How to Develop Hospital Management System for Data Automation [Full Guide]

Wandy Suemo posted on May 02, 2023

The need to develop a hospital management system has become increasingly apparent as healthcare facilities worldwide grapple with the repercussions of global pandemics and strained healthcare delivery systems. 

The COVID-19 crisis showcased how rapidly hospitals can be overwhelmed, struggling to provide timely care and maintain effective operations. Even today, the healthcare sector continues to confront considerable administrative challenges, affecting its capacity to serve communities efficiently.

Embarking on the development of hospital management systems is a key strategy to mitigate staff burnout and minimize ongoing delays in patient care. This article provides organizations and stakeholders with an in-depth understanding of these systems’ features, leading examples in the industry, and the nuances of custom HMS implementation.

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The Hospital Management Cycle and Issues Plaguing It

Hospital management systems are comprehensive software solutions designed to streamline hospital operations, improve patient care, and enhance communication among staff members and between staff and patients. 

The following roles and management cycles are involved in the functioning of a hospital management system:

Patient Registration

Role: Receptionist or Front Desk Staff

Patient registration marks the beginning of the patient journey, where demographic information is collected, and a unique patient ID is created. This ID is used to track the patient’s medical records and billing information throughout their interactions with the hospital.

Appointment Scheduling

Role: Receptionist or Medical Secretary

Staff members schedule appointments for patients with healthcare providers, taking into account the doctors’ schedules and patient preferences. The system can also send automated appointment reminders to patients via email or text message.

Medical Records and Documentation

Role: Healthcare Provider (Doctor, Nurse, or Physician Assistant)

Doctors access and update patient medical records, inputting examination findings, test results, diagnoses, and treatment plans. The system securely stores this information, allowing authorized personnel to access and update it as needed.

Diagnostic Tests and Imaging

Role: Healthcare Provider & Diagnostic Staff (Laboratory Technician or Radiologist)

Providers make electronic orders for diagnostic tests or imaging, which are then transmitted to the relevant departments. Once the test results or images are available, lab technicians upload them to the system for review.

E-Prescribing and Pharmacy Management

Role: Healthcare Provider and Pharmacist

The physician creates electronic prescriptions, which the system checks for drug interactions and allergies. The prescription is sent electronically to the hospital’s pharmacy or an external pharmacy, where inventory management and medication dispensation are handled.

Billing and Insurance Claims

Role: Medical Biller or Billing Specialist

This involves developing itemized bills based on the services provided and submits claims electronically to insurance providers. Once claims are processed, the system updates the patient’s account with payment information.

Analytics and Reporting

Role: Hospital Administrator or Data Analyst

The system generates various reports and analytics, helping the hospital admins monitor its performance, identify trends, and make data-driven decisions.

Care Coordination and Referrals

Role: Healthcare Provider, Case Manager, or Care Coordinator

Providers coordinate care between different healthcare providers by sharing medical records, appointment information, and treatment plans, ensuring a seamless transition and improving overall care quality.

Discharge and Follow-up

Role: Healthcare Provider, Nurse, or Discharge Planner

Any of the medical professionals can assist with discharge planning, schedule follow-up appointments, generate patient education materials, and coordinate home care services if necessary. The system also enables patients to access their medical records, view test results, and communicate securely with their doctors.

Experts address 5 Urgent Concerns in Healthcare Administration

Administrative gaps remain a significant concern for healthcare organizations. In this section, we examine five pressing issues that challenge medical institutions’ management.

Staffing Shortages and Employee Burnout

“As nurses fare, so fare patients, because nurses are the canary in the coal mine for patient health. Patients deserve to have safe curative care prioritized over excessive health care profits”.

Theresa Brown, nurse and New York Times bestselling writer, is the author of “Healing: When a Nurse Becomes a Patient,” and “The Shift: One Nurse, Twelve Hours, Four Patients’ Lives.

Healthcare facilities often face challenges in workforce management, such as understaffing and high turnover rates, resulting in employee burnout. Overburdened staff members are more prone to errors, such as administering incorrect medications or dosages, which can negatively impact patients. Consequently, this may lead to extended hospital stays, increased expenses, and unfavorable outcomes.

Communication and Coordination Deficiencies

“To foster confidence in science, it is essential to establish a personal connection. Utilizing reliable communicators across diverse communities and engaging in open conversations, rather than merely disseminating information, is crucial”.

Syra Madad, DHSc, MSc, MCP, is an infectious disease epidemiologist, faculty at Boston University’s Center for Emerging Infectious Diseases Policy and Research

Ineffective communication and collaboration among the healthcare workforce can lead to delays in delivering patient care and treatment. For example, when a physician orders a crucial diagnostic test but does not clearly convey its urgency to lab technicians, the timely processing of test results might be compromised. This could result in a patient’s condition deteriorating, necessitating more complex interventions.

Reliance on Outmoded or Inefficient Systems

Utilizing outdated or inefficient tools to manage hospital systems, workforce, and patients can contribute to mistakes, miscommunications, and care delays. Relying on paper-based patient record systems, for instance, can lead to lost or illegible documents, making it challenging for healthcare providers to access vital patient information. Such delays in accessing information can negatively impact diagnosis and treatment, potentially harming the patient’s well-being.

Lack of Interoperability between Systems

“A designated individual should be responsible for gathering information from public health organizations and integrating it into each patient’s records for effective utilization. It’s improbable that physicians will assume this role, so creating an efficient workflow remains a crucial obstacle to overcome”.

Jacob Reider, M.D., CEO of the Alliance for Better Health and former acting national coordinator for health IT

Another limitation hospitals face is the lack of interoperability between different systems, which can result in fragmented and incomplete patient information. If a hospital uses multiple systems that do not effectively communicate with one another, it can lead to gaps in patient records and a disjointed view of the patient’s health history. This may result in healthcare providers making decisions based on incomplete information, which could negatively impact patient care and outcomes.

Inability to Adapt to Changing Patient Needs and Regulatory Requirements

“Without appropriate safeguards, patients’ data could become a commodity, the AMA health data privacy framework states. “

Hospitals may struggle to manage their systems, workforce, and patients if they are not able to adapt to the evolving needs of their patient populations and changing regulatory requirements. This can include addressing the growing prevalence of chronic diseases, managing an aging population, and implementing new technology or treatment protocols. Failure to adapt can limit a hospital’s ability to provide high-quality care and maintain compliance with regulations, leading to potential penalties and reputation damage.

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HMS Classification With Innovative Examples

Hospital management systems encompass a wide range of types/modules. Here are 5 typical categories.

Patient Registration and Admission 

Manages patient registration, admission, and demographic information, streamlining the process of admitting and discharging patients while maintaining accurate records.

Outpatient and Inpatient Management 

Caters to outpatient and inpatient workflows, including appointment scheduling, consultations, treatment plans, and prescription management, ensuring efficient patient care across different hospital departments.

Billing and Insurance

Manages billing, insurance claims, and payment processing, simplifying financial transactions and improving revenue cycle management while ensuring accuracy and compliance with regulatory requirements.

Inventory and Pharmacy Management 

Oversees the procurement, storage, and dispensation of medications and medical supplies, tracking inventory levels, and minimizing the risk of medication errors or stockouts.

Human Resources and Staff Scheduling 

Handles staff management tasks such as recruitment, onboarding, scheduling, payroll, and performance evaluation, optimizing workforce allocation, and reducing administrative workloads.

3 Investor-Backed Healthcare Management Companies Shaping the Industry

ShiftMed: Revolutionizing Healthcare Workforce Management

ShiftMed is transforming the healthcare workforce landscape by offering an all-encompassing solution that streamlines internal resource management and integrates an on-demand marketplace for external workers. Established in 2016 in the home healthcare domain, ShiftMed has witnessed an impressive 8x revenue growth over the past two years, expanding its services to 110 markets across the United States. Today, ShiftMed boasts a team of around 400 office employees and has recently secured $200 million in funding to propel its growth further.

LeanTaas: Harnessing Data Science for Operational Excellence in Healthcare

LeanTaas, founded in 2010, pioneers the integration of lean principles, predictive analytics, and machine learning to create software solutions that tackle complex operational challenges in healthcare. The company is driven by the belief that advanced data science can optimize real-time systems that enhance patient access, minimize wait times, and reduce healthcare delivery expenses. Currently, over 500 hospitals and 130 health systems in the U.S. utilize LeanTaas’ software, and the company has raised $250 million to date. In a strategic move, Bain Capital acquired LeanTaas to establish a presence in the healthcare AI and automation sector.

Censinet: Elevating Cybersecurity and Risk Management in Healthcare

Censinet is the first HIPAA-secure, cloud-based risk exchange created specifically for healthcare, aiming to eradicate risk by enabling providers, payers, and vendors to collaboratively manage third-party and enterprise risk and enhance cybersecurity in the industry. The company has witnessed significant growth, retaining all its customers and experiencing a 100% Annual Recurring Revenue growth year-over-year through Q3 2022. The company has raised over $22 million.

Must-Have Hospital Management Software Features

A comprehensive Hospital Management System (HMS) should seamlessly integrate all aspects of healthcare services, addressing the needs of patients, staff, and third-party providers such as diagnostic centers and pharmacies. 


As a rule, all parties must be furnished with basic features such as portals, dashboards, & chats. Other elements include:

Patient Features

  • Easy appointment scheduling that allows patients to book, modify, or cancel appointments online.
  • Accessible Medical Records that provide patients with secure access to their personal medical records.
  • Convenient Prescription Refills that enables patients to request prescription refills online.

Healthcare Provider Features

  • Streamlined patient management to help providers efficiently organize and track patient information.
  • Comprehensive EHR integration to centralize patient data, ensuring accurate and up-to-date records.
  • Video Conferencing Tools to facilitate seamless communication between healthcare providers via video, audio, & recordings.

Lab Scientist Features

  • Automated test ordering for Simplifying the process of requesting and managing lab tests.
  • Specimen tracking to track samples and their status throughout the testing process.
  • Rapid report generation to speeds up the creation and sharing of lab test reports.

Hospital Admin Features

  • Integrated financial management helps consolidate billing, accounting, and financial reporting.
  • Staff scheduling and management streamlines the process of creating and updating staff schedules.
  • Real-time performance analytics monitors key performance indicators for informed decision-making.

Pharmacy Department Features

  • Inventory management tracks and optimizes pharmacy stock levels.
  • Drug interaction alerts warns pharmacists of potential drug interactions.
  • Automated refill reminders sends reminders for medication refills to patients.

HR Features

  • Employee database management maintains up-to-date employee information and records.
  • Automated payroll processing streamlines salary calculations and disbursements.
  • Training and development tracking monitors employee training progress and certifications.

Finance & Billing Features

  • Automated invoicing generates invoices and tracks payments automatically.
  • Insurance claims management streamlines the insurance claim submission and approval process.
  • Budgeting and cost analysis helps in financial planning and resource allocation.

Imaging Features

  • Radiology order management manages imaging requests and scheduling.
  • Digital image archiving stores and organizes digital medical images securely.
  • Seamless integration with EHR links imaging data with patient electronic health records.

Analytics & Reporting Features

  • Real-time data visualization displays data in a visually comprehensive and easy-to-understand format.
  • Customizable report generation creates tailored reports based on specific needs and requirements.
  • Performance metrics tracking monitors and analyzes key performance indicators across departments.
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How to Develop a Hospital Management System Software: Step-By-Step Guide

Start by determining whether to opt for existing solutions or embark on the custom development of hospital management systems. 

Off-the-Shelf Solutions for HMS

Prepackaged software solutions offer immediate availability and can be readily purchased to meet basic needs. Examples include: eHospital Systems, SoftClinic HMS, MedStar HIS


  • Lower upfront costs: Generally have lower initial costs compared to custom-built systems.
  • Faster implementation: Can be deployed relatively quickly since they are ready to use.


  • Limited customization: These systems may not be tailored to your healthcare facility’s specific needs, resulting in inefficiencies and workarounds.
  • Scalability concerns: As your facility grows, out-of-the-box programs may not offer the flexibility needed for expansion or integration with other systems.
  • Hidden costs: Additional charges for customizations, integrations, or upgrades can add up over time.
  • Inflexible support- These systems often have standard support packages, that may not meet your needs or response time expectations.
  • Compatibility issues: Integrating off-the-shelf solutions with existing systems or emerging technologies takes time and effort.

Custom Development of HMS

In this scenario, you would engage software development services through freelance or outsourcing models to cater to your specific requirements.


  • Customization:  A custom HMS can be designed to meet the specific needs and processes of your healthcare facility, improving efficiency and workflow.
  • Competitive advantage: Provide features and functionality that off-the-shelf solutions may not offer, giving you an edge in the market.
  • Seamless integration: Allows for seamless integration with existing systems or the adoption of emerging technologies.
  • Dedicated support: Includes tailored support packages, ensuring prompt and personalized assistance.


  • Higher upfront costs: Typically requires a larger initial investment compared to off-the-shelf solutions. However, the long-term value derived from a tailored solution often outweighs the initial cost.
  • Longer time to market: Building a custom HMS from scratch can take longer than implementing a ready-made solution, but the result is a system perfectly suited to your facility’s needs.

Choosing a pre-built platform for your Hospital Management System (HMS) may be the easiest option, but custom development can provide a solution tailored to your healthcare facility’s unique needs. If you decide to take the custom development route, what are the key stages involved in this process?


This phase helps in understanding the problem domain, user needs, and potential constraints or limitations.

  • Requirement Gathering: Conduct interviews, workshops, or surveys with stakeholders to collect requirements.
  • Feasibility Study: Analyze the technical, economic, and operational feasibility of the project.
  • Use Cases and User Stories: Develop use cases or user stories to describe the system’s functionality from the user’s perspective.


High-level and detailed design documents are created to provide a blueprint for the development team.

  • Architectural Design: Choose between monolithic, microservices, or service-oriented architecture, depending on project requirements and scalability needs.
  • UI/UX Design: Opt for a responsive design, mobile-first approach, or platform-specific design, depending on target devices and user preferences.
  • Design Patterns: Select appropriate design patterns, such as MVC, Singleton, or Observer, to ensure a maintainable and efficient code structure.


This phase involves the actual coding and implementation of the software. Developers work on creating the necessary modules, components, and features, following the design specifications outlined in the previous phase.

  • Development Methodology: Choose between Agile, Scrum, Waterfall, or other development methodologies based on project requirements, team size, and desired flexibility.
  • MVP or Full Product: Decide whether to develop a Minimum Viable Product (MVP) first or build the complete product, depending on time constraints, budget, and market competition. It’s always recommended to start with the MVP.
  • Technology Stack: Choose the appropriate technology stack, such as programming languages, frameworks, and databases, based on project requirements, team expertise, and scalability needs.


The testing phase involves validating the software to ensure it meets the specified requirements, is free from bugs, and functions as intended. 

  • Testing Approach: Choose between manual testing, automated testing, or a combination of both, depending on project complexity, budget, and available resources.
  • Testing Levels: Perform unit testing, integration testing, system testing, and user acceptance testing, as needed.
  • Test-Driven Development (TDD) or Behavior-Driven Development (BDD): Consider adopting TDD or BDD practices to improve code quality and ensure alignment with user requirements.


Once the software has been tested and approved, it is deployed in the production environment. This phase may involve installation, configuration, and integration with existing systems, as well as user training and support.

  • Deployment Strategy: Choose between single-stage deployment, blue-green deployment, or canary deployment, based on risk tolerance and desired rollback capabilities.
  • Infrastructure: Decide whether to deploy the software on-premises, in the cloud, or using a hybrid approach, depending on security requirements, budget, and scalability needs.
  • Continuous Integration and Continuous Deployment (CI/CD): Implement CI/CD pipelines to automate the build, test, and deployment processes.


After deployment, the software enters the maintenance phase, which involves monitoring, bug fixing, updates, and enhancements. The software may require periodic updates to address new requirements, optimize performance, or maintain compatibility with other systems.

Support Model: Choose between in-house support, outsourced support, or a combination of both, depending on budget, expertise, and availability of resources.

Update Strategy: Determine the frequency and scope of software updates, such as regular patches, feature updates, or major version upgrades.

Monitoring and Analytics: Implement monitoring tools and analytics solutions to track software performance, user behavior, and potential issues.

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Building HIPAA-Compliant Hospital Management Platforms: Key Considerations

HIPAA compliance is crucial for hospital management platforms in order to protect patient data and avoid potential fines. 

It’s worth noting that HIPAA standards are not limited to a single phase of the software development process when building a HMS. Instead, it should be considered throughout the entire development lifecycle to effectively address security and privacy requirements.

Here are the steps to ensure compliance.

Implement Robust Access Controls

Enforce secure authentication methods and role-based access to restrict unauthorized access to electronic protected health information (ePHI).

Encrypt Data at Rest and in Transit

Use strong encryption algorithms and secure communication protocols to protect ePHI during storage and transmission.

Regularly Conduct Risk Assessments

Identify potential vulnerabilities and threats to ePHI through periodic risk assessments and implement appropriate security measures.

Develop and Enforce Security Policies and Procedures

Establish documented security policies, enforce them, and regularly review their effectiveness to ensure compliance with HIPAA regulations.

Employee Training and Awareness

Educate staff about HIPAA requirements and their roles in safeguarding patient data through ongoing employee training and awareness programs.

Monitor and Audit System Activity

Implement mechanisms to log user activity, detect suspicious behavior, and promptly respond to any security incidents.

Establish Business Associate Agreements (BAAs)

Set up BAAs with third-party service providers who may have access to ePHI, outlining both parties’ responsibilities in maintaining HIPAA compliance.

Maintain a Contingency Plan

Develop a comprehensive contingency plan that includes data backup, disaster recovery, and emergency mode operation procedures.

How Much Does It Cost to Develop a Custom HMS from Scratch?

The cost of developing a custom Hospital Management System from scratch can vary significantly based on factors such as project scope, development team, technology stack, and compliance requirements. 

Actual Cost of MVP Vs. Full-Fledged HMS

MVP Development

An MVP is a simplified version of a product that includes only the most essential features to address the primary needs of users. The goal of an MVP is to test the market, gather user feedback, and validate the product idea before investing in full-scale development.

Cost Factors for MVP Development

The cost of developing an MVP for an HMS typically falls in the range of $30,000 to $150,000. This estimate is based on:

  • Smaller development team
  • Fewer features and functionalities
  • Reduced design complexity
  • Limited integration with existing systems
  • Shorter development timeline

Full Product Development

Full product development involves building a comprehensive HMS with all the desired features, modules, and integrations to meet the needs of a healthcare organization. This approach is ideal for organizations with a clear understanding of their requirements and the resources to support a more extensive development effort.

Cost Factors for Full Product Development

For full product development of an HMS, the cost can range from $250,000 to over $1,000,000. This higher cost results from:

  • Larger development team with specialized skills
  • More extensive feature set and modules
  • Increased design complexity
  • Integration with existing systems and third-party services
  • Longer development timeline
  • Compliance with regulations (e.g., HIPAA) and security measures
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How to Create a Hospital Management System with Riseapps: Success Stories

As a full-cycle healthtech software development company, Riseapps is committed to creating successful, enduring, and profitable products for our clients. Our approach emphasizes captivating designs, robust tech stacks, and seamless code, all managed through the Scrum methodology for flexibility and transparency. 

Highlighted Project:


Viemed, a participating Medicare durable medical equipment supplier, provides post-acute respiratory care services in the United States through its indirect wholly-owned subsidiaries, Sleep Management and Home Sleep Delivered. 

The company offers effective home treatment options, featuring respiratory care practitioners who provide therapy and counseling using cutting-edge technology. Viemed has raised $37.5 million to date and recently announced its acquisition of Home Medical Products, a Tennessee-based provider of respiratory-focused home medical solutions.

Riseapps’ Contribution

Riseapps partnered with The VieMed to develop a multicomponent EHR and telemedicine platform for COPD patients. Our proposed solutions included:

Mobile-Based Telemedicine Proofs of Concept (POC)

These POCs showcased the potential for enhancing patient care through remote consultations and follow-ups, while also reducing healthcare costs and increasing accessibility.

Full-Service Patient-Facing Application for Respiratory Therapists

This facilitated seamless communication between patients and therapists, enabled remote monitoring of patients’ respiratory health, and provided valuable educational resources to promote self-care and adherence to treatment plans.

Multi-User Platforms for Patients, Caregivers, and Clinicians

The platforms offer a secure, integrated environment for seamless collaboration and communication among all stakeholders, ultimately leading to improved patient outcomes, enhanced treatment coordination, and streamlined healthcare delivery.

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What is Hospital Management Software?

Hospital management software manages daily responsibilities and centralizes data on patients’ financials, treatments, and more in a secure environment. The software also streamlines communication and cooperation among staff and the medical supply chain within a hospital. Additionally, it oversees billing, maintains inpatients’ contact information, and keeps insurance details for future needs.

What is the typical cost of HMS?

The average cost of hospital management software varies based on the client’s needs, the software’s architecture, and its included features. The timeline for delivering the software and the amount of research and collaboration that went into developing the HMS also impact the cost.

Should I choose a custom or off-the-shelf HMS?

Off-the-shelf HMS is popular due to its affordability and immediate availability. On the other hand, custom HMS provides tailored solutions, and customizations based on individual requirements. Investing in a custom HMS can also help avoid purchasing additional licenses.