# Why Medical Software Costs are Rising and How to Plan For It > Practices expect higher medical software costs in 2026. Learn what drives rising budgets and how you can manage spending, prioritize upgrades, and plan effectively. Source: https://www.softwareadvice.com/resources/healthcare-software-spending-trends --- 1 million+ businesses helped. Get advice Get Free Advice [Home](https://www.softwareadvice.com/) / [Resources](https://www.softwareadvice.com/resources/) / Medical Software Spending Trends: Why Costs Are Rising and What Practices Can Do # Medical Software Spending Trends: Why Costs Are Rising and What Practices Can Do By: [Lisa Morris](https://www.softwareadvice.com/resources/author/lisa-morris/) on April 28, 2026 On this page: - Costs are rising, and software leads the pack - Recommendation 1: Name the drivers to pinpoint what’s pushing software costs up - Recommendation 2: Make procurement do more work by setting guardrails that curb inflation - Recommendation 3: Don’t let compliance surprises derail the budget - Recommendation 4: Fix hidden drains by making telehealth choices that reduce total cost - Recommendation 5: Be deliberate in evaluating vendors to avoid overspending - Put numbers to the plan: the budgeting worksheet (download) - What your peers are prioritizing (and what you should do next) Inflation is hitting healthcare software budgets harder than any other line item this year. According to our [2026 Medical Software Buyer Trends Survey](https://www.softwareadvice.com/resources/2026-medical-software-trends/), which polled 400 physicians in the U.S., two‑thirds of practices plan to increase their [medical software](https://www.softwareadvice.com/category/4527-medical/) spend in the next year, mainly due to rising prices. This means small or independent practices need a clear plan to control the cost of running a medical practice without stalling needed upgrades. This report explores five key recommendations for doing exactly that. Along with some other findings on medical software spending trends from our recent survey, including:  - Software costs are rising faster than other practice expenses: 77% of healthcare leaders expect software/technology costs to increase—more than any other expense. - Two‑thirds of practices plan to increase software spending next year: 67% expect to raise their software budget; only 8% plan to reduce it. - Vendor price increases are the top driver of rising budgets: 28% cite price hikes as the main reason for spending growth—slightly ahead of adding new software (27%) and new functionality (19%). - Security and compliance gaps will require mandatory investment: 79% say they need moderate or significant improvements in data protection, and 80% report gaps in vulnerability management. - AI interest is rising, but ROI depends on where practices start: 49% report higher expectations for AI; only one‑third use AI features today; 88% of those measuring ROI report positive returns. ## Costs are rising, and software leads the pack Healthcare leaders expect higher costs across categories in 2026, but software spending, in particular, is projected to rise more than any other expense. While many practices anticipate spending more on facility expenses (74%), supplies and equipment (71%), maintenance (68%), insurance/legal fees (66%), and regulatory/compliance costs (65%), it is software and technology investments that are reportedly the most likely to rise (77%), outpacing every other category. Practices are adjusting their budgets accordingly: 67% plan to increase medical software spending year over year, while only 8% plan to reduce it. **Why this matters:** If software inflation is ahead of general practice inflation, leaders should prepare for higher ongoing software costs and tighten procurement processes to avoid overspending. The broader trends from our full [2026 Medical Software Trends report](https://www.softwareadvice.com/resources/2026-medical-software-trends/)—rising costs, workforce strain, and tech adoption—underscore the urgency here. ## Recommendation 1: Name the drivers to pinpoint what’s pushing software costs up ### 1) Vendor price increases are real—and primary.  Among practices increasing their software budgets, the top reason is “software pricing has increased” (28%), ahead of adopting new software (27%) and adding functionality (19%). ### 2) New purchases and module add-ons raise costs.  Practices are still modernizing their tech stacks by shoring up things like patient engagement tools, scheduling, and revenue management systems. And many are planning purchases of AI/analytics next—expansions that will absolutely elevate total contract value. ### 3) Security and compliance catch‑up is unavoidable.  Most practices say they need moderate or significant improvement on data protection/network security (79%) and vulnerability management (80%). This is a signal that practices will spend on controls, audits, training, and tooling sooner, rather than later. ### 4) Integration and workflow fixes aren’t free.  “Integration with existing systems” (35%) and “managing or improving clinical workflows” (41%) are top software challenges—often solved via paid interfaces, implementation services, or switching fees. ### 5) Telehealth tool mix adds hidden work.  About 40% of practices that see patients virtually [use general video tools](https://www.softwareadvice.com/resources/future-of-telehealth/) (e.g., Zoom/Teams), and nearly a third report EHR integration issues—both can create downstream manual steps and support costs. ### Bonus Tip: Treat AI as a budget lever and phase where ROI is clearest [When it comes to AI in healthcare](https://www.softwareadvice.com/resources/healthcare-ai-benefits/), interest is rising, adoption is uneven, and payback depends on execution. Nearly half (49%) report higher expectations for AI this year, but only about one‑third currently use AI features. Among adopters that measure ROI, 88% report positive ROI, but many aren’t even tracking a return on their AI investments.  Where ROI tends to land first in practices that already use AI: - NLP for documentation (42%) and LLMs (36%) to reduce time on charting and routine communications. - Clinical decision support (31%) to guide diagnoses and standardize care pathways. What to watch: skills gaps, privacy/security, and over‑reliance concerns are among the most cited AI challenges, implying cost for training, governance, and controls. ## Recommendation 2: Make procurement do more work by setting guardrails that curb inflation SMBs can slow the rising cost of running a medical practice by tightening how software is selected, priced, and implemented. Here are some ways to do that:  **Rationalize before you buy.