Hospitals should increase their investments in IT to at least 3.0 to 3.5 percent of their total annual expenditure and procure more cost-effective systems that provide greater value, according to analysis from market research firm Frost & Sullivan.
“On an average, the IT budget of a hospital is about 1.5 percent of its total annual expenditure which is extremely low when compared to the budgets allocated toward devices and other hospital infrastructure,” explained Frost & Sullivan Industry Analyst S. Priyan. “IT continues to be considered as expenditure rather than an investment.”
Business analytics markets earned revenues of $205.4 million in 2009 and could reach $462.1 million in 2016, according to the company. The Frost & Sullivan analysis covers the financial and administrative analytics tools segments of the business analytics markets.
According to the firm, business analytics systems are considered the face of business intelligence for healthcare providers, because they assist healthcare managers and hospital management to compile, arrange and manage clinical, financial and administrative data in a defined protocol, thereby facilitating informed business decisions.
The European healthcare sector has mostly adopted activity-based payments. The current trend is that of diagnosis-related groups (DRGs), which help hospitals minimize patient visits to their premises, increasing the need for efficient analytics solutions. Pay-for-performance initiatives have further fueled the demand for business analytics systems in the European healthcare sector.
Effective healthcare business analytics solutions, along with business intelligence tools, provide ROIs ranging from 100 to 300 percent and enhance the overall workflow efficiency of healthcare management, Frost & Sullivan stated.
“Business analytics tools provide a substantial return on investment for healthcare organizations, thereby driving the adoption rates of these systems in Europe,” concluded Priyan.