In an industry where patient care and operational efficiency are paramount, healthcare IT has become essential. Yet in many organizations, especially smaller ones, it’s still perceived as a luxury; aspirational, expensive, and difficult to sustain, particularly during economic downturns. This outdated mindset creates a persistent identity crisis and daily uphill battles for CIOs, CMIOs, and other digital transformation leaders. These leaders carry not only the technical burden but also the emotional weight of advocating for systems that are often misunderstood or undervalued. Let’s explore why this perception persists, what digital leaders can do to shift it, and how hospitals and health systems benefit when IT is treated as essential.
Why IT Still Feels Like a Luxury
Despite being embedded in nearly every aspect of healthcare, IT is too often treated as a “nice-to-have” rather than a mission-critical function. Healthcare IT leaders are expected to deliver innovation, security, and efficiency, often with limited resources and under immense pressure. Here’s why the perception of luxury persists:
- Rising Costs and Complexity: Deploying and maintaining major healthcare IT platforms like Epic or Cerner can cost hundreds of millions of dollars. When you add enterprise resource planning (ERP) systems, customer relationship management (CRM) tools, patient portals, AI pilots, and ongoing cloud migrations, the complexity quickly becomes overwhelming. For smaller or rural healthcare systems, these investments often seem financially out of reach. The sheer scale and expense of modern IT ecosystems can lead decision-makers to view them as luxuries rather than essential infrastructure.
- IT–Business Value Gap: IT is still too frequently seen as a cost center rather than a strategic driver. When healthcare IT leaders are not positioned as true executives, they are often excluded from high-level planning conversations or brought in only after critical decisions have been made. This lack of involvement limits IT’s ability to align with and drive organizational transformation. As a result, IT is underleveraged and misunderstood, perpetuating the idea that it’s separate from business strategy rather than central to it.
- Talent Scarcity: Despite the rapid adoption of AI, experts continue to expect significant global tech talent shortages over the next decade. This growing gap in skilled personnel directly impacts healthcare, where demand for highly specialized talent, in particular AI expertise, cybersecurity specialists, and integration experts, consistently outpaces supply. These shortages not only drive up costs for healthcare organizations but also delay critical IT projects and innovation efforts. Without enough specialized talent, IT departments struggle to keep pace with business goals.
- Workforce Pressures: The broader healthcare workforce is also under immense strain. According to the Health Resources and Services Administration, demand will outpace supply across all major healthcare disciplines through 2030. Ongoing shortages in nursing, mental health, and primary care, combined with an aging population, are pushing healthcare systems to their limits. Burnout, retirements, inefficient workflows, and outdated systems are compounding the crisis. IT is often expected to provide quick, affordable fixes to systemic issues. However, without adequate support, this only creates deeper technology debt over time.
Why IT Must Be Seen as Essential
Today, healthcare IT is far more than infrastructure; it directly enables business outcomes. In an increasingly complex healthcare landscape, IT plays a critical role in improving patient care and operational efficiency. Real-time clinical decision support tools help clinicians improve patient outcomes by providing timely insights at the point of care. Predictive analytics and population health platforms promote efficiency, equity, and long-term sustainability by identifying trends, risks, and opportunities within patient populations.
It is commonly cited that Healthcare produces and secures nearly 30% of the world’s data. Yet, only about 3% of that data is currently used in a meaningful way. Digital health leaders are working tirelessly to close that gap, striving to turn raw data into actionable insights. These insights can transform patient outcomes, enhance clinical workflows, and improve day-to-day operations across health systems.
In addition to improving clinical performance, healthcare IT directly impacts financial outcomes. Optimizing revenue cycle performance increases margins and drives financial sustainability. On the patient engagement front, IT simplifies the care journey by reducing friction and supporting consumer-centric experiences that meet modern expectations. Furthermore, a robust IT infrastructure is essential for managing organizational risk through effective regulatory compliance and comprehensive cybersecurity programs. When viewed holistically, healthcare IT is not a luxury—it is foundational to delivering on the mission of care, improving efficiency, and sustaining long-term growth.
Per Sarah Richardson, This Week Health’s President of Community Development (and former CIO), “Healthcare IT is not a luxury, it’s the lifeblood of modern care delivery. When we frame technology solely as a cost, we miss its ability to expand access, reduce burnout, and drive transformational insights and measurable outcomes. The leaders who thrive in this era are the ones who treat IT as a core strategy, not just support.”
How Digital Leaders Can Shift the Narrative
CIOs, CMIOs, and digital executives must reshape how IT is understood and valued at the highest levels of leadership. This requires not just technical expertise, but emotional intelligence, resilience, and strategic communication. Here’s how:
- Reframe IT as a Strategic Asset: Speak the C-suite’s language like ROI, operating margin, risk mitigation, operational efficiency, and growth. Clearly show how IT investments drive clinical, financial, and strategic value. Will Johnson, Chief Information and Digital Officer of Tidelands Health, adds, “IT cannot be treated like a luxury for healthcare to provide care to various communities. As the world advances with technology solutions at every turn, IT must be at the table to shape how technology can make healthcare easier for providers, patients, family members, and the partners integrated into care delivery models. We can no longer deliver healthcare in the traditional manner. Let’s take the nursing shortage as an example. Burnout and workforce pressures can’t be solved by throwing more people at the problem (they aren’t available), throwing more dollars at it (margins are already thin), or working more hours (there are only so many in a day). Invite IT to the table to participate and drive innovations to solve problems that can no longer be solved in traditional ways.”
