Healthcare Software-as-a-Service (SaaS) refers to cloud-based applications that deliver secure, scalable, and continuously updated functionality for healthcare organizations – without the need to install or maintain onsite infrastructure. Instead of running locally on hospital servers, SaaS products are hosted in the cloud and accessed through the web, allowing providers and payers to deploy tools faster, reduce IT overhead, and stay compliant with ever-changing regulations.
By contrast, traditional, on-premise healthcare software required local hardware, manual updates, and dedicated IT staff.
That scalability, combined with faster iteration and lower maintenance costs, explains why SaaS has become the dominant delivery model across healthcare IT. The shift is about more than cost or convenience—it’s about creating adaptable, connected systems that can evolve with new regulations, payment models, and patient expectations.
We observe this shift across our work: from clinical decision support and specialty EMRs to population health and patient engagement platforms. The true value lies in creating connected, compliant ecosystems that enhance care delivery and user experience. At HTD, we see SaaS as more than just a deployment model – it’s the infrastructure that powers human-driven technologies: tools that improve how clinicians deliver care, how administrators manage operations, and how patients engage with their health.
This article explores where the healthcare SaaS market stands today, where it’s heading, and how HTD helps providers and payers choose tools that integrate systems, meet regulations, and foster lasting engagement.
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SaaS: The Fastest-Growing Model in Healthcare IT
Like we said, Software-as-a-Service (SaaS) is now the leading model in healthcare IT. Instead of maintaining complex local systems, organizations use secure cloud platforms that update automatically and scale on demand, transforming costly setups into flexible, collaborative solutions.
The business case is strong. According to Grand View Research, the global healthcare SaaS market was valued at around $25 billion in 2024 and is projected to reach roughly $75 billion by 2030, representing a compound annual growth rate of about 20%.
This shift has been accelerated by growing regulatory comfort with major cloud vