Health systems spent years accumulating technology tools, layering point solutions on top of one another as digital transformation accelerated and vendor options multiplied. CIOs are now paying to carry the weight of that accumulation and many have decided it’s time to let go.
Across systems of every size, IT leaders describe a convergence of forces — shadow IT proliferation, aggressive vendor repricing, AI licensing costs that outpace proven return and technical debt that consumes operating budget — that has made platform consolidation the dominant response to cost pressure. It’s also pushing CIOs to pursue conversations with their IT vendors earlier than expected.
Deb Muro, CIO for El Camino Health in Mountain View, Calif., said the hidden costs of decentralized purchasing have become one of the most significant drags on IT budgets.
“Shadow IT driven by years of decentralized purchasing has created redundant tools, software and renewal increases that significantly surpass inflation,” Ms. Muro said. “It is common for technology to experience repricing around AI features often at higher tiers with consolidation and license rationalization becoming recurring savings levers. Technical debt and legacy systems often consume a disproportionate share of the operating budget just to keep it functional, impacting modernization.”
A recent survey from the College of Healthcare Information Management Executives found health systems are already saving millions of dollars by eliminating IT applications and many leaders say the discipline required to sustain those savings is reshaping portfolio governance.
Vendor repricing is appearing at the contract level as well. Muhammad Siddiqui, CIO for Reid Health in Richmond, Ind., said several major platforms shifted to consumption-based or AI add-on pricing models this year, making total cost of ownership harder to forecast.
“That forces prioritization conversations we did not expect to be having mid-cycle,” Mr. Siddiqui said.
The consolidation response is visible across security, infrastructure and clinical applications alike. Dennis Leber, PhD, CISO for Erlanger Health System in Chattanooga, Tenn., said his team has moved aggressively toward platform-based solutions to eliminate redundancy.
“Rising labor costs, vendor spend, and regulatory burden are fundamentally reshaping our technology roadmap,” Dr. Leber said. “We’re aggressively consolidating our security and infrastructure stack — prioritizing platform-based solutions, particularly within Microsoft, to reduce duplication, licensing and operational overhead.”
At Palo Alto, Calif.-based Stanford Health Care and Stanford School of Medicine, two senior technology leaders described similar consolidation efforts. Ann-Marie Yap, executive director of technology and digital solutions, said rising costs for cloud storage, hardware and cybersecurity have forced a more disciplined approach to the portfolio.
“We’re also consolidating and standardizing platforms to reduce redundancy and total cost of ownership,” Ms. Yap said. “Ultimately, our focus is shifting from simply deploying technology to demonstrating clear value, scalability, and sustainability across the enterprise.”
Puneet Waraich, senior director of IT clinical applications at Stanford, said the consolidation push has elevated application rationalization and contract management from peripheral concerns to central ones.
“Amid ongoing financial headwinds across healthcare, organizations are under increasing pressure to reduce operating costs,” Mr. Waraich said. “This has elevated the focus on application rationalization and more disciplined, strategic contract management. At the same time, the traditional mandate of ‘doing more with less’ has taken on renewed urgency, driving more intentional prioritization across the technology portfolio.”
For rural and community health systems, the consolidation philosophy often means leaning harder into existing enterprise investments rather than adding new layers. Bob Berbeco, CIO for Mahaska Health in Oskaloosa, Iowa, said the rural health context reinforces a core platform strategy over bolt-on solutions.
“Cost pressures are forcing us to be more disciplined about every technology decision, especially in a rural health system where supportability and long-term value matter as much as innovation,” Mr. Berbeco said. “As a result, our roadmap is increasingly focused on workflow-native capabilities that reduce waste, such as ambient documentation and denial forecasting, while continuing to strengthen foundational investments like data governance, analytics, identity, and cybersecurity. It also means being much more selective about bolt-on tools unless they provide clear incremental value beyond what we can achieve through our core Epic and Community Connect strategy.”
Lisa Stump, executive vice president and chief digital information officer at New York City-based Mount Sinai Health System, described the same logic applied to AI: where point solutions once proliferated across vendor pipelines, integrated platforms with proven value are now the threshold.
“That means making sharper choices on platforms over point solutions and aligning with strong partners, so we prioritize use cases that create real value through financial returns, better outcomes, higher throughput, or reduced administrative burden,” Ms. Stump said. “Delivering and documenting that value is critical to the success of our enterprise.”
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