The healthcare industry is not just limited to doctors and patients. Though they make up the most part of the ecosystem, other players like pharmaceuticals, insurance providers and healthcare IT companies also contribute significantly to what it is today.
All these major players of the healthcare industry rely on custom healthcare software for day-to-day conduct of business. From improving patient care to boosting their operational efficiency, they serve different purposes for different sections within the industry.
As an investor in custom healthcare software development, calculating the return on investment or the ROI can be challenging. Further complicating the situation is the high-regulated and constantly evolving landscape of custom healthcare software, decoding the return on investment for custom healthcare software, which comes with unique challenges and several considerations.
However, if you have a holistic and comprehensive overview of the benefits of custom healthcare software, then measuring ROI on healthcare software can be quantified.
In this blog, let’s explore the intricacies of healthcare software ROI, along with the healthcare software investment strategy that can help you healthcare cost reduction to optimize healthcare technology for quantifiable results.
Understanding the ROI of Custom Healthcare Software
Before directly jumping to the calculation of return on investment in healthcare software, let’s first understand the ROI of custom healthcare software and what factors it majorly depends on. Here are some factors that will help you understand the software ROI better:
- Beyond Cost Savings: The return on investment for custom healthcare software goes beyond the monetary savings and benefits. For instance, by streamlining the clinical workflow, most of the intricacies in practice management are covered. This way, you will not only save initially by enhancing clinical efficiency but also set a standard of care delivery, which will help you in deriving better patient health outcomes.
- Identify Key Performance Indicators (KPIs): To measure ROI on healthcare software, you first need to identify the key performance indicators to track the progress you have made after healthcare software implementation. These KPIs will help you understand the impact of your custom healthcare software and what are the procedures that have been improved. Along with that, you will also identify the gaps in care delivery, and your practice will help you prepare the roadmap to maximize the ROI of custom healthcare software.
- Short-Term Vs. Long-term ROI: Being a healthcare provider you must encounter the phrase, ‘custom healthcare software is a long-term investment.’ Though this phrase is true, custom healthcare software also comes with both short-term and long-term benefits. That is why it is essential for you to consider and understand both short-term and long-term software ROI. To give you an idea, improved provider efficiency and streamlined workflow come as a short-term benefit, whereas on the other hand, improved patient outcomes on completion of the care plan are often referred to as a long-term benefit. To calculate your ROI of custom healthcare software, considering and quantifying both will give you a nearly accurate estimate.
KPIs to Measure Efficiency and Productivity
Identifying key performance indicators is the most essential part of measuring the efficiency and productivity of your healthcare practice and custom healthcare software. Here are some of the KPIs that will help you in measuring ROI on healthcare software and how it helps your practice:
- Reduced Appointment Scheduling Time: The very first thing that your custom healthcare software improves is appointments. By automating the process, it reduces the appointment scheduling time. Here, both manual efforts and the time spent by healthcare staff are saved. Along with that, it also streamlines the entire care delivery process, allowing healthcare providers to focus more on care delivery. The automation feature of custom healthcare software helps healthcare providers to 34% of the time that they usually spend on manual documentation.
- Improved Data Entry Accuracy and Speed: Integration of healthcare software with several other systems speeds up data entry with accuracy. For instance, when your healthcare system is integrated with EHR systems, any changes will be directly reflected in the EHR and almost instantly in your system. This manual effort of healthcare staff is eliminated, and the entire process of data entry is automated, with every member of the care team being informed. Furthermore, you can measure the improvement in data entry by analyzing the scenario in both cases and how care delivery to the patients has been improved with the reduction in time to care.
- Increased Staff Productivity: One of the benefits of custom healthcare software is the increase in staff productivity. This factor is achieved through a combination of different features. For instance, healthcare providers spend around 34% of their time on manual documentation. Here, custom healthcare software, by automating most of the manual processes such as data entry, appointment scheduling, etc., allows healthcare providers to focus more on care delivery. If your practice is able to treat more patients than a healthcare software implementation, then you would probably have a positive software ROI.
