In partnership with CHIME, healthsystemCIO.com has developed a blogger series featuring insights from hospital and health system CIOs and other key IT leaders representing organizations from around the country. The blogs focus on the major issues affecting CIOs, including the health IT workforce shortage, mobile device management, and federal regulations.
As today’s health systems continue to invest in information technology, the IT budgets continue to rise along with the staff to manage and support the systems. As CIOs, we struggle to get our arms around the numbers and attempt to quantify, analyze and determine what the ‘Magic Number’ is for staffing and dollars to support our infrastructure. It sort of reminds me of the TV commercial for the investment company that’s trying to determine what everybody’s retirement savings number is — we don’t want to be like the guy at the end who, “Just keeps throwing money at it … ” and hoping for the best.
While the concept of benchmarking against others sounds like a great way to compare ourselves, once you get into the details, it almost becomes an effort in futility. It may sound like a cop-out to say that we are all different, but each organization truly has different ways of approaching things, and that leads to challenges when trying to compare.
After analyzing all of the various details, I’ve concluded that looking at the IT budget as a percentage of the hospital’s budget is probably the best approach, but even this has its challenges. Certainly the size and complexity of the hospital plays into the costs associated with the systems that they own. System complexity leads to additional staffing to support it. Some have the costs of their medication dispensing cabinets in pharmacy, while others have them in the IT budget. Some allocate expenses to the various departments, while others simply keep them in IT. Certainly the dollar threshold for defining ‘Capital’ plays in, as a $500 versus a $5,000 threshold will have a dramatic impact in the percentage when you have your entire PC refreshment budget hitting your operating expense, as opposed to capital.
Establishing a peer group is really essential. Start with “system size” and complexity, narrow by EHR vendor, look for those who at are at the same HIMSS Analytics Adoption Level (EMRAM Score) and then begin looking at percentages of operating budget. If you have the luxury of having access to the various budget sub-account totals, look for areas that are outliers and begin to quantify the difference.
While there’s no perfect answer, the exercise of benchmarking and digging into the details will certainly arm you with data that can be used in justification discussions. Good luck!