Is There a Cure for Healthcare’s IT Point of Pain?

By David Smith, CFO, Anatomy IT
LinkedIn: David F. Smith III
LinkedIn: Anatomy IT

In a climate of digital transformation, cyberattacks, and electronic health records (EHRs) integration, investment in healthcare information technology has continued to grow in volume, complexity, and importance.

For example, between 2019 and 2023, health system executives reported digital and IT budgets increased by an average of 18.3%, with one-in-five citing increases of more than 30%, according to Guidehouse. Additionally, 85% of health systems report that they are increasing their 2024 digital and IT budgets, and nearly 50% predict moderate to significant increases.

However, a separate survey revealed that 44% of healthcare CIOs say retaining and budgeting for qualified IT resources is their greatest operational challenge related to IT in their hospitals. Indeed, experienced, well-trained staff are essential to ensure that IT systems perform as expected and protect all relevant data.

A recent advisory from the U.S. Department of Health and Human Services illustrated the threat that cyberattacks and data breaches represent for hospitals, noting that ransomware attacks against health systems nearly doubled from 25 to 46 between 2022 and 2023. These statistics are likely understatements, as some hospitals may simply pay hackers’ ransom demands without reporting the incidents to authorities.

While there are health IT solutions that are intended to help providers overcome these challenges, these systems often require a heavy investment of time and attention from IT staff. As IT infrastructure continues to expand, so does the time health systems spend on maintenance, system updates, and technical support at all hours of the day.

To ensure that platforms and applications are properly functioning, and data is safe from hackers, health systems traditionally have hired additional IT experts to manage their systems. More recently, though, the supply of IT talent is becoming stretched thin, and health systems often cannot afford to competitively recruit these professionals against companies in other industries.

As a result, more provider groups are asking themselves whether it still makes sense to shoulder the IT burden. As they grow more reliant on digital technologies to drive operations and patient care, at the same time that the risk of cyberattacks is growing, more health systems are concluding that it is time to shift IT responsibilities to specialized partners, enabling them to direct a larger share of resources toward their missions.

4 reasons to outsource IT services

For many health systems, the well-documented staffing shortages that have affected much of the industry in recent years have further reduced the feasibility of in-house IT management, given the need of many providers to devote more resources to making up for shortfalls among patient-facing employees.

A Black Book Research report illustrates the trend, revealing that 59% of hospitals with over 150 beds report that they are strategically choosing to increase nonclinical outsourcing in 2024. IT-managed services represented the largest segment of outsourced nonclinical services that Black Book measured, totaling $60 billion in 2023.

Following are four major benefits of transitioning IT services from health systems to IT-managed services partners:

Savings: By partnering with managed services firms, providers gain the opportunity to convert fixed IT into variable costs, paying only for the services they use. This eliminates the need for large upfront IT investments, allowing organizations to ramp up staff for major implementations and then scale down when clinicians and staff have transitioned to a new platform.

Specialized expertise: Firms that specialize in working with healthcare delivery organizations boast teams of experts who understand the healthcare industry’s unique challenges and compliance requirements. Further, these professionals can share best practices learned from other clients that can be applied more broadly to additional organizations.

Focus on what’s important: Issues with technology and related workflows can create non-productive, non-reimbursed hours for clinicians, impeding them from delivering high-quality care. A qualified, specialized IT-managed services partner can help remove IT disruptions from clinician workflows without major platform or application overhauls.

Scalability and flexibility: For some providers, enterprise-wide growth is constrained by limited internal IT resources. In contrast, service partners can help providers increase scale more quickly by plugging in staff to accommodate a new facility launch, post-M&A integration, and then wind down as needed.

Where to start

While the benefits of adding an IT-managed services partner are clear, they inevitably vary based on an organization’s size, background, and goals. Consequently, it is essential that provider executives calculate potential return on investment prior to making such a dramatic operational shift. At a high level, there are three key components of an ROI estimate:

  • Calculate the total costs of operating an in-house IT support function, including salaries, benefits, equipment, software, and other costs related to IT, but may not be reported in the IT department.
  • Determine the cost of managed IT services, including the hard-dollar partner fees. Then subtract tangible and intangible benefits, such as improved response time, elimination of clinician downtime, and time spent on cybersecurity training, compliance, and mitigation.
  • Assign a low, medium, and high value to each benefit, which will vary depending on the organization, challenges, and growth strategy.


With little relief in sight for health systems, health IT continues to consume a greater share of budget, time, and resources. Some health systems may prefer to keep IT services in-house to maintain a feeling of greater control, but often this factor is outweighed by the need to invest in other areas, such as patient care, more central to their missions.

As a result, healthcare organizations are increasingly looking to experienced, specialized partners that can deliver the same level of control and accountability while offering a boost in much-needed resources and expertise.