KPIs to Measure Financial Impact
Apart from improved efficiency and productivity of your practice with healthcare technology, for the healthcare practice to move forward, you also need to measure the monitoring ROI of custom healthcare software. So, to help you with that, here are the KPIs to measure the financial impact of custom healthcare software implementation:
- Reduced Administrative Costs: Custom healthcare software helps reduce healthcare costs by automating tasks, improving efficiency, and streamlining workflows. For instance, automating routine tasks like patient registration, appointment scheduling, billing, and inventory management gives your practice enough liberty and time to easily manage practice and focus more on patient care. Along with improved data management practices, healthcare practices do not have to spend additionally on storing patient records, adhering to regulatory compliances, and data analytics. This way, healthcare software allows providers to focus on patient care while reducing administrative overhead and costs.
- Increased Revenue Collection: The cost-benefit analysis of healthcare software reveals that custom healthcare software helps practices in increasing their revenue collections. Automated claims processing, eligibility checks, and payment posting accelerate revenue cycle management by minimizing errors and reducing the time required for claims submission. This way, the chances of claims denials are reduced, and improving collections empowers the practice of streamlining their revenue collections.
- Reduced Readmission Rates: Traditional healthcare practices have struggled to cope with high readmission and emergency visits, impacting the overall efficiency, inventory, and resources of the healthcare practice. However, one of the major benefits of custom healthcare software is that it helps in reducing readmission rates. This highly depends on the type of healthcare software you are developing; for instance, with remote patient monitoring healthcare technology, you can easily monitor patients’ health from their homes. This will empower patients to take care of their health and not visit the clinic for minor inconveniences. Here, healthcare IT infrastructure enables virtual care delivery by improving care coordination, medication adherence, and better resource management for patients in need. This way, by reducing readmission rates, custom healthcare software helps practices allocate resources to the needy and provide better care.
KPIs to Measure Patient Care and Satisfaction
Revenue and practice efficiencies are the core aspects where custom healthcare software directly leaves an impact. However, the major goal of any healthcare practice is to provide better patient care. Your software investment should consider that as well while healthcare software development and software ROI. So, here are some of the key performance indicators for patient care and satisfaction:
- Improved Patient Satisfaction Surveys: After the software implementation, track if the patients are actually satisfied using this healthcare software. Conduct patient satisfaction surveys to track the levels of patient satisfaction. These surveys will not only provide you with gaps that are left behind but also help you improve your software significantly.
- Reduced Patient Wait Times: Typically, there are long waiting lines during care delivery, which is frustrating and consumes a lot of time for providers. With healthcare software enabling virtual care, this gap can be easily filled. Giving patients the liberty to choose the slot they are most comfortable with helps both parties improve their appointment management and streamline their day-to-day activities. Here, the patients can directly connect with the provider virtually at their scheduled time, reducing patient wait time by a significant margin.
Conclusion
By identifying and addressing all these key performance indicators of the custom healthcare software, you can easily calculate the impact it can have on your practice, revenue, and spending. In a nutshell, these KPIs, from reduced administrative costs to readmission rates, make measuring ROI on healthcare software much easier.
Furthermore, if you are considering this beforehand, then this blog can be your guide to strategize healthcare software investment strategy. In this way, the software ROI has more impact than just monetary benefits. So, what are you waiting for? Let’s have a look at cost-benefit analysis healthcare software for your practice for free. Click here to get your free consultation.
Frequently Asked Questions
- How can I calculate the ROI of my healthcare software?
Calculate ROI by dividing net financial benefits (increased revenue, reduced costs) by the total investment. Consider factors like improved efficiency, patient outcomes, and revenue generation. Compare this with a “business as usual” scenario for a clearer picture.
- What are the key benefits of custom healthcare software?
Calculate ROI by dividing net financial benefits (increased revenue, reduced costs) by the total investment. Consider factors like improved efficiency, patient outcomes, and revenue generation. Compare this with a “business as usual” scenario for a clearer picture.
- How long does it take to see a return on investment from healthcare software?
ROI for healthcare software varies widely. Factors like software type, organization size, and implementation quality influence this. While some see returns in months (e.g., EHRs in small practices), others might take years (complex system wide implementations).
- What are the common challenges in measuring ROI in healthcare?
Measuring ROI in healthcare is complex due to factors like long-term outcomes, intangible benefits, varying patient populations, data quality and accessibility, multiple stakeholders with different metrics, and difficulty in isolating the impact of specific interventions.
- How can I justify the cost of custom healthcare software to stakeholders?
Custom healthcare software is an investment, not a cost. It aligns with unique workflows, improves efficiency, reduces errors, and ensures compliance. The long-term benefits in terms of increased revenue, patient satisfaction, and operational excellence far outweigh the initial expenditure.