Across the board, independent hospitals, ambulatory care facilities and hospitals in a health system are still pursuing their CPOE and electronic medical record projects, according to a Health Industry Insights survey.
While IT projects overall have slowed down, only a handful of projects have been cancelled and high-level projects are being largely unaffected by the economic recession, said Marc Holland, program director for Health Industry Insights' Health Provider Research.
The 44 respondents were equally represented in all regions of the country and ranged in size from 1,500 beds to under 200 beds. Holland and research manager Judy Hanover conducted the survey, "The Impact of the Economic Crisis on Provider IT Budgets and Projects," in January, prior to the signing of the American Recovery and Reinvestment Act.
Seventy-five percent of the respondents reported the recession has negatively impacted their capital and/or operating budgets, with 70 percent seeing a decrease in their operating budget in the first quarter 2009 compared to just below 10 percent in September 2008. Eighty-five percent saw a decrease in their capital budget in the first quarter compared to a little more than 20 percent in September 2008.
Sixty-four percent reported the economic crisis has forced them to cancel, suspend, delay or curtail their major IT initiatives, with desktop replacements or expansion, server hardware and software upgrades, and other ancillary departmental systems installation/upgrade the hardest hit. Provider organizations keeping their PCs and servers for another year was an easy decision to make, said Holland.
Operating and capital budget reductions have resulted in IT staff hiring freezes by 55 percent of respondents. Five percent reduced their IT staff salaries, while 18 percent instituted an IT staff salary freeze.
"Consultants and systems integrators are getting cut first, before staff," Holland noted, with 34 percent reducing their number of contract employees. Despite 27 percent making cuts to their IT staff, 29 percent kept IT staffing the same.
The survey results are "as good as can be expected," he said. "Healthcare will ride out this downturn certainly impacted but a little more intact compared to other industries."
"While it is likely that the industry will not see the funds associated with the legislation begin to flow until much later this year or next, I think that hospital sentiment will change dramatically over the next few months with respect to IT investment," he said.
