How to Increase Revenue in Healthcare with Custom Software

Healthcare spending is on the rise, particularly in developed countries like the US and the UK. The challenge for all providers is how to increase revenue in healthcare without sacrificing quality of care.

A 2023 industry survey shows how organizations increasingly turn to software as a solution. Out of 201 US healthcare provider executives, 56% cited software and IT as their strategic priorities—up from 34% in 2022. About half of them are working with or planning on implementing generative AI systems.

When correctly implemented, custom healthcare software brings new cash flow into your practice. The question then is not when, but how to integrate it.

In this article, we’ll start by exploring digital technologies that help you implement remote care, optimize resource allocation, reduce administrative costs, and automate billing. We’ll follow up with our guidelines for developing custom healthcare software based on Techstack’s experience with enterprises and startups. These steps will work both for larger hospitals and smaller medical practices with limited budgets.

Revenue Challenges in Healthcare

There are two main types of healthcare revenue cycle management challenges: workflow-related and industry-related.

Internally, healthcare providers waste about half of their administrative expenses. 2022 research suggests that up to 30% of these costs fall into two categories: billing-related (such as document management and medical coding) and prior authorization (general business overhead, quality assurance, and reporting). US providers spend more on these activities than those in any other developed country.

What’s worse is that healthcare providers still stick to manual paper processes. While 96% of US hospitals have implemented EHR systems, many of them still continue to juggle electronic and paper-based data. A lack of centralized data management leads to inefficient data sharing and bottlenecks that hinder increasing revenue in healthcare.

Externally, projections from McKinsey highlight that the industry faces financial challenges due to rising inflation and labor shortages. Healthcare companies will continue to struggle to hire, retain, and train medical professionals and administrative staff while wages rise.

Complex regulations also complicate administrative overhead and reduce potential visits. Regular insurance policy changes like the recent ICD-11 have made billing more difficult. Many patients are unaware of their healthcare service costs or insurance coverage.

Other significant contributors are canceled visits, especially no-shows without prior notice. Research suggests that just one no-show per day costs up to $26,000 yearly in idle resources.

To address these challenges, specialized healthcare software has stepped in to automate many billing, scheduling, and medical coding tasks. With correct software implementation, you can reduce administrative expenses, downsize your workforce, adhere to the latest regulations, and improve patient experience—all of which contribute to increased hospital revenue.

Custom Software for Increasing Revenue in Healthcare

Custom healthcare software development is ideal for increasing revenue in healthcare. Implementing the right features helps you cut unnecessary admin costs, allocate resources more efficiently, and expand reach to improve profitability.

Let’s look at how this works in different areas.

How to increase inpatient revenue and retention

A great patient experience results in repeated visits and referrals, which boosts your bottom line. Here are some features that help you improve quality of care and streamline administrative tasks.

• Medical data upload. Adding a user-friendly portal makes it easy for patients and their caretakers to upload healthcare data, test results, and other relevant information. Healthcare providers can plan treatment or ask the patient to undergo more tests before the physical visit.
• Automated data extraction. OCR and natural language processing technology extract essential information and medical codes from documents into an EHR, saving money on tedious manual input.
• Cross-provider data sharing. You can ask patients to authorize data and medical history sharing via a simple digital form.
• Digital scheduling tools. Scheduling tools let patients book and manage appointments online. The software can send automatic reminders or suggest earlier visits if a doctor’s schedule slots become available.
• Patient self-service. Self-service goes beyond self-scheduling options to allow users to select doctors or insurance options. This can be extended with 24/7 live chat support, where an AI-powered bot handles basic inquiries.
• Customized notifications. Healthcare software can send you reminders and follow-up notifications via email, SMS, or pop-up messages to reduce missed appointments.
• Education classes. Research shows that 17.8% of Americans had medical debt in 2020. Some patients may benefit from a teaching module that explains different healthcare costs and reimbursement policies.

Features like these improve patient experience and greatly reduce staff workload, leading to higher profits.

How to optimize billing and claims management

Healthcare software with revenue cycle management (RCM) tools manages the large influx of billing and claim data. Industry forecasts suggest that the global RCM market will grow from $273.9 billion in 2023 to around $472 billion in 2030, reflecting a CAGR of 11.5%.

Connecting RCM solutions with EHRs can sort procedures, create invoices, and manage claims. These tools have automated calculation features, validation tools, and customizable business rules. It ensures that healthcare services are billed correctly and that fewer claims are rejected. After all, reimbursement helps patients pay their bills, making it one of the critical considerations for healthcare organizations.

The table below highlights how to increase hospital revenue with revenue management software. For clarity, we’ll compare traditional and software-enhanced processes.

Not all financial operations can be replaced with automated software. That’s why the billing software should have a training module with guides and FAQs. We also recommend offering training and collaborative workshops to non-medical staff concerning procedures and financial red flags.

How to increase hospital revenue with telehealth and remote monitoring

IoT devices and remote patient monitoring (RPM) software enable remote access to healthcare services. Telehealth can foster innovative revenue-generating ideas for hospitals in rural areas where patients have limited access to quality healthcare.

Virtual visits benefit patients with busy work schedules, parents with small children, the elderly, and those with limited mobility. Here are the main advantages of these technologies for providers:

• Increased patient intake. Telehealth allows you to serve patients across geographic boundaries, thus expanding your reach.
• Lower costs per visit. Virtual visits don’t require office space and associated overhead. They reduce the travel expenses for physicians, nurses, and patients and ease the burden on administrative staff. Some telemedicine programs are reported to save around 22% ($113) per visit.
• Paid after-hours services. Traditional after-hours consultations often go unreimbursed. Telehealth ensures these hours are scheduled and billed.
• Fewer unplanned admissions. Unplanned check-ups and ER visits are more expensive than regular consultations. Telehealth and RPM allow continuous tracking of vital signs to detect early-stage problems and schedule consultations in time.
• Reduced readmissions. Remote patient monitoring helps doctors understand if there’s a real need for a physical visit. This can prevent costly hospital readmissions and unnecessary lab tests.
• Improved show rates. Virtual appointments are generally easier to attend, which leads to fewer no-shows. Automated reminders ensure that patients don’t forget their visit.
• Cost-effective follow-up care. Many post-hospitalization checks and consultations can be conducted via telehealth or telemedicine software.

Telehealth and remote care services are often not reimbursed at the same rate as in-person visits. In addition, certain remote monitoring and therapeutic services cannot be billed together, even if both were used on a patient. Healthcare organizations should implement automatic reimbursement verification in telehealth software to capture all billing opportunities and minimize losses.

How enhanced data analytics can increase hospital revenue

Custom healthcare software with data analytics lets hospitals track KPIs and operations and transform raw data into actionable insights. You can use these insights to improve clinical care quality, resource allocation, and patient experience.

With software-enhanced data analytics, healthcare companies can:

Analyze usage patterns. AI-enhanced healthcare software can monitor hospital resource data such as bed vacancy rates, operating room occupation, and medical equipment utilization. This lets you balance resource usage and ensure critical demands are met.

• Identify variations in care delivery. Analyzing care delivery patterns can reveal variations in the length of stay and complications for different patient profiles. For example, you might find that excessive use of imaging prolongs costly hospital stays.
• Improve inventory management. You can get real-time insight into supply and inventory levels and use intelligent algorithms to predict future demand. This ensures you always have the necessary supplies and avoid overstocking those with a short expiration date.
• Streamline the patient journey. Analytical software can identify bottlenecks in patient flow—such as transfer delays—to optimize staffing suggestions and reduce inefficiencies and wait times.
• Automate testing. Configure testing frequencies for tests to eliminate unnecessary expenses. For instance, you can set general caps for blood count tests and urinalysis but then apply exceptions for specific patients.
• Use targeted outreach. Data analytics helps you divide patients into cohorts based on their medical needs and demographics. You can then offer them more relevant healthcare services or products.

We’ve seen how implementing custom software helps optimize resource usage, improve care quality, and cut costs. Now, let’s look at how to increase revenue in medical practice with real-life examples.

Case Studies: Success Stories in Healthcare Revenue Growth

Both private and government healthcare providers are actively adopting AI-enhanced software to increase revenue and operational efficiency.

