How much IT integration costs add to hospital mergers

Integrating IT systems during a merger or acquisition could add about 2 percent to the organization's total operating costs each year of the integration, according to a new PricewaterhouseCoopers report.

The report found a 1,200 to 1,400-bed organization would incur clinical and business software costs of $15 million to $20 million, supporting hardware and infrastructure costs of about $5 million to $10 million and third-party consulting and support costs of $20 million to $30 million. This adds up to about $70,000 to $100,000 per bed, or an annual operating cost increase of 2 percent each of the three to five years such a project might take.

However, such integration is necessary to achieve maximum efficiency, or even a semblance of efficiency. "Being in a hybrid state after an acquisition, where hospital employees are using two different technology systems, is no fun for anyone," said John Delano, CIO of Oklahoma City-based Integris Health, a system that recently integrated two new hospitals. "Employees are often confused and patients and frustrated when their health information can't be accessed."

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