EHRs and EHR optimization. However, she agrees that analytics is a top driver, as is improving interoperability.

Providers envision shifting IT investment to enable them to meet requirements of new federal reimbursement program. And even with major investment increases in recent years, healthcare organizations still lag behind in investment in their IT infrastructure. “For years, corporate IT in other verticals invested 7 percent, 8 percent, or even 9 percent of their budgets in infrastructure, while hospitals were in the 1 percent to 3 percent range,” McCoy says.

Cybersecurity is also one of the growth areas for provider IT budgets, and the trend on security spending is pointing up, Hanover predicts. Nearly half of survey respondents indicated that security was one of the top priorities for their IT budget increase. When it comes to securing data and networks, top priorities include bolstering enterprise-wide security strategies, staffing up and focusing on cybersecurity in the cloud.

Halamka states that security for Beth Israel Deaconess Medical Center has been an ongoing multi-year focus and that, “at a high level, we can say that there is shift in the way we spend, moving from capital-focused acquisition of hardware and software licenses to operating-focused services hosted in the cloud.”

Hospitals are becoming more comfortable with security in the cloud, argues Hanover. While 50 percent of software spending growth is still directed toward on-premise installations, surveyed hospitals reported that 18 percent of their new software spend is going into software-as-a-service, and 24 percent is going into projects that leverage managed hosting by a third party.

“We’re seeing that the perceptions around security concerns and the cloud are becoming manageable,” she adds. “As a result, hospitals are starting to take the cloud seriously and are making investments.”

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