Calculating the Return on Investment (ROI) of Custom Telemedicine Software

Have you ever consulted without physically seeing your patients?

If yes, then this is where the inception of the idea of telemedicine came into the picture almost a century ago. However, as technology has successfully bridged the gap between communications, the mode of virtual care delivery slowly became a norm in the healthcare industry.

Furthermore, as the healthcare industry is slowly being shaped by the advancements in healthcare technology, the role of telemedicine is becoming more and more evident. The major benefactor of this is the healthcare providers and patients; telemedicine has become the pinnacle in creating a win-win situation in the world.

Having said that, being a healthcare provider adopting telemedicine for care delivery in the day-to-day code of conduct of business, what choices do you get when you scratch the surface of an ideal telemedicine technology?

Well, it either comes in the form of off-the-shelf telemedicine software or custom telemedicine software. While off-the-shelf software solutions have placed the foundation of telemedicine software, today, healthcare practices are turning towards custom healthcare software solutions for telemedicine for ease of care delivery.

However, the concern about return on investment is what is stopping them from leveraging the power of telemedicine technologies.

In this blog, let’s see how you can calculate the ROI of custom telemedicine software and the cost-benefit analysis for telemedicine to grow your business with it. So, without further ado, let’s get started.

Understanding the Costs Involved in Custom Telemedicine Software Development

Before calculating the return on investment, let’s understand the factors that influence the cost of development with telehealth platform cost assessment.

• Development Costs: The development is obviously the first factor that affects the telemedicine app development cost. Here, the labor of healthcare software developers makes up most of this cost, followed by hardware for developing such infrastructure.
• Ongoinging Maintenance and Support Costs: While most of you would consider that once the software is developed, the job is done. Well actually, after the development of custom telemedicine software, the job actually starts. Since it will be dealing with data and other things, ongoing maintenance and support for ensuring the smooth functionality of the software is the next thing that influences its cost.
• Integration Costs with Existing System: Living in the 21st century, your practice must already have some systems that makes day-to-day conduct of business much easier. And your custom telemedicine software requires you to sync with it for your practice’s smooth functioning. Here, the smooth integration is something that further affects the cost of telemedicine software development.
• Licensing and Regulatory Compliance Costs: Last but not the least, the compliance cost that involves training, risk assessments and audits is what influences the cost of custom telemedicine software.

While these are some of the major aspects that influence the development cost of custom telemedicine software, knowing the complete picture is essential for telemedicine development cost analysis and investment returns in telehealth.

Identifying and Quantifying Potential Revenue Streams

Now that we’ve identified the cost that goes behind custom telemedicine software development let’s understand the potential revenue streams that can be generated using this software. Considering the multiple channels that can help you generate revenue, here are some of the potential revenue streams that can bring in cash flow to your practice:

• Direct Revenue from Patient Fees: The consultation fees that your patients pay are one of the major sources of revenue, and you know it too! There are different pricing models that you can use to charge your patients pay-per-visit, subscription-based, and bundled packages, which are some of the best practices in the healthcare industry with respect to providing virtual healthcare services with telemedicine software.
• Partnership with Healthcare Providers: The healthcare industry is one of the most collaborative industries in the world; its functioning depends highly on other healthcare providers as well, such as pharmacies, test laboratories, etc. Collaborating and partnering with these healthcare providers with your telemedicine software is another way for you to generate revenue.
• Data Analytics and Insights: While your custom telemedicine software solution will collect a lot of insightful data on patients, it can be useful for various purposes, such as drug development, research, and other purposes. Here, you can monitor this data for its improved healthcare infrastructure but only for ethical use and after getting consent from the patients.
• Value-based Care Models: In value-based care models, patients’ health outcomes are prioritized. In this model, telemedicine plays a crucial role and can help you generate more revenue.

Calculating Tangible and Intangible Benefits

The return on investment in the healthcare industry is not only in the form of money. There are some tangible and intangible aspects that should be considered when calculating the benefits of implementation of custom telemedicine software.

