The Hospital IT Operating Model Is Under Pressure. What Comes Next?

Hospital CIOs today face enormous and seemingly contradictory pressures. 

Hospital CIOs say they face ever-growing demands for IT services despite tight operating budgets, constrained staff resources, and aging technology infrastructure. 

What’s a beleaguered hospital CIO to do?

A need for flexibility

There’s a lot on the CIO’s plate: finding ways to optimize the use of the EHR, improving systems interoperability to sharpen data analysis and reporting, strengthening cybersecurity, and integrating new AI and automation capabilities. 

Healthcare organizations today are much more open to creative solutions and strategic partnerships than before. Hospital leaders I meet with are focused foremost on ways to keep costs down, so long as they can deliver the same level of quality or higher.

Many hospitals shifted to full IT outsourcing but found that while it may have worked initially, over time, the vendor engagements soured. They became more expensive and difficult to manage, so organizations brought everything back in-house.

That’s no longer tenable for many organizations that face relentless reimbursement pressures to revenue or difficulty finding qualified talent. 

But health systems don’t have to choose between overburdened internal teams and full-scale IT outsourcing. The better model is a hybrid structure that protects strategic internal leadership while leaning on external partners to stabilize service delivery, scale specialized expertise, and reduce operational drag.

What a hybrid model looks like

A hybrid IT model presents the best of both worlds: It allows hospitals to more flexibly scale up and down as project needs change while reducing the pressure on internal teams. It also gives them a stronger sense of control: They gain the cost efficiency for narrowly targeted functions, with the ability to be more focused on measured outcomes.

Effectively, this model involves outsourcing day-to-day maintenance work such as tier 1-2 EHR and technical service desk, patient portal requests, application support, upgrades, and patching. That leaves hospital IT teams to focus on more strategic initiatives and project work—integrating new EHR modules or capabilities, implementing new AI or automation functions, and other projects that help move the health system forward.

The outsourcing component doesn’t have to be one-for-one in terms of staffing. Hospitals should look for partners that offer automation and AI readiness and the ability to spread resources across multiple clients. The amount spent can be less than the in-house equivalent—or even equal, if the service is better, helps improve revenue collection and gives a boost to patient engagement and satisfaction. 

To offset risks of underperformance, hospitals should build in KPIs and service level agreements that outline expectations for turnaround with penalties for failing to meet them. They should aim for a level of flexibility that accounts for the fast-changing nature of the IT market and the healthcare industry itself. What might be right today could be different a few weeks from now.

Under this setup, the CIO becomes a kind of conductor who keeps tabs on the vendor, carefully vetting their proposed solutions and progress, but also focuses on the executive and strategic plans for the organization. 

Hospitals today are typically focused on growing their market share and bringing more people into their systems through ambulatory practices, clinics, and smaller hospitals. They’re trying to keep the organization attractive and modern not just to patients, but also to physicians, nurses, and other caregivers, whose jobs they want to make easier.

It falls to the CIO to focus less on a narrow IT plan than on the department’s role in developing solutions that enable that strategic growth for the next one to three years. 

About Nancy Ripari

Nancy Ripari is a Healthcare IT Executive Advisor with Med Tech Solutions and a former healthcare CIO and CTO.