Fewer hospitals plan to increase capital spending, but more invest in HIT

Fewer hospitals plan to increase capital spending this year than last, according to the latest "economic outlook" report by Premier Inc., a leading group purchasing organization. But among those institutions that do plan to step up their capital investments, health information technology is receiving a big boost.

In a recent Premier survey, 65 percent of respondents said their capital expenditures would rise or remain flat this year, compared with 72 percent and 69 percent who said that last spring and fall, respectively. Meanwhile, 35 percent said they'd invest less than in 2011, a big rise from the 28 percent who held that position a year ago.

In contrast to this downbeat picture, 43 percent of respondents said their biggest investments would be in IT and telecommunications, versus 35 percent a year ago.

The obvious drivers of health IT growth are the government's EHR incentive program and hospital preparations for the ICD-10 transition. Another factor might be the continuing rise in the number of hospital-employed physicians. According to the Premier survey, 61 percent of respondents said that up to half of their practicing physicians were employed by hospital-owned practices, compared to 55 percent of respondents in a similar survey last fall.

This rapid growth in employment of doctors increases the need for health IT in two ways: First, newly employed physicians need EHRs, and second, doctors hired out of private practice require interfaces to their current EHRs.

In addition, some hospitals are preparing to become accountable care organizations, which require a robust health IT infrastructure.  When Premier asked its 730 respondents to identify the biggest barriers to optimal use of healthcare resources, they said, "misaligned incentives between hospitals and physicians and a lack of data systems that effectively measure performance and connect care." So any institution that wants to take on accountable care has to be thinking about upgrading their health IT.

To learn more:
- read the Premier Inc. report

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