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More than 80% of healthcare chief information officers expect their professional services budgets to hold steady or increase over the next year, even as financial pressures and workforce shortages intensify, according to a KLAS survey of 105 CIOs.
The study examined how organizations are using health information technology professional services to manage rising operational complexity and shifting federal policy.
CIOs reported that persistent staffing shortages, competition for technical talent and evolving reimbursement models continue to push health systems toward external partners for support.
Warren Whitford, KLAS vice president of client engagement, told Healthcare IT News that healthcare organizations continue to face talent shortages in high skill HIT roles, from electronic health record optimization to cybersecurity and AI.
"Professional services firms provide rapid access to scarce expertise without requiring long recruitment cycles," he said. "High-complexity initiatives, like cloud migration, AI governance or ERP optimization, often exceed internal capabilities."
Many organizations surveyed said professional services firms provide essential expertise for strategic planning, major implementations and short-term surge capacity – particularly when internal hiring cannot keep pace with demand.
High-intensity projects such as EHR, enterprise resource planning, and picture archiving and communication system implementations were frequently cited as drivers of near-term spending.
"Many CIOs are taking a 'strategic core, flexible edge' approach, retaining essential internal teams while outsourcing project-based or specialty work," Whitford said.
About half of small health systems expect flat PS budgets, with many reallocating funds from lower-priority initiatives toward projects with clearer ROI or direct clinical benefit.
A minority of CIOs plan to reduce spending, largely due to funding uncertainty and the need to operationalize recent large technology investments.
Even so, the report suggested investment priorities remain consistent. CIOs most frequently pointed to operational efficiency, cybersecurity and emerging technologies – including AI and automation – as top focus areas for external support.
The survey also found EHR services remain a core spending category as organizations work to maximize clinical and financial performance.
"Top drivers include the shift from EHR deployment to optimization, and regulatory drivers including interoperability, data sharing and safety," Whitford said. "The EHR is the backbone for analytics, automation and patient engagement strategies."
When evaluating vendors, CIOs emphasized clarity, reputation and proven results. Respondents said successful partnerships depend on well-defined deliverables, transparent communication and strong alignment with internal stakeholders – factors that they view as more important than cost alone.
"We advise CIOs to prioritize internal teams for strategy, governance and vendor oversight, then rely on external partners for execution, peak demand or niche expertise," said Kevin Huang, insights director at KLAS Research.
He said given fiscal constraints, CIOs are investing in external services that offer measurable outcomes or risk mitigation and pursuing "right-sized" engagements, such as time-and-materials contracts or limited-scope deliverables.
The report noted that even following the One Big Beautiful Bill Act, which introduced reimbursement uncertainty, over 80% of CIOs still expect their PS spend to hold steady or increase.
"The most successful leaders balance core internal capabilities with targeted, outcome-driven external partnerships," said Huang.
Nathan Eddy is a healthcare and technology freelancer based in Berlin.
Email the writer: nathaneddy@gmail.com
Healthcare IT News is a HIMSS Media publication.
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