The Hidden IT Costs in Healthcare Construction: How to Avoid Budget Surprises

As healthcare IT construction experts, we often hear frustrations around technology budgets. Construction teams may feel that IT either underestimates or overestimates costs—both of which create challenges. If IT underestimates, they’re forced to request additional funding, often leading to cuts in other areas or removing advanced functionality just to meet basic needs. If IT overestimates, valuable investments that could improve patient care and operations may be eliminated early on due to budget constraints.

At the core of this issue is how technology is budgeted. Many technology design firms estimate costs based on predefined price points, but things can fall through the cracks. IT departments—often lacking dedicated construction expertise—are frequently handed a pre-set budget with minimal input from their full team. In other cases, they are asked to create a budget from scratch, using outdated data from projects completed a decade or more ago, missing essential modern requirements.

If this sounds familiar, read on to learn how to avoid common budget surprises and ensure your next healthcare construction project is financially prepared for the IT reality of modern hospitals.

Avoiding the Biggest Healthcare IT Budgeting Mistakes

Overlooking Software, Applications, and Integrations

One of the most frequent budgeting missteps is focusing only on infrastructure and devices while neglecting software, applications, and system integrations. In today's hospitals, most workflows run on applications and software—from EHRs to patient engagement platforms. Yet, many budgets assume that no additional costs will be incurred since a health system already has an ERP, EHR, and third-party applications. This is an expensive assumption.

• Key Considerations:

  • New spaces often require software reconfigurations, virtual builds, additional licenses, and integration costs to align with existing platforms.

  • Construction projects offer opportunities to consolidate, optimize, or upgrade applications—but only if planned in advance.

  • Failure to include application costs upfront often results in unexpected expenses late in the project.

• Solution: Ensure the right team members within the IT department are included in the budgeting process to assess total application costs and potential consolidation opportunities before finalizing the technology budget.

Underestimating the True Cost of Emerging Technologies

Hospitals today are designed for the future—which means leadership often wants to include cutting-edge or even bleeding-edge technologies. While obtaining vendor quotes for hardware and software is straightforward, hidden costs can quickly inflate the budget.

• Key Considerations:

  • Beyond upfront costs, consider the total cost of ownership, what aspects will be part of the construction budget, and what aspects should be bookmarked for operating budgets.

  • Many advanced systems require significant infrastructure investments (e.g., additional bandwidth, power, servers, and environmental controls).

  • Without full lifecycle costing, budgets may only reflect the initial purchase price, leading to financial shortfalls post-construction.

• Solution: Conduct a total cost of ownership (TCO) analysis for new technologies, accounting for both short-term and long-term costs and dependencies.

Failing to Meet Regulatory & IT Standards with the Right Devices

Another common mistake is assuming lower-cost technology will be "good enough." Key specifications may be missed without the proper IT oversight, leading to compliance issues or costly retrofits.

• Key Considerations:

  • Some devices have specific regulatory requirements, such as HIPAA compliance for security cameras.

  • Higher-end technology may reduce total project costs by improving efficiency. For example, instead of purchasing more cameras at a lower price point, a motion-sensing or swivel camera could meet security standards with fewer devices.

  • Ignoring IT standards increases the risk of operational inefficiencies and future replacement costs.

• Solution: Engage the proper IT teams to define technical specifications and compliance needs before device selection.

Short-Term Cost Cutting That Leads to Expensive Retrofits

In an effort to reduce upfront costs, some technology elements are value-engineered out during construction—only to be reintroduced later at a much higher cost.

• Key Considerations:

  • Cutting IT infrastructure (e.g., cabling, network drops, or power outlets) may reduce initial costs, but it often forces costly retrofits later.

  • Closing patient rooms to install missed infrastructure not only adds expenses but also reduces operational capacity, impacting patient care.

  • Healthcare facilities should be built to support evolving technologies—a small investment today can prevent significant expenses later.

• Solution: Instead of stripping down technology budgets to meet short-term financial goals, ensure construction teams understand the long-term cost implications of cutting IT infrastructure.

The Future of Healthcare IT Budgeting: A Smarter Approach

At Equinox HIT, we believe that healthcare construction success starts with informed, realistic IT budgets. By engaging the right IT stakeholders, considering hidden costs, and planning for total cost of ownership, organizations can avoid surprises and ensure seamless technology integration.

The evolution of healthcare technology demands an evolution in how we budget for it. It's time to rethink how we build and integrate technology into our healthcare spaces—not just for today, but for the future of patient care.

Equinox HIT specializes in guiding healthcare organizations through the complex IT components of construction projects. Our team brings both healthcare technology expertise and construction experience to ensure your facility is strategically planned, properly budgeted, and future-ready.

Equinox HIT is Your HIT Construction Partner. Ready to discuss your upcoming project? Contact us to schedule a consultation.