Leaders see more caution in IT spending, and less patience to get returns

Hospital executives look like they will be giving a closer look at spending on information technology initiatives.

A significant number of healthcare executives project declines in capital investments, according to a new report from Sage Growth Partners.

Four in 10 executives (41%) said they are expecting declines in capital investments, the firm found in a report released last week.

The group surveyed 101 executives from hospitals and health systems, and found 22% of respondents said capital investments will drop by about 10%. That’s a significant uptick from a similar survey in 2023, when only 11% said they expected a 10% decline in capital investments.

In addition, 19% of those surveyed in 2025 said capital investments will drop by 20%.

Dan D’Orazio, CEO of Sage Growth Partners, said executives will be looking carefully when it comes to IT spending.

“As health systems and hospitals grapple with declining capital investments, C-suite leaders are likely to apply greater degrees of scrutiny to health IT purchasing decisions,” he said in a statement accompanying the report. “Overall, capital planning is shifting toward initiatives that drive growth, such as acquiring and retaining patients, expanding into new markets​, and diversifying revenue streams to increase top line revenue.”

• Read more: AI helps hospitals, but only when properly used

In what is likely not a big surprise, healthcare executives said they will be investing more in AI technology.

A solid majority of healthcare executives (57%) said AI-based clinical solutions would be their top technology initiative for the next two years. That’s a big jump from 2023, when 19% of executives offered that assessment.

The survey also found AI investments passed initiatives to get the most out of electronic medical records. In 2023, 60% of executives cited electronic medical record optimization among the top tech priorities, but that dropped to 43% in 2025.

Nearly half of the executives (46%) said that they viewed funding for new markets or revenue streams as a high priority.

Healthcare leaders are very interested in tools to help boost their ability to attract patients, with 40% saying that they are investing in patient engagement technologies.

The survey also shows more evidence that executives are laser-focused on making sure that they will see a return on their investments in AI and other technology efforts.

More than three out four executives (77%) said they viewed anticipated returns on investment as their top factor in spending decisions, up from 50% in 2023. And 72% said they viewed cost as a key consideration in decisions.

C-suite leaders also are expecting to see their IT investments yield returns sooner than later. Fifteen percent said they expected a return within one year, up from 5% in 2022. And fewer executives said they would wait three years to get a return.

The survey indicated executives also view investing in revenue cycle management as a top priority, and three in four expected they would need to invest in “a new core telehealth vendor in the next three years to help advance their digital health priorities.”

• Read more: What hospitals are seeking in CIOs