How COVID-19 Is Reshaping Hospital Technology Budgets

GE Healthcare

After nearly a year spent battling the coronavirus pandemic, health systems hope that new vaccines will mark the beginning of a return to something like normalcy. Until that occurs, hospitals remain in a position that can only be described as uncertain. Patients are falling ill in record numbers and clinicians are still working long hours. But COVID-19’s grip also extends deeper within health systems, forcing cash flow-crippling moratoriums on elective procedures and near-constant revisions to hospital technology budgets.

“We’re still trying to understand what the future is, and the long-term idea of a budget seems to be out the window,” says Rick Gundling, who, as a senior vice president of the Healthcare Financial Management Association, often talks to health system executives. “It’s almost like they’re doing quarterly rolling forecasts, so they’re in that budgeting cycle all the time.”

With 19 healthcare mergers and acquisitions in the third quarter of 2020 and no visible end to the pandemic, it’s reasonable for some health system finance executives to relate to lyrics written by the late rock star Jim Morrison: “The future’s uncertain and the end is always near.”1 Indeed, a survey released this past spring found that just over 70 percent of health IT departments experienced budget cuts as a result of COVID-19.2 In October, another survey revealed that 60 percent of top U.S. hospital administrators didn’t anticipate completing capital purchases for 2020 until at least midway through 2021.3

But even as some technology projects remain in limbo, many appear to be forging ahead at full speed. A recent survey of chief financial officers found that all expected revenue losses due to the pandemic—yet just 12 percent claimed to be ready to reduce or hold off on digital transformation initiatives.4

In fact, Gundling sees this moment as an opportunity for healthcare executives to make forward-thinking budgeting decisions that could ripple across their health systems for years to come, boosting patient satisfaction and outcomes and strengthening revenues through strategic technology adoption. Already, he says, health systems have proven resilient against the pandemic. Now, thanks to vaccines entering the market, these organizations are beginning to consider life—and purchasing—in a post-pandemic world.

So, how can healthcare leaders navigate the ongoing budgeting cycle to best position their organizations, clinicians, and patients to survive COVID-19 and thrive into the future?

How Hospital Technology Budgets Are Fighting COVID-19

Telemedicine expansion isn’t the only technology line left in health systems’ pandemic-battered budgets.

Healthcare’s march toward consumerization remains strong, as new competitors to the industry and looming data-sharing regulations provide more choice and power to patients. This trend is inspiring health systems to budget for innovations that match the expectations of consumers—and Gundling says that often favors technology over physical infrastructure investments.

Even amid the coronavirus pandemic, for example, healthcare organizations are paying for artificial intelligence systems that speed up claims processing and automate or streamline administrative work, he adds. Vendors and health systems across the country have attested to AI’s increasing role in powering tasks such as claims management since the arrival of COVID-19. “We are more open and receptive to different solutions and on board with the fact that change is necessary,” a system director of revenue cycle for a California health system said this past year.5

Technologies that aid clinician safety and workflows, support patient engagement, and smooth hospital operations are also weathering the storm.

Time-strapped clinicians, for instance, need all the help they can get. That’s one reason why virtual assistants—which use data to help care teams make the right decisions and avoid excessive documentation—appear to be thriving today.6 At a time when clinical teams are under strain and a virus is circulating throughout U.S. hospitals, the ability to search electronic medical records via voice or a personal device appears appealing. And more research into the efficacy of virtual assistants, during COVID-19 and beyond, is cropping up.7

Respected organizations like Adventist Health, Northwell Health, and OSF Health have all recently implemented virtual assistants. But this kind of purchasing decision could help strengthen physician well-being long after the pandemic ends.

“We are still in a time of uncertainty, but health systems are being proactive,” Gundling says. “I think health systems have gotten their stride with COVID, and they are starting to think about other areas in the future.”

Consider This When Building a Hospital Technology Budget

Top health system executives don’t make their pandemic purchasing decisions because of the technology. They focus on a problem and then zoom out to the solution.

The first step is to understand and determine the needs of a health system’s patient populations, Gundling says. Digitally connected infection-control devices might make sense for some, while an enterprise virtual assistant could prove the more immediate need for others. The key is to meet today’s needs while filling technology gaps that would remain beyond the pandemic—such as challenges in retrieving patient data from electronic medical records.

Health systems can struggle to find and retain reliable technology staff in more typical times. Now, as many of those employees continue to focus on virtual care and remote work, Gundling says it’s imperative that healthcare executives consider their existing workforces, the ability to bring on new employees, and how that could affect the hospital technology budget.

Health systems need to vet technology vendors to ensure they’re a good fit. Few challenges can be overcome with a single solution. If a health system invests in the wrong technology or fails to invest in the right one, it could spell trouble.

“It’s not a one-size-fits-all solution, which makes it hard,” Gundling says.

But he offers a broad road map for success: Investigate how analytics might fuel high-quality care at a low cost. And plan for the worst: “How do you think about the next pandemic?” Gundling asks. “It will happen, so how do you become more sustainable and resilient?”


  1. “Healthcare Merger and Acquisition Activity Increased in Q3 2020.” Rev Cycle Intelligence, Oct. 2020, Accessed Dec. 9, 2020.
  2. “Technology Budgets Hit Hard by Covid-19.” Bain & Company, May 2020, Accessed Dec. 9, 2020
  3. “Updated Survey: Impact of COVID-19 on Medical Technology Spending.” Cowen, Oct. 2020, Accessed Dec. 9, 2020.
  4. “Healthcare CFOs look to technology and automation for COVID-19 recovery.” Healthcare Finance, June 2020, Accessed Dec. 9, 2020.
  5. “COVID-19 has accelerated the adoption of AI. Executives from Google Cloud, Suki and Olive spell out why.” FierceHealthcare, Aug. 2020, Accessed Dec. 9, 2020.
  6. “Readiness for voice assistants to support healthcare delivery during a health crisis and pandemic.” npj Digital Medicine, Sept. 2020, Accessed, Dec. 9, 2020.
  7. “Alexa, do I have COVID-19” Nature, Sept. 2020, Accessed Dec. 22, 2020.