• Mayo Clinic collaborated with Google Cloud to use generative AI to unify healthcare data across devices, systems, and intranets. The resulting tool allows professionals to search sources that lie outside the scope of traditional software. What’s more, Google Cloud’s toolset complies with HIPAA guidelines for secure storage.
• UC San Diego Health adopted a suite of healthcare analytics applications with health service assessment and training modules. As a result, they decreased acute inpatient admissions by 4.3%, reduced the length of stay by 8%, and increased the follow-up appointment rate by 41.7%, which saved them $883,000 per year.
• Hartford HealthCare launched a centralized AI platform to predict hospital stay durations, patient condition progression, secondary stroke risks, and surgery outcomes, reducing hospital stay length by 7%. The healthcare solution also optimizes scheduling and claims to reduce the time needed to finalize six-week staff blocks from 88 to around 10 hours.
• Chicago-based rehab provider ITEX integrated a telehealth program enabling virtual visits through mobile devices and incorporated note-taking into their EHR system. These solutions are increasing revenue in healthcare by reducing cost per visit, unnecessary readmissions, bed holds, and emergency room transfers.
• MemorialCare Health System implemented an online data management tool that eliminated 415 unneeded process steps. This led to 57,000 saved hours, a $775 reduction in direct variable costs per discharge, and an additional $8.5 million saved annually.
• The US Department of Veterans Affairs implements AI-enhanced software for EHR management, telehealth, speech recognition, and reimbursement verification. These solutions increase hospital revenue by automating administrative tasks and enhancing the quality of care.

At Techstack, we have also developed multiple healthcare software products that have improved financial outcomes.

Implementing Custom Software to Increase Revenue in Healthcare

Here are the essential steps to creating custom software for your healthcare practice by partnering with a software development company.

1. Define the problems

Start by identifying the challenges and needs in your healthcare setting. Outline bottlenecks in your processes, patient needs you’re not meeting, and wasted resources.

Assess your existing software setup and identify all your dependencies. Interview your employees and poll patients about their expectations. This will help you understand which tools you may need to replace and which features to focus on.

2. Choose a software vendor

Look for companies with experience in healthcare software development and a track record of relevant projects. Make sure they understand your pain points and know how to reach your healthcare goals. The optimal partner will ensure compliance with healthcare data security and privacy regulations.

A reliable provider can enhance your initial assessment with their own market research and IT audit.

3. Plan the project

Once you’ve chosen a partner, it’s time to define your timelines, budgetary limitations, and key features. Conduct analytics together with the partner to determine the best ways to increase revenue in healthcare and the features you’ll require for that goal.

We recommend an incremental approach to development. Prioritize the features that help achieve the most revenue gains. After refining the core functionality, you can plan secondary features for subsequent releases.

4. Define the architecture

Cloud-based computing eliminates the need for expensive on-premise installations. Cloud platforms can scale up and down based on your demands and centralize data from EHRs, imaging files, and other systems for a comprehensible view of your operations.

Sometimes, you may prefer an on-premise architecture for security and compliance purposes. Isolated physical infrastructures give you more direct control over your resources and sensitive patient information.

5. Ensure data security

Data breaches lead to big financial losses, including fines and damage to your reputation. IBM's 2023 Cost of a Data Breach Report suggests that the average cost of a detected healthcare data breach has risen by 53% since 2020 to reach $11 million.

In other words, robust data security is critical for protecting your financial worth. This means implementing robust authorization and multi-factor authentication mechanisms and ensuring reliably encrypted data exchange to avoid leaks. It’s also important to implement strict role-based access control policies and train employees on proper data handling.

6. Plan data recovery measures

IBM’s 2023 study showed that about 40% of breaches resulted in data loss. A cloud-based disaster recovery plan will ensure your software regularly backs up electronic records so you can recover them after data corruption incidents, ransomware infections, or natural disasters.

7. Design the UI/UX

Focus on creating an intuitive experience for doctors and patients. Take time to develop wireframes to ensure the proper layout of interactive elements. Follow up with mockups with colors, typography, and images. If possible, seek feedback from healthcare providers and other target users.

8. Develop an application with core features

A minimum viable product (MVP) will help you test key features in real-world conditions and understand if the doctors and patients find it useful, and more broadly, whether the project is moving in the right direction.

9. Conduct quality assurance and iterate

Conduct extensive testing to verify the quality of your software in terms of functionality, performance, security, and user acceptance. Quality assurance ensures that the software will comply with government regulations and policies.

Gather feedback both during and after deployment. A continuous feedback loop helps ensure that your software is useful, stable, and safe to use in a healthcare environment.

Boost Your Revenue with Reliable Healthcare Software

A custom software solution helps increase revenue in medical practice in several ways. Software directly reduces administrative costs and indirectly contributes to revenue improvement by enhancing care quality, patient satisfaction, and decision-making.

Today, even government institutions are embracing innovative AI-powered solutions to keep pace with market demand and industry challenges. Yet many companies fail to successfully integrate software solutions into their workflow or lack the budget for development.

At Techstack, we’re here to help. Our team has the expertise to guide you through the development and integration. Contact us to learn how we can enhance the profitability of your healthcare business.