I'm often asked how about my budgets for hospital information systems. In the interest of transparency here it is, in narrative and spreadsheet form.
Typically, Academic Health Centers spend about 2.5% of their operating budget on Information Technology. Our budget is between 1.8-3.1% depending on what you include. Overall, we receive $37.1 million out of BIDMC's $1,195 milllion dollar budget (3.1%) but we provide services for many non-BIDMC entities which are charged back. We also provide Media Services/Telemedicine, Library Services, Telecommunications and Health Information management services (medical records). If you remove these items to create an apples to apples comparison with other academic health centers, the percentage drops to 1.8%. These percentages are mixed blessing. Although it's laudable we can do so much with under 2% of the operating budget, there are clearly opportunities to enhance operations via additional IT expenditures.
The narrative is a breakdown of direct and indirect IS costs. Important to note - it includes fringe benefits, leased space costs and utilities, and capital depreciation on IS related items. It also includes the cost of services provided to non-BIDMC sites who we charge for our service. The grand total is $59m; much higher than our net operating budget. To properly represent the cost of an application such as Peoplesoft or Email, you really need to include these expenses. At the bottom of the table, I show the revenue recovered from other entities and address some of the typical questions often asked about operating and capital comparisons.
The spreadsheet shows the IS expense for FY08 for each of our cost centers. This includes a breakdown of fringe, space/utilities, and depreciation. We depreciate everything on a 5 year basis for purposes of the allocation.
This year's $169.4m BIDMC capital includes $57.8m for our new Center for Life Sciences Research building and $23m for backfilling vacated space as researchers move into the new building. The $15.4m IS capital budget also includes $3.4m for the Center for Life Sciences build out of telecom and network services. If you remove these for both BIDMC and IS, we are 13.5% of the total. The remainder is $8.5m for infrastructure, $.5m for Peoplesoft, and $3m for Disaster Recovery.
The most difficult variable to express when comparing institutions is the quality of information systems. Quality for IS comes through reliability, fast transaction speeds, application breadth and depth, and customer satisfaction. At present, I believe that the capital and operating budgets I've provided here will result in more than 99.9% reliability, under 2 second transactions speeds in all applications, reasonable progress on our effort to be 85% electronic in all our care areas, and high customer satisfaction. As I often say, providing Information Systems is a continuous journey, so we will continue to seek additional budgets to support ever evolving user requirements.