The WSJ asked CIOs how the recession might impact budgets. They say, "Not much impact". My take is don't read too much into this. A recession impacts areas of the economy very differently based on many factors. In broad terms, for those prepared for a recession or with enough resources to weather a recession there won't be much impact. Those not prepared, well, they aren't prepared. There will be a significant impact.
Today in health, it CIO say tech budgets should remain unharmed from the recession. My name is bill Russell. I'm a former CIO for a 16 hospital system. And creator of this week health set of channels, dedicated to keeping health staff, current and engaged. We want to thank our show sponsors who are investing in developing the next generation of health leaders, accordion dynamics, Quill health tau site nuance, Canon medical, and current health. Check them out at this week.
health.com/today. All right. I was sifting through some articles came across this one. This is a Becker's. Synopsis of a wall street journal article.
And the title is CIO. Say tech budgets should remain unharmed. From the recession. So anytime I read these articles, I'm always reminded that context is my friend. So first of all, the word healthcare is not in the title, so it's probably not healthcare CIO. It's just CIO is in general. So that's cross many industries. And even if it said healthcare CEOs I'm reminded that.
, healthcare is not homogenous. We have many different types of healthcare organizations with different balance sheets, different strategies, different digital footprints, different. You name it. Right? And so it's going to impact them all differently. So even if it said healthcare, CIO say tech budgets should remain on harmed, I would look at the article to dry to determine what types of health systems.
, they were talking to, to get their source for the information, but this is just CEO's in general, say, Hey, guess what? , we don't think that tech budget's going to be impacted.
And they really give one reason for their premise that it's not going to slow down. And it is. Let's see, here's the paragraph. This is due to the pandemic. And the rise of cloud computing, which has shown the importance of enterprise technology and digital transformation within an organization. Now they do see some things getting cut. They say uncertainty brings renewed focus on tech projects with real business cases, while nice to have like proof of concept tests on emerging technologies might get the ax executive say.
All right. So what's my, so what on this. I know, I didn't share much of it because there isn't that much to this story. I mean, there's really one reason they're talking about the pandemic. , proved to CEOs, the importance of technology and technology is a path out. The other side and you don't want to skimp on that, or you might not make it to the other side.
So technology is being saved. A little bit from experience. And then the other thing they say is, Hey, where are we going to cut? We're going to cut on the more speculative. , concept. Tests that we have on the new technologies. And we're just going to push that stuff back a little bit. So. , as I read that again. What's my, so what.
, context is your friend. I say that all the time on this show. So context is your friend. We have academic medical centers. We have, , large ideas. We have small ideas. We have regional ideas. We have health systems. We have critical access facilities. We have health systems with strong balance sheets and poor balance sheets.
, health systems with strong pair mixes with weak pair mixes. We have health systems. With a strong digital strategy and some with a non-existent digital strategy. , there's, , it's all over the board. Right? And so how will a potential recession impact the various health systems is it's just too broad, too.
Really talk about. So listen, I wrote down.
In general. Most health systems are going to feel a pinch during this time. There is going to be conversations of where can we cut back the large IDs and the academic medical centers. We'll be asked to cut back. To a certain extent, but they can pull a lot of different levers in order to get there.
They can automate some things they can decide to do training in a different way. They can decide to move to the cloud. They can decide to, , outsource selective outsource, not a complete outsource, but selective outsourcing. Of certain areas. , they can even take work overseas. There's an awful lot of ways that companies with healthy balance sheets and long-term visions can weather this storm.
The, , the regional systems. Are going to really fall into two camps. It's going to be those that have prepared financially for this and those who have not prepared financially for this. , some just couldn't prepare for it. And some just didn't prepare for it. If you're with a system that has prepared for it.
, my recommendation is going to be weather the storm. Try not to cut staff. It's so hard to replace them after the fact. Plus, if you can weather the storm, it's going to give you a breather. And during that breather, you can do a lot of things like reduce your tech debt. You can focus on the projects that you'd normally don't have time.
To focus in on and that's, that's fantastic. For those that don't have healthy balance sheets entering this time, then. , you, you probably are going to do cuts. There's just no getting around it. Now, the thing you have to do in that case is you have to look at. Strategically where you can make those cuts.
And you have to be careful. Because traditionally we've made cuts in areas that we shouldn't make cuts anymore. Like cybersecurity. We have to look closely at our cybersecurity, spend an investment and say, should we be touching that anymore? And if that now becomes a critical item. Then we have to start looking at other areas and quite frankly, there is no good area to cut per se. I can't look into a crystal ball and say, everyone should make cuts over here.
, because it doesn't really make sense again, because it depends on your market, what your strategy is, how you're going to support that strategy. The, , critical access facilities and whatnot, know how to make it. Without a lot of money. , you have probably a, not a great payer mix. You, , have learned how to do more with less.
And quite frankly, you're probably better prepared to go into a recession than most because you know how to function in those environments. So, , my SOA for this is context is your friend, know your house system, know your market. I understand what you can and cannot do. Be strategic. No, where you can cut and where you can't cut and a.
And as you read these articles, CIO say tech budgets should remain unharmed from the recession. I think. , directionally that is absolutely accurate. At no time in history, has technology been more important to the overall effectiveness of healthcare? And analytics and data. And automation. So, , to a certain extent, I agree with that statement and I hope that tech budgets are not impacted in healthcare.
, because I believe they are the path through the storm. Not necessarily. The, , the thing that should be jettisoned during the storm. So, that's all for today. If someone that might benefit from our channel, please forward them a note. They can subscribe on our website this week, health.com or wherever you listen to podcasts, apple, Google, overcast, Spotify, Stitcher.
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