As healthcare organizations prioritize digital transformation, they purchase technology to support these initiatives. Most of these organizations have followed traditional capital and operational funding and accounting practices to do so, which are now limiting how/when they can purchase technology and services.

As we all know - on an annual basis, information technology teams submit capital requests with supporting justification, the requests are prioritized, recommendations are submitted to the board, and the teams are informed of the finalized budgetary allotments. Operational budgets are based on a combination of historical costs, new service or support contracts, and depreciation or other operating tails from capital purchases. Finalized budgets are announced at the start of each fiscal year.

Historically, projects and supporting product offerings are based on the final and approved budget and funding. The decision to use Operation Expenses (OPEX) vs Capital Expenses (CAPEX) was predetermined. That is until product offering changed. Software subscriptions, software-as-a-service (anything-as-a-service), and consumption-based services are dramatically impacting the way that information technology is purchased. Many healthcare organizations are challenged with this financial shift, which impacts the ability to adopt modern product offerings. This session will tackle everything you need to know about these newer services and what corresponding accounting rules support the purchase of them.