** Practices already use an average of 3.23 products; and it’s easy to lose track of all the things you’re paying for. To avoid this, start by mapping out all of your tools, owners, users, and integrations. Then target vendor consolidation where features overlap. **Negotiate what actually drives cost.** Price is both a top buying criterion and a top dissatisfaction factor, so lock in pricing when terms meet your expected budget levels. When negotiating contracts, tie multi‑year terms to capped annual uplifts, get line‑item pricing for AI add‑ons, and require clear rate cards for interfaces and data migration. **Pay for outcomes, not promises.** Make integration deliverables milestone‑based (e.g., successful Continuity of Care Document (CCD) import, claim adjudication feed live), with acceptance criteria and holdbacks. “Integration with existing systems” is a top cited challenge, so structure your contracts accordingly. **Sequence “need‑to‑run” before “nice‑to‑have.”** Buyers rate security (65%), functionality (59%), ease of use (57%), and price (49%) as critical; scorecard these first, then consider customization and training resources. ## Recommendation 3: Don’t let compliance surprises derail the budget HIPAA‑aligned upgrades are not optional. Most practices anticipate moderate or significant improvements needed across access controls and device security, incident response, patient access/rights, and training and awareness.  Data protection and vulnerability management lead the gaps, which will result in a future spend on things like MFA, encryption, patch management, network segmentation, regular scans, and tabletop exercises. Stage investments by risk. Prioritize controls tied to ePHI exposure and business‑continuity impact; document risk acceptance where deferral is deliberate. These steps align with our broader [2025 Medical Software Trends report](https://www.softwareadvice.com/resources/2026-medical-software-trends/), which emphasises cybersecurity as a top challenge. ## Recommendation 4: Fix hidden drains by making telehealth choices that reduce total cost If your virtual‑care program still uses general‑purpose video tools, evaluate whether they are adding hidden costs or consuming more time than they should. Look for things like: - EHR documentation gaps that require copy‑paste or manual attachments. - Billing/reimbursement friction if visit types and codes aren’t captured from the visit workflow. - Security reviews and BAAs that add internal administrative work. Given that **around 40% of virtual‑care practices use general video** and **integration issues with EHRs** affect nearly a third, the smarter choice is either a healthcare‑specific platform or explicit, tested integrations with your EHR/PM. Budget for remediation or migration to reduce long‑term friction. ## Recommendation 5: Be deliberate in evaluating vendors to avoid overspending Anchor your scorecard to what you should actually value. Security, functionality, ease of use, and price are all ranked “extremely important” responses in our survey, so you’d be wise to use these as gating criteria before moving on to consider secondary features. Spot future cost creep early by looking out for red flags like steep per‑user escalators, mandatory AI bundles, vague integration language (e.g., “available via partner”), and premium support tiers without response‑time SLAs. Insist on proof. Ask for a proof‑of‑concept that exercises your core workflows (e.g., e‑prescribe with CDS alerts, prior auth submission, denial worklists), a small‑scale migration pilot with acceptance criteria, and references from similarly sized practices in your specialty. ## Put numbers to the plan: the budgeting worksheet (download) To make this practical, we’ve created a simple Excel budgeting worksheet that allows practices: - Calculate baseline run‑rate (current monthly spend + licenses). - Project inflation impacts (annual vendor uplifts). - Model adoption changes (new seats, modules, security/compliance upgrades). - Consider one‑time costs (implementation, training) and a contingency line. **Download:** [Medical Software Budgeting Worksheet 2026](https://assets.ctfassets.net/o5y0ehllhbif/63pdTc1IIW2ia3Vt4b9FAK/66670e8476e91436d619e04e7fa22891/Medical_Software_Budgeting_Worksheet.xlsx) The budgeting worksheet helps by translating your plans into concrete budget projections—capturing expected price uplifts, add‑ons, integration work, and compliance upgrades—while also enabling clear scenario comparisons, such as moving from general‑purpose video tools to purpose‑built telehealth platforms or phasing AI adoption over time.  It consolidates recurring, one‑time, and contingency costs into a single annual budget figure for financial review. What’s inside: - Inputs: practice size, current spend, expected price uplift, new modules and seats, per‑seat costs, security/compliance, one‑time services, contingency. - Summary: monthly and annualized totals, including implementation/training and contingency. - Assumptions: editable items (months in year, how uplifts apply, amortization guidance). ## What your peers are prioritizing (and what you should do next) Rising costs and workforce strain continue, but practices are not standing still—they’re increasing software budgets, modernizing stacks, and exploring AI where it can make a measurable difference. Your next steps: 1. Run the budget model with current contracts and expected uplifts; set a target to keep software inflation below your overall practice cost growth. 2. Sequence investments: (a) security controls in the highest‑gap areas; (b) integration improvements tied to milestone‑based payments; (c) AI features with clear payback, starting with documentation and administrative workflows. 3. Negotiate and verify: treat price escalators, AI add‑ons, and integration commitments as negotiable items; request pilots and references from practices of similar size. Criteria priorities and integration challenges from the survey support this stance. * * * ### Survey methodology Software Advice’s 2026 Medical Software Trends Survey was conducted online in September 2025 among 400 physicians in the U.S. employed full-time in medical practices. The goal of this study was to understand the timelines, organizational challenges, research behaviors, and adoption processes of medical software buyers. Respondents were screened to ensure they were involved in medical software purchasing decisions. The study included 134 small practices (1-5 licensed providers), 144 medium practices (6-20 licensed providers), and 122 large practices (more than 20 licensed providers). Why Medical Software Costs are Rising and How to Plan For It