Indian hospitals to hike IT innovation spend by 20–25% in 2–3 years; EY Parthenon-CII report flags AI, automation and data-driven care as top priorities

• Almost 50% of respondents allocate 20%–50% of their IT budgets to digital innovation
• Improving patient experience, clinical outcomes via tech interventions and data driven decision making – top 3 priorities for future investments by healthcare service providers
• 60% of providers cite capability building and IT upskilling as their top digital challenge

Mumbai, 10 September 2025 – IT innovation budgets in Indian hospitals are set to rise by 20–25% over the next 2–3 years, with nearly half of healthcare providers already allocating 20–50% of their spends to digital innovation, reveals the EY- Confederation of Indian Industry (CII) HealthTech Survey 2025. The report, launched at the CII Hospital Tech 2025 Summit, highlights how automation in patient experience, clinical outcomes, and data-driven decision making is taking center stage. Titled “Unleashing digital momentum to shape the future of healthcare – enabling automation to enforcing transformation”, the report also flags the barriers of legacy systems, workforce readiness, and patient-centric delivery that hospitals must overcome to become future-ready.

Emerging trends driving digital investments

When it comes to prioritizing digital investments, healthcare providers are directing budgets where they see long-term capability gains. Six in ten hospitals plan to invest in IT capability building, followed by BI tools and data lakes (50%). Hardware upgrades and critical application enhancements fall lower on the priority list (10%), while medium-priority areas include data management and cybersecurity.

Evolving AI use cases in clinical areas

Healthcare providers are also leaning into AI with a clear focus on enhancing visibility of clinical data and generating meaningful insights to assist doctors. Top priorities include AI for clinical documentation and data analysis (72%), decision support systems (64%) and imaging (60%). This reflects a pragmatic approach where CIOs are choosing to invest in high-impact applications that enhance data visibility for clinicians, providers and patients, strengthen everyday clinical decision-making thereby improving clinical outcomes.

Reflecting on the findings, Ankur Dhandharia, Partner - Healthcare, EY Parthenon India said, “Our survey highlights both the current state, hurdles and ambition of India’s healthcare sector and makes it clear that leaders have put in place scalable systems and are now prioritizing digital investments to create a seamless patient journey and improve health outcomes. When it comes to AI and analytics adoption, there is a clear shift reflecting move away from pilots to practical, scalable use cases that enhance efficiency and drive data driven decision making. Further, key government initiatives such as ABDM and DPDPA are expected to enable and accelerate this journey. Over the next few years, we expect to see technology in healthcare move from foundational to truly ‘future ready’ - where smart hospitals are patient-centric, efficient, data-driven and health outcome focussed.”

Adding to it, Joy Chakraborthy, Chairman CII HospiTech 2025 said, “For India to unlock the full potential of HealthTech, collaboration across government, industry, and providers will be critical. The next wave of healthcare delivery will be defined by how quickly we can bridge these gaps and enable hospitals to scale innovation without compromising patient trust or data security. The CII-EY HealthTech Survey 2025 provides a timely roadmap for healthcare leaders navigating a fast-changing landscape.”

Identifying barriers in the digital journey

More than half (60%) of healthcare service providers identify capability building and IT team upskilling as their biggest digital challenge, underscoring the sector’s need for a more digitally fluent workforce. Equally pressing are difficulties in integrating data and driving adoption of business intelligence (BI) tools, flagged by 50% of respondents.

While hardware and network infrastructure and data storage and management are rated as moderately challenging, nearly 60% of respondents admit to ongoing struggles with data management. Cybersecurity and patient engagement platforms are seen as additional pressure points.

Beyond technical barriers, organizational readiness is a recurring hurdle. Nearly two-thirds (60%) of CIOs cite resistance to change among stakeholders as their biggest challenge, while 40% point to the difficulty of integrating new applications with legacy systems. While internal strategies like training and effective communication can shift stakeholder attitudes, non-compatible core systems remain a major roadblock to unlocking full digital potential.

Balancing technology with privacy and protection

All leading providers report having strong internal data privacy and protection policies, supported by third-party audits and ISO/HIPAA compliance measures. These findings show that as digital transformation gathers pace, hospitals recognize that trust is central to adoption. Privacy and compliance are not viewed as a regulatory checkbox but as a strategic enabler that ensures patient confidence and sustained digital adoption.

Adoption of Ayushman Bharat Digital Mission (ABDM)

Survey indicated that half of healthcare providers have partially adopted ABDM, while 40% are planning adoption in the near future. The lack of full adoption highlights a critical gap: despite intent, many providers are struggling to operationalize ABDM at scale. Unless adoption accelerates through stronger alignment between government frameworks and provider readiness, India’s digital health ecosystem could remain fragmented instead of realizing true interoperability.

Strategic imperatives for future-ready healthcare: EY’s 5S framework for providers

EY experts emphasize that the transition from a digitally enabled hospital to a truly future ready smart hospital is not a tech project but a phased transition. To accelerate this shift, EY recommends a 5S framework:

• Scalable Infrastructure
  Secure and flexible IT systems that support expansion and integration of digital services, fostering innovation and operational resilience.
• Seamless Patient Engagement
  Use of new and emerging tech such as agentic AI coupled with telemedicine and wearables to create personalised, continuous care and improve patient involvement.
• Strategic Data Usage
  Create unified data systems to connect various sources, enabling real-time insights and holistic patient views\ to support faster decisions, predictive analytics, and AI, making healthcare more efficient and improving patient outcomes.
• Strengthen Sustainability and Compliance
  Integrate privacy, cybersecurity, and sustainable practices into their operations to comply with regulations, safeguard data, lower environmental impact, and enhance trust and resilience.
• Smart AI & Automation
  Streamline administrative tasks, enhance diagnostic accuracy and clinical decision-making using AI and automation to increase operational efficiency and enable more precise, personalized care. 

Notes to Editors

About EY

EY is building a better working world by creating new value for clients, people, society and the planet, while building trust in capital markets. Enabled by data, AI and advanced technology, EY teams help clients shape the future with confidence and develop answers for the most pressing issues of today and tomorrow.

EY teams work across a full spectrum of services in assurance, consulting, tax, strategy and transactions. Fueled by sector insights, a globally connected, multi-disciplinary network and diverse ecosystem partners, EY teams can provide services in more than 150 countries and territories.

All in to shape the future with confidence.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. EY member firms do not practice law where prohibited by local laws. For more information about our organization, please visit ey.com.