- Embrace Product-Based Thinking: Move away from project-based mentalities to embrace iterative product sprints. Treat deliverables as outputs that evolve with user feedback, require continuous support, and deliver measurable outcomes. According to Kellie Caron, VP of Product at Wedgewood Pharmacy, “Successfully shifting a healthcare organization from a project-based to a product-driven model requires more than process changes; it demands organizational change management, a commitment to continuous measurement, and deeper engagement with both internal and external customers. But don’t overengineer it. The most effective transformations often begin with simplicity. Start by assembling a small, motivated group of cross-functional experts to identify key pain points, design experiments, and measure outcomes. In most healthcare settings, product success isn’t about flashy innovation; it’s about the discipline of continuous adaptation.”
- Build Cross-Functional Coalitions: Embed technology into the DNA of every department. Co-own initiatives with clinical, operational, and financial leaders to ensure alignment, adoption, and accountability. Consider federated models where technology resources report to non-IT leadership. I moderated a panel on this topic at Bluebird Leader’s Soar conference in 2025, and all three panelists agreed that strong partnerships across the health system, especially with the CFO, are critical to their success.
- Promote Digital and AI Fluency Across Leadership: Educate executives and frontline managers on the strategic potential of digital tools and AI capabilities. AI literacy is an opportunity to bring senior leadership into the journey of co-creating, transforming, and deriving value from technology. At another conference this winter, I had the pleasure of moderating a lively panel on AI adoption. I found that garnering involvement from the field where the work is actually performed – on the floor, in the billing office, on the phone drove greater adoption and enthusiasm for AI than top-down driven strategies to select and push out AI initiatives. It confirmed that AI is a real opportunity for IT visibility and for working across the health system toward a common goal.
- Leverage External Partnerships: Utilize advisors, vendors, managed services partners, and other outside partners for thought leadership, perspective, and differentiated resources. This lends credibility and external perspectives to initiatives while accelerating time-to-value and scaling without overburdening internal teams. And don’t forget to leverage your peer network. Conferences are great, but the real magic and meet happens when CIO’s gather 1:1 or in small groups to dive deep into real issues and real solutions.
What’s in It for the Health System?
Industry Chief Information Officer, Jeanne de Vries Sands, “Technology is no longer aligned to the business; it is the business. The fastest-growing and highest margin health systems are those that recognize IT as core to strategy, not a support function.” When IT is treated as essential, not exclusive, healthcare systems benefit in measurable ways:
- Improved patient outcomes and experiences: When IT is integrated into care delivery, clinicians gain real-time insights that improve diagnoses, treatment plans, and follow-up care. Patient-facing tools, such as portals and apps, enhance engagement, satisfaction, and access to services.
- Lower clinician burnout: Automated workflows and intuitive systems reduce administrative burden, giving providers more time to focus on patients. When technology works with clinicians rather than against them, stress levels drop, and retention improves.
- Stronger revenue performance: Optimized IT systems drive accuracy and efficiency in revenue cycle management, reducing denials and accelerating reimbursements. Financial analytics tools help identify trends and opportunities to protect and grow margins.
- Greater resiliency: Robust IT infrastructure supports business continuity, cyber resilience, and adaptability in times of crisis. Systems built for scalability and flexibility empower organizations to weather disruptions and pivot quickly.
- Stronger brand equity: Health systems that invest in modern, patient-centered technology build a reputation for innovation and quality. A strong digital presence and seamless care experience enhance trust and loyalty among patients and partners.
De Vries Sands continues, “In a crowded and commoditized healthcare market, digital capability is often the only sustainable differentiator.”
The perception of IT as a luxury is outdated and reduces the impact healthcare organizations can have. Today’s CIOs, CMIOs, and transformation leaders must use their voices and expertise to claim a permanent seat at the executive table, not as support functions, but as strategic leaders driving clinical and operational outcomes. Healthcare IT can no longer be viewed as the back-office utility. Instead, it should be viewed as the organization’s central nervous system, powering every department, every decision, and every patient interaction. When IT is led with clarity, governed with intent, and integrated into the broader mission by the CEO’s and boards, it becomes the engine of transformation, not just for technology, but for the entire health system.
Author’s Note: The concept of and frustration with “IT as a luxury” mentality has been bubbling up in dozens and dozens of my private recruiter/candidate and client/vendor conversations over the past 2 years. In these calls, healthcare leaders have shared their personal and professional stories and frustrations with me. To those leaders, I’ve written this article to honor you. It’s a tough time in the industry and in the market. You are doing an amazing job! Keep leading, keep advocating, keep transforming. Some days it doesn’t feel like it, but you are healthcare heroes even if you aren’t wearing a cape or sitting at the bedside. We see you and appreciate you!
