How Much Should My Healthcare Organization Spend on IT in 2023?

Medicus IT

By Medicus IT

Effective IT strategies require mature budgeting practices that allow companies to evolve and capitalize on growth. But how does a healthcare organization determine how much to allocate for its IT budget?

Deciding on your organization’s IT spending involves more than settling on a number that sounds good. You should have realistic expectations of what a healthcare IT budget should be. To help guide you, we’re sharing industry reports and guidelines to provide IT spending benchmarks that demonstrate what a healthy budget looks like.

IT spend by industry

IT budgets vary yearly and are affected by factors such as industry and overall revenue. IT spending as a percentage of revenue is the most popular metric used in calculating overall IT spending.

Information Technology Spend by Industry (% of revenue)



Tech Hosting/Cloud


Financial Services


Retail & eCommerce


Consumer Products


Transportation & Logistics




Industrial Products


Source: Flexera 2020 State of Tech Spend Report

IT spend in healthcare

While there is no exact number, a study by Computer Economics shows that healthcare organizations spend around 3.0-5.9% of their total revenue on business IT. It could be more if an organization is in refresh or growth mode.

Most healthcare organizations plan to increase IT spending in the next few years, and digital transformation is a key driver for the shift. The healthcare industry is poised for transformation due to the rise of consumerism and the rapid advancement of technology. Mobile and on-demand services are becoming the standard, and consumer experiences are reshaping how patients expect to receive care. Organizations must carefully plan their IT investments to cope with the transition, as only the digitally strong can thrive in this ever-changing landscape of digital health.

Medicus IT healthcare IT worker using tablet

Business IT budget planning guidelines

By creating an IT budget breakdown, you can highlight areas that are working best for your organization and areas where more resources are needed. You must undergo an assessment phase to review and analyze your IT systems from different angles, including hardware, users, and IT vendors.

To create the right budget that effectively implements your technology needs and goals, there are crucial questions to address:

How will IT give you a competitive advantage?

Be aware of how other healthcare organizations are taking advantage of technology and how your IT systems can give you the edge in healthcare delivery and patient care.

How can you exceed your patients' expectations in this digital health age?

Convenient, personalized, and on-demand consumer experiences are pushing patient expectations higher and driving the demand for consumer-driven technology. You must have a clear vision of how to meet and exceed their expectations and have the IT budget to execute it.

Do your business strategies maximize technology’s full potential to improve your business?

Technology may be costly, but IT expenses are relatively small compared to the potential growth your business can achieve. Technology can boost revenues and reduce overall costs. By taking advantage of opportunities, you can improve your business performance.

For example, if you want to enhance the patient experience, you may upgrade your phone systems and patient portal. Budgeting for these improvements can turn IT expenses into profits.

Are you investing enough in security?

Ransomware and other cyberattacks are on the rise, and healthcare organizations are attractive targets. Security measures you must invest in include:

  • Firewalls
  • Secure gateways
  • Email filtering
  • Antivirus software for every device
  • Backups (at least one off-site)
  • Cloud services
  • Encryption on emails, patient portals, file sharing, etc.

Work with a Trusted Healthcare IT Partner

When it comes to strategizing for your healthcare technology budget, you need input from management, physicians, and office staff, as everyone is dependent on your IT infrastructure. Getting feedback is always important when looking to upgrade your technology.

Your IT spending does not have to be extravagant, but it should ensure that all important bases are covered. If you cut corners, you may eventually have to spend more on repairs, upgrades, and replacements in the long run, which only drives up costs.

One way to benefit from the value of IT is to work with experienced IT specialists. At Medicus IT, our healthcare IT experts ensure that technology becomes an asset to your organization, not a burden. We put emphasis on preventive, proactive care as the key to wellness that enables your organization to run smoothly and securely.

Our professionals stay attuned to the big picture of your IT infrastructure while also anticipating security challenges and mitigating risk. We offer a suite of services ranging from cybersecurity and cloud integration to value-based care solutions and managed services, ensuring that your IT spending is an investment that keeps your organization competitive, secure, and efficient. We’ll help you invest wisely in your technology so that you can enhance patient services and reach your organizational goals.

To learn more about the benefits of IT and why you should allocate a budget for it, contact Medicus today.