• Improved Patient Access and Satisfaction: By allowing patients to connect with you through their smartphone or laptop, you improve their access to healthcare services and professional consultation. This improvement in accessibility also contributes to the satisfaction of the patient in receiving healthcare as well, especially for patients in rural or underserved areas.
• Enhanced Care Quality and Outcomes: With telemedicine, a holistic approach to healthcare can be adopted. With remote access to care services and integrations, access to information is just a click away, which allows you to take a proactive approach. Along with that, with improved communication and collaboration, you enhance the quality of care, which will be directly reflected in the improved patient outcomes.
• Reduced Healthcare Costs: By giving patients access to connect with healthcare providers, you directly eliminate unnecessary visits, and your resources can be put to better use. This way, you reduce the healthcare expenditure, which can further contribute to growing your practice revenue.
• Increased Operational Efficiency and Staff Productivity: The telemedicine software solution you will be developing will also act like your custom healthcare practice management software. It can streamline administrative tasks and improve staff productivity, which will reduce the entry of manual labor and allow providers to focus on patient care.

Incorporating ROI into Your Telemedicine Software Development Strategy

Now that you know the entire financial aspect of your healthcare practice, it’s time to strategize your custom telemedicine software development with respect to it. So, without further ado, let’s get started.

• Setting Clear ROI Goals: Set clear goals with respect to the return on investment that you’ll be expecting from the software development. This can be before the start of the project and needs to be communicated with the development to align the software with your goals.
• Tracking and Measuring Key Performance Indicators (KPIs): You will also need to track and measure the ROI of your software. This will help you understand if you’re able to achieve your goals or not. To give you a headstart, some of the KPIs that you can measure are patient satisfaction, utilization rates, and cost-saving possibilities.
• Regularly Reviewing and Adjusting the ROI Calculation: One of the best ways to improve the financial performance of your practice is to regularly review your KPIs and adjust your goals with respect to them. This analysis should also be used to make informed decisions with respect to the changes in your practices and advancements in telemedicine technology.

Conclusion

If you’re still reading this, then we’ve almost covered all the major financial aspects of your practice and how custom telemedicine software can help you improve it. Furthermore, it is important to have an idea about the ROI of your custom telemedicine software because it involves significant investments and changes in the functioning of your practice.

On that note, let’s help you get started with the process of custom telemedicine software development which will give your practice a financial advantage in the modern-day healthcare industry.

Frequently Asked Questions

1. What is the average ROI for telemedicine software?

The average ROI for telemedicine software varies widely depending on factors like practice size, patient demographics, and services offered. However, many studies show that telemedicine can significantly improve ROI through increased patient access, reduced overhead costs, and improved patient outcomes. Some practices report ROI as high as 300% or more.

2. How long does it take to see a return on investment from telemedicine?

Seeing a return on investment (ROI) from telemedicine can vary depending on factors like the scale of implementation, patient demographics, and service offerings. Some practices may start seeing positive ROI within a few months, while others may take longer. Key factors influencing ROI include increased patient access, reduced overhead costs, improved care coordination, and enhanced revenue streams through new services.

3. What are the risks associated with investing in telemedicine software?

Investing in telemedicine software carries risks such as:

• High development costs: Creating and maintaining sophisticated telemedicine platforms can be expensive.
• Regulatory hurdles: Compliance with healthcare regulations and data privacy laws can be complex and costly.
• Cybersecurity threats: Protecting patient data and ensuring platform security is a critical challenge.
• Market competition: The telemedicine market is competitive, with established players and new entrants.
• Reimbursement challenges: Securing consistent and adequate reimbursement for telemedicine services can be difficult.

4. How can I choose the right telemedicine software provider?

Choosing the right telemedicine software provider involves considering factors like:

• Features: Ensure the software offers features essential for your practice, such as video consultations, e-prescribing, and patient portals.
• Integration: Check if the software integrates with your existing EHR and other systems to streamline workflows.
• Security: Prioritize a provider with robust security measures to protect patient data.
• Cost: Compare pricing plans and consider long-term ROI for telemedicine, including potential add-on fees.
• Support: Evaluate the provider’s customer support services to ensure timely assistance when needed.

