IT Budget and Financial Management: A Central Role for the CIO
In the current economic climate, health systems and hospitals face limited funds for technology and innovation. However, the strategic value of technology in the healthcare sector cannot be overlooked. According to Peyman Zand, CFCHE, Chief Strategy Officer at CereCore, a strong relationship between the Chief Information Officer (CIO) and Chief Financial Officer (CFO) is crucial to maximising this value.
Zand emphasises this point in an article posted on the HFMA site, where he highlights the importance of a collaborative approach between the CIO and CFO to prove the Return on Investment (ROI) of technology implementations, such as AI, virtual care, or digital health strategies.
The CereCore survey breaks down CIO priorities into four categories: Technical debt, IT staffing, infrastructure improvement, and AI implementation. Notably, technical debt, long understood as the biggest barrier to progress, is at the top of the list. CIOs are struggling with a mixture of legacy IT systems and new technology, spending an inordinate amount of time and money on maintenance and upkeep.
By factoring technical debt into financial plans, the CFO can help identify future liabilities hidden in temporary fixes. In addition, the CFO should take an active role in maximising the strategic value of technology, going beyond budget oversight to include evaluating the long-term costs of short-term IT decisions.
The CFO should also champion a comprehensive AI framework that addresses cost, ethics, risk, long-term sustainability, and appropriate-use policies. Financial oversight of AI pilot evaluations is needed to ensure that key performance indicators and ROI thresholds are established upfront.
In collaboration with the CIO, the CFO should lead IT-asset lifecycle planning and advocate for dedicated budgets to refresh aging systems. This includes evaluating opportunities to consolidate vendors, which can lower costs and simplify operations.
The need for this collaborative approach is further underscored by the fact that AI is seen as both a cause for CIO headaches and a cure. Almost a quarter of CIOs of larger hospitals and health systems identify AI as a key priority to driving savings and efficiency.
The role of the CIO should be as a strategic advisor, part of the C-Suite, tied to strategy, as stated by Andy Crowder, CHCIO, CDH-E, SVP and Chief Digital Officer for Advocate Health. This role requires the CIO to consider clinical and financial concerns alongside technology needs to push transformative ideas forward.
The HealthLeaders Chief Digital Executive Exchange (CDEX) is an invitation-only event taking place Dec. 4-5 in Washington D.C., focusing on panel discussions for teamwork needed to drive systemic transformation. The event will feature discussions with CEOs, CFOs, CMOs, and other executives on topics like driving financial performance through health IT, using technology to drive clinical quality and access, and successful transformation strategies.
However, concerns related to security/compliance issues and end-user access and support remain significant challenges. More than half of the surveyed CIOs are allocating at least 75% of their IT budget to operational expenses, a shift from around 40% in 2024. This shift suggests a growing recognition of the need for ongoing maintenance and support of existing systems.
Despite these challenges, the strategic partnership between the CIO and CFO offers a path forward for health systems seeking to leverage technology to improve patient care, drive efficiency, and remain competitive in the ever-evolving healthcare landscape.
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