Prescription for Success: Building a Scalable SaaS Product for the Healthcare Market
Healthcare is rapidly embracing digital transformation, and SaaS products are driving much of the growth in the industry.
The worldwide healthcare SaaS market was worth $21.56 billion in 2023 and with a CAGR of 18.2%, will reach an estimated $42.13 billion by 2027.
Growth is mostly driven by the demand for better patient care, data security, and cost efficiency—but how to capitalize on it?
Building a scalable SaaS solution requires more than just technical know-how—it demands a thorough understanding of the industry’s regulatory landscape and unique needs.
1. Navigating Regulations and Understanding Compliance
Data protection and privacy are important in every industry. However, the healthcare industry is arguably the most regulated.
In the United States, the handling of protected health information (PHI)—or personally identifiable health data— is governed by the Health Insurance Portability and Accountability Act (HIPAA).
Companies that operate in Europe, for example, will also need to comply with standards set out in the General Data Protection Regulation (GDPR).
The penalties for non-compliance can be severe. In fact, some fines for HIPAA violations exceed $2 million in cases that involve willful neglect.
Just as importantly, compliance helps build trust with healthcare providers, buyers, and broader society.
To successfully navigate healthcare regulations, SaaS companies must:
Incorporate data security from the outset, integrating privacy measures into the product rather than adding them later.
Keep abreast of regulatory changes, as frameworks like GDPR have undergone several updates since 2018 that have impacted software design and deployment requirements.
2. Data Protection: A Critical Imperative
Healthcare is a prime target for cyberattacks and is consistently one of the most impacted industries.
In its annual Cost of a Data Breach Report, IBM noted that the average breach cost in healthcare was $9.77 million. IBM also noted that healthcare was the costliest of any industry for data breaches and has held this title since 2011.
This makes data protection paramount. Not only from a compliance perspective but also as a way to maintain patient trust and confidentiality.
To that end, healthcare SaaS companies must:
Adopt multi-layered protection, such as encryption, two-factor authentication (2FA), and real-time monitoring to prevent unauthorized access.
Conduct frequent audits and penetration tests to identify vulnerabilities and address them before they become a threat.
3. Industry-Specific Needs: Tailoring Solutions for Healthcare
Healthcare providers face unique obstacles and as a result, need SaaS products that are fit for purpose. Companies that tailor solutions to account for these complexities experience higher adoption rates.
Considerations in the software development process include:
Role-specific features. Different users such as physicians, nurses, and administrative staff have distinct roles and requirements. As a consequence, they require a unique set of features.
Seamless integration with existing systems, such as electronic health records (EHRs). Interoperability costs the U.S. healthcare system an estimated $30 billion annually, which only emphasizes the need for SaaS products that connect effortlessly with other tools.
4. Scalability: Designing for Growth and Efficiency
Scalable SaaS solutions in healthcare must also accommodate increasing data volumes and user bases without compromising performance or escalating costs.
Here, flexibility is key.
Cloud-based infrastructure
Cloud platforms like AWS and Azure offer the flexibility to adjust capacity based on demand, which makes it easier for SaaS products to support vast data sets and comply with regulations.
Around 70% of healthcare companies now enjoy the security, reliability, and cost-effectiveness of cloud-based infrastructure. This number will increase to 90% by 2025.
Modular architecture
Designing a modular system allows individual components to be updated or replaced without affecting the entire product.
The scalability and flexibility of a model architecture also help healthcare companies comply with evolving regulations and make periodic improvements to functionality.
API-first development
API-first development enables SaaS products to more seamlessly integrate with other healthcare tools and in the process, become more accessible to partners and other end-users.
The API-first approach also increases data security. When developers implement API security and documentation best practices from the start, it leaves APIs less vulnerable to cyberattacks.
Almost 80% of healthcare organizations experienced an API-related security incident in the twelve months to September 2023, which makes the API-first approach of critical importance.
5. Driving User Adoption: Focus on Experience and Change Management
For healthcare SaaS products, user adoption relies on usability and a robust change management framework.
User experience
Healthcare settings are high-pressure environments, so software interfaces need to be intuitive and streamlined. To make sure the product effectively meets real-world needs, users must also be involved in the development process.
Even the most innovative products will experience poor adoption rates if healthcare professionals find them too difficult to use.
Change management
Implementing new technology can disrupt established workflows and, in general, change tends to be met with resistance from employees.
SaaS companies provide structured training, support, and a phased rollout plan to help ease the transition. Analytics is also an important part of user adoption.
Microsoft, for example, tracks how users interact with its software to help those who need additional support.
6. Strategic Partnerships: Expanding Functionality, Integration, and Reach
SaaS solutions don’t exist in a vacuum, and in healthcare, they must be able to integrate with existing technologies, workflows, and systems.
Partnerships expand the capabilities and reach of a SaaS product. They may also add user value by automating processes or eliminating data silos.
Other benefits of strategic partnerships include:
The ability to test and refine the product in a real-world context.
Increased market reach via co-marketing and joint venture initiatives, and
Improved interoperability that promotes FHIR (Fast Healthcare Interoperability Resources) compliance.
To Conclude
The demand for innovative solutions in healthcare is obvious, and while the industry does present unique challenges, it is also full of opportunities for SaaS companies.
Building a scalable product requires a focus on regulatory compliance, data protection, and industry-specific needs such as seamless integration. Other key drivers of scalability include change management, strategic partnerships and a superior user experience.
Talk to ABIG Health today to discover how you can build and scale a successful SaaS product in healthcare. We can advise on all aspects of product development, from market fit analysis to clinical product implementation.
References
https://acropolium.com/blog/building-healthcare-saas/
https://www.hipaajournal.com/what-are-the-penalties-for-hipaa-violations-7096/
https://www.fiercehealthcare.com/tech/industry-voices-interoperability-can-reduce-healthcare-costs-by-30b-here-s-how
https://www.globenewswire.com/news-release/2023/02/22/2613339/0/en/70-of-Healthcare-Businesses-Have-Adopted-Cloud-Computing-DuploCloud-Report.html
https://www.hipaajournal.com/79-of-healthcare-organizations-experienced-an-api-security-incident-in-the-past-12-months