By carefully considering these factors, you can select a telemedicine software provider that aligns with your practice’s specific needs and enhances patient care.

5. What are the benefits of using custom telemedicine software?

Using custom telemedicine software offers several benefits:

• Tailored Solution: Software can be built to meet specific needs and workflows.
• Enhanced Patient Experience: Personalized features can improve patient satisfaction.
• Improved Efficiency: Streamlined processes can save time and resources.
• Data Security: Robust security measures can protect patient data.
• Scalability: Software can grow with the practice’s needs.

Custom telemedicine software provides a flexible and efficient solution for healthcare providers.

6. Can ROI be negative?

Yes, ROI can be negative. When the costs of an investment exceed the returns, it results in a negative ROI. This indicates a loss on the investment. For example, if a practice invests $100,000 in a new product but only generates $80,000 in revenue, the ROI would be negative.

7. How often should I calculate my telemedicine ROI?

Telemedicine ROI calculation at least quarterly to track its performance and make necessary adjustments. This allows you to identify trends, measure the impact of changes, and ensure your telemedicine program aligns with your overall business goals.

8. How do I calculate the total cost of ownership (TCO) for my telemedicine software?

To calculate TCO for telemedicine software, consider:

• Software licensing fees: Annual or monthly costs.
• Hardware costs: Computers, cameras, and network equipment.
• IT infrastructure: Server, storage, and network maintenance.
• Staff training: Time and resources for training employees.
• Ongoing support: Technical support and maintenance costs.
• Integration costs: Connecting with existing systems (EMR, EHR).

Add up these costs over the software’s lifespan to determine the total TCO.

9. What is the payback period for a telemedicine investment?

Telemedicine investments typically have payback periods ranging from 2 to 5 years. This varies depending on factors like investment size, patient volume, and reimbursement rates. However, the long-term benefits, such as improved access to care and reduced costs, can make telemedicine a worthwhile investment for healthcare providers.

10. How can I measure the intangible benefits of telemedicine, such as improved patient satisfaction?

Intangible benefits like patient satisfaction can be measured through:

• Surveys: Directly ask patients about their experience, convenience, and overall satisfaction.
• Qualitative interviews: In-depth discussions can reveal valuable insights into emotional benefits.
• Social media monitoring: Analyze online comments and feedback to gauge public perception.
• Repeat business: Increased patient appointments can indicate higher satisfaction levels.
• Reduced complaints: Lower complaint rates suggest improved patient experiences.

11. How can I calculate the ROI of telemedicine if my patients are not billed directly for telemedicine services?

Telemedicine software ROI calculation without direct patient billing:

• Identify costs: Track expenses like equipment, software, staff training, and bandwidth.
• Measure benefits: Analyze increased patient access, reduced no-shows, improved efficiency, and potential telemedicine cost savings for patients.
• Calculate ROI: Divide the net savings (benefits minus costs) by the total investment.

Key considerations: Indirect benefits like improved patient satisfaction and reduced overhead can significantly impact ROI.

12. What is the impact of telemedicine on patient outcomes?

Telemedicine offers several benefits to patient outcomes, including:

• Increased access to care, especially for those in rural or underserved areas.
• Improved convenience and reduced wait times for appointments.
• Enhanced chronic disease management through remote monitoring and virtual check-ins.
• Better medication adherence and overall patient satisfaction.
• Potential telemedicine operational cost savings by reducing unnecessary in-person visits.

However, it’s important to note that telemedicine may not be suitable for all types of conditions or patients.

13. How can I ensure that my telemedicine software is compliant with all relevant regulations?

To ensure your telemedicine software complies with regulations, thoroughly understand and implement HIPAA and HITECH guidelines regarding patient data security and privacy. Additionally, research and adhere to state-specific telemedicine laws and licensing requirements. Consider consulting with legal and healthcare experts to guarantee full compliance.