In 2024, hospital IT areas are focused on updating systems that better reflect today’s healthcare priorities post-COVID, such as advancements in AI and other technologies. It’s no surprise that a recent survey found that 41% of healthcare organizations have increased their IT budgets.

This process of change begins with IT rationalization. Hospital IT rationalization refers to systematically evaluating and optimizing the IT infrastructure. Rationalization depends on five critical success factors:

  • A strategic roadmap. Rationalization begins with a roadmap aligned with the hospital’s overarching purpose. The end-state IT infrastructure must support the hospital’s overall objectives, such as improving patient care and access while ensuring data security. Financial management requires operational efficiency, while compliance and risk management help control costs.
  • Developing an architectural framework. Most healthcare provider organizations have amassed hundreds of applications with limited, if any, coordinated planning. As a result, many hospitals have an array of applications with overlapping functionality. Lifecycles vary. Different and costly supporting technologies are required. This leads to integration issues and inefficiencies. An architectural framework addresses interoperability, scalability, risk management, adaptability, and cost reduction.
  • Prioritizing. Existing and proposed changes need to be ranked and prioritized based on an application assessment consisting of four sections: applications that should be invested in; those that should be retained but upgraded; those that should be maintained without further investment; and those that should be eliminated because they are redundant, don’t support business objectives, or are outdated. Gartner estimates that 23% of existing hospital IT programs can be eliminated because either they are redundant, outdated, or no longer support business objectives.
  • Managing the transition. As new technologies are added and old ones removed, constant assessment is required around the integration of new technologies, data integrity and security, and staff training and support. During the transition, it is imperative to maintain the continuity and quality of patient care. No doubt, any disruption in IT services can lead to delays in treatment, medication errors, or other patient safety concerns.
  • Managing IT costs going forward. This requires analyzing all costs associated with IT (including hardware, software, and staffing) and identifying areas where expenses can be reduced without compromising quality or security. Periodic reviews help avoid cost creep or redundancies and identify systems that are becoming obsolete. Implementing a new IT system is a significant financial investment. Budget overruns are common, and there are often unexpected costs. It’s an ongoing challenge for hospitals to manage these costs while maintaining their other operational and clinical responsibilities.

Successful rationalization is worth the discipline

Without the discipline that is achieved by adhering to these five success factors, healthcare providers risk spending exorbitant amounts of time and resources on technologies while margins and outcomes remain challenged. 

The benefits of these five success factors are that hospitals have better success at creating an IT ecosystem that is efficient, cost-effective, flexible, and scalable to adapt to the rapidly evolving healthcare landscape. 

Innovative Consulting Group