ERP Systems in Healthcare: Key Functionality, Advantages, and Adoption Strategy

Having reached $5.64 billion in 2021, the global medical enterprise resource planning (ERP) software market has been growing at a 6.8% CAGR ever since.

This steady growth can be attributed to multiple factors, including rising healthcare costs (+3.1% in 2024), employee shortages, which could amount to 124,000 physicians by 2034, and emerging healthcare challenges, such as the ageing population, staggering obesity rates, and novel viruses.

To address these issues, healthcare organizations are increasingly adopting modern technology tools, including electronic health records (EHR) and electronic medical records (EMRs), connected diagnostic and patient care equipment, artificial intelligence (AI) algorithms uncovering insights in vast amounts of medical data, and patient engagement solutions.

Healthcare ERP systems often serve as a cornerstone of these transformations, providing a 360-degree view into a medical facility’s operations, inventory availability, and process efficiency.

In this article, a group of innovation analysts from Symfa, a prominent ERP development company based in the EU, will identify the key features of healthcare ERP systems, list the benefits of using such systems, and provide some practical tips for implementing ERP in medical organizations.

Understanding Healthcare ERP Systems

ERP solutions are used across all industries and sectors.

Essentially, an ERP solution can be viewed as a single platform that enables businesses to manage various aspects of their operations, such as finance, procurement, personnel, manufacturing, and logistics.

The core value of ERP solutions lies in their ability to aggregate data from various technology systems used by a company and transform it into actionable insights. This is possible thanks to built-in traditional and, as of lately, AI-based data analytics and reporting tools.

Top 7 Capabilities of Medical ERP Systems and the Benefits They Bring to the Table

In the healthcare industry, the indispensable features of an ERP solution include:

  1. Integrating and synchronizing data across different medical technology systems, like EHRs, laboratory and pharmaceutical software, point-of-care solutions, patient portals, and inventory management applications. Built by various vendors and storing data in various formats, these systems frequently create silos within medical organizations. A lack of data interoperability between medical software systems remains a persistent obstacle to achieving value-based care, despite the fact that six out of ten US hospitals are now proactively addressing this challenge.
  2. Convenient management of patient records, including medical history and treatment records. The patient management component of ERP systems allows doctors to quickly find, access, and share medical information within the facility’s walls while eliminating security risks. This helps streamline the delivery of care and reduce medical errors, which result in 100,000 patient deaths per year in the USA alone.
  3. Ensuring compliance with healthcare industry regulations and standards, such as the US Health Insurance Portability and Accountability Act (HIPAA), whose violations could lead to hefty fines exceeding $2,000,000 and even imprisonment.
  4. Efficient management of medical equipment, pharmaceuticals, and other inventory, which helps ensure medical supplies are well-stocked, timely reordered, and easy to locate. The use of ERP systems with just-in-time (JIT) inventory management capabilities can help hospitals cut operational costs by 10-17%.
  5. Managing financial aspects of running a healthcare organization, including claims processing, billing, accounting, and revenue analysis. The importance of ERP systems in medical settings cannot be overstated, given the intricate nature of payment operations in healthcare and the wide variety of technologies utilized in the process.In 2022, after the pandemic-related subsidies started to dry out, an independent survey discovered that as much as 88% of US health systems were operating at a loss.
  6. Fulfilling miscellaneous HR functions, including recruitment, onboarding, payroll, and stuff schedules. The corresponding modules of a medical ERP system could help healthcare organizations address the worsening employee shortage crisis while delivering the same level of care to patients. This transformation is achieved by accurately allocating resources, scheduling based on real-time and historical data, and simplifying access to patient and inventory data, all with the help of a single software platform.
  7. Improved analytics and reporting based on end-to-end healthcare application integration and cutting-edge data processing and visualization technologies.By analyzing various operational data, healthcare organizations can streamline a range of tasks, from medical diagnosis to financial performance and resource utilization. Greater use of ERP tools could increase the amount of medical data used for smart decision-making. Currently, this figure doesn’t exceed 60%, even in digital-first organizations.

Things to Consider When Implementing ERP Solutions in Healthcare

A healthcare facility that wants to add an ERP system to their IT infrastructure should think about the following:

  • Does your organization need a bespoke ERP system, or would an off-the-shelf product suffice? There are several prominent medical EHR vendors on the market, including NextGen, Cerner, eClinicalWorks, Athenahealth, and Practice Fusion. Although these solutions normally incorporate most or all of the features we’ve enumerated in the previous section, ready-to-implement ERP systems have their peculiarities and may be better-suited for specific types of medical organizations and tasks. For example, Practice Fusion is designed for independent practices, while Kareo Clinical is best for handling medical billing in smaller hospitals. Meanwhile, Cerner is a good option for a medical organization with multiple departments and sites. Commercially available ERP tools may also have high licensing and implementation fees and interface poorly with your existing software, especially if your organization relies heavily on legacy systems built with outdated technology. Provided you address a reliable healthcare software development company, you’ll be able to create an enterprise resource planning system that fully addresses your business needs, despite the fact that the initial implementation expenses will be significantly higher.
  • The preceding point raises yet another valid question: do you have a clear vision of how an ERP solution will align with your organization’s business goals, thereby improving medical care quality and bottom lines? To answer this question, you may need to hire skilled technology consultants and business analysts who will thoroughly examine your business processes, data, and IT systems before developing a dependable ERP implementation plan.
  • Does your organization have a robust change management framework that, among other things, includes provisions for ongoing employee training? Resistance to change is one of the primary reasons why 70% of all digital transformation projects fail. To make sure your employees jump on the ERP bandwagon and start reaping the technology’s benefits to the fullest, create comprehensive, department-specific educational courses for your staff, onboard your workforce on the key functionality of the ERP system, and democratize access to critical data. In the long run, this will result in improved decision-making across all units and job functions while reducing employees’ reliance on your in-house or external IT team.

That’s all for today. We hope that this overview of medical ERP systems and their benefits will assist your organization in selecting the best enterprise resource planning solution and avoiding some of the most common ERP implementation errors, such as purchasing an overpriced software-as-a-service (SaaS) solution and ignoring human factors.

About the Author

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Mirko Humbert

Mirko Humbert is the editor-in-chief and main author of Designer Daily and Typography Daily. He is also a graphic designer and the founder of WP Expert.