Healthcare CIOs are grappling with tight budgets in 2025, a challenge that remains consistent with our previous year’s results. Our latest survey of healthcare executives, all members of CHIME (College of Healthcare Information Management Executives), reveals interesting reports of IT budget allocation and how this is causing CIOs to find innovative ways to manage their resources effectively. Read more to discover the resourceful solutions helping healthcare organizations achieve their goals. Catch up with other findings from our annual survey, read part 1, Unveiled: You'll Need to Know These Innovative Strategies Healthcare CIOs are Using.
Facing Tight IT Budgets Lead to Innovative Ways to Save
When asked about their IT budget allocations, a significant portion of respondents reported dedicating less than 3% of their net patient revenue to IT. 70% of CIOs have reported less than 5% of IT budget allocation. With 2025 operating margins to expected to remain at historical lows, this is a challenge that’s leading to resourceful solutions such as partnerships and reorganizations.
IT Budget Allocations Recap
Percent of CIO responses: Revenue percentage allocated to IT
Partnerships Remain the Top Solution for Tackling Staffing Challenges
With nearly all respondents reporting IT budgets of less than 5% of their organization's net patient revenue, CIOs are increasingly turning to partnerships. The survey shows, 66% of CIOs will hire a contractor for specific, short-term projects, and 45% intend to contract with a partner for partial IT outsourcing. Others are addressing staffing challenges internally, with 55% reassigning work or reorganizing current IT staff, and 45% hiring remote employees as local talent is not readily available.
IT staffing partnerships prove beneficial as CIOs continue to find these skills hard to recruit and retain
Overall, turnover rates remain low, staying below 5%.
AI Rises as a Top Priority
CIO priorities for driving cost savings and efficiency per 2023, 2024, and 2025 surveys. |
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2025 |
2024 |
2023 |
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17%: Artificial Intelligence (AI) 17%: Application rationalization/optimization 13%: Change management/internal operations improvement 10%: Cloud migration and/or other data center reductions |
41%: Automation 24%: Application rationalization/optimization 18%: Artificial Intelligence (AI) 13%: Cloud migration and/or other data center reductions 6%: Advisory services |
40%: Application rationalization and optimization 22%: Managed services and IT labor alternatives 11%: Automation 11%: Predictive analytics and actionable metrics 7%: Cloud migration and/or other data center reductions |
As organizations continue to navigate tight IT budgets, artificial intelligence (AI) has risen as the top priority for driving cost savings in 2025. CIOs are recognizing the potential of AI to streamline operations and reduce operational costs. Automation has also dropped from the top spot, displaying even more how prolific AI is becoming.
In contrast, virtual leadership (26%) has been ranked the lowest priority. While virtual leadership can offer flexibility and stability during a change in IT leadership, it isn’t typically seen as providing immediate cost-savings benefits. However, in smaller organizations it can be an effective solution to bring in expertise that is not readily accessible and doesn’t demand a full-time role, such as a vCISO.
CIOs Are Embracing Managed Services and IT Labor Alternatives
In the hope of driving cost savings and efficiency, organizations are turning to managed services and IT labor alternative solutions. These are the areas most likely to be implemented:
Cybersecurity ranking as the top priority aligns with the growing complexity of cyber threats and the need for specialized expertise to protect sensitive data. However, the help desk is not far behind as another critically ranked area. Organizations are considering managed services to support efficiency and reduce costs. By outsourcing these functions, organizations can ensure their staff can concentrate on more strategic advancements, while still providing high-quality support.
Unsure about what is best for your organization? Check out our eBook, Managed Services vs Staffing Decision Guide.
Advisory Services Valued for Organizational Advancement
As healthcare organizations navigate the financial and operational complexities of today’s digital landscape, certain advisory services have emerged as valuable for driving progress and innovation. According to our survey, these are the top advisory services that CIOs find most beneficial:
Technology adoption is highly valued with CIOs in 2025. As organizations seek to modernize and enhance their operations and stay competitive, partners provide support for implementing new technologies and optimizing workflows. IT partnerships allow organizations to access the full potential of their technology and drive further innovation.
On the other hand, 40% of CIOs agree, M&A and Divestiture Consulting from due diligence to integration activities is a low priority for advisory services. This is likely to be due to the less relevancy and impact on cost and savings efficiency, unlike the immediate results seen with cybersecurity or digital transformation. CIOs are choosing to allocate their budget to areas that are more likely to directly support their current goals. These findings align with a Becker’s Hospital Review article, noting the trend of fewer hospital acquisitions due to the economic and political climate as well as general M&A market malaise.
Key Takeaways:
Given the answers to the most recent survey compared to those of previous years, these are key takeaways.
For more information:
About the CHIME Survey
The respondent demographic was primarily made up of Chief Information Officers (53%). More than half of participants (55%) represented mid-to-large healthcare organizations with 250 beds or more. This audience profile allows us to see directly into the mind of those responsible for maintaining and implementing healthcare technology within seasoned organizations.
Are you a CHIME member who didn't get a chance to respond to the survey, but would like to be a voice next year? Click here to get started.
*The 2025 online survey and the data reported is based on responses from 46 healthcare executives, all CHIME members, sponsored by CereCore.