Healthcare Insights
Average hospital IT expenses
Hospitals and healthcare systems use hundreds of different software and information technology (IT) vendors functions from the everyday, such as patient scheduling and systems management, to advanced features, such as imaging technologies or artificial intelligence.
What are the common types of IT in hospitals?
Hospitals use business and clinical software across departments, including solutions for:
- Artificial intelligence (AI)
- Bed management
- Data mining
- Diagnostic imaging
- Electronic health records (EHRs)
- Nurse scheduling
- Revenue cycle management
These solutions cost anywhere from hundreds of thousands to millions of dollars, which in turn significantly impacts a hospital’s balance sheet, budget, and spending ability.
What are hospital IT expenses?
In the Definitive Healthcare HospitalView product, estimated IT operating expenses are a proprietary calculation based on a facility’s size, services, and the data they provide in the Medicare Cost Report.
In this Healthcare Insight, we review the average IT expenses at U.S. hospitals and compare metrics by hospital bed size and location. Data is aggregated from the last seven calendar years of hospital financial performance tracked in our database.
Average hospital IT expenses 2017 - 2023
Fig. 1 Data is from the Definitive Healthcare HospitalView product and sourced from the Medicare Cost Report with estimated IT expenditures based on proprietary calculations. Accessed January 2025.
What is the average hospital IT operating expense?
Based on data from more than 5,000 U.S. hospitals in HospitalView, the average hospital IT expense for U.S. hospitals in 2023 was $9.51 million. When factoring in IT expenses from 2017 – 2023, the average hospital IT operating expense was about $7.97 million.
What percentage of total expenses do hospitals spend on healthcare IT?
In 2023, hospital IT expenses are estimated to be about 2.29% of a hospital’s total operating expense.
Hospital IT expenses by bed size
Fig. 2 Data is from the Definitive Healthcare HospitalView product and sourced from the Medicare Cost Report with estimated IT expenditures based on proprietary calculations. Accessed January 2025.
How do hospital IT expenses break down by bed size?
Hospitals with 25 beds or fewer spend approximately $1 million for IT solutions, compared to hospitals with more than 250 beds, which spend more than $33 million on average.
Hospital IT expenses by region
Fig. 3 Data is from the Definitive Healthcare HospitalView product and sourced from the Medicare Cost Report with estimated IT expenditures based on proprietary calculations. Accessed January 2025.
How do hospital IT expenses break down by region?
Hospitals in the northeastern United States have the highest estimated IT expenses, with an average of $17 million reported for 2023. Large cities, such as New York City, and metropolitan regions in states such as New Jersey and Massachusetts, have large hospitals that contribute to the higher averages in the northeast region.
Why are hospital IT expenses important?
Healthcare IT solutions are more than free Wi-Fi in a hospital waiting room. In a hospital, IT systems help professionals maintain accurate, up-to-date patient records, streamline and automate repetitive tasks, keep patient data secure, improve patient outcomes, and much more.
For healthcare providers and organizations looking to collaborate with (or compete against) hospitals in a specific market, tracking IT expenses offers insight into a facility’s priorities, challenges, and overall operational direction. Hospitals investing heavily in IT are likely looking for innovative technologies, such as new EHRs, telehealth platforms, or AI-driven tools, and may potentially prioritize areas such as patient safety, efficiency, and regulatory compliance.
Vendors of healthcare IT solutions, such as EHR providers, telehealth platforms, or cybersecurity firms, can use this metric to gauge market demand and allocate resources effectively.
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Healthcare Insights are developed with healthcare commercial intelligence from the Definitive Healthcare platform. Want even more insights? Start a free trial now and get access to the latest healthcare commercial intelligence on hospitals, physicians and other healthcare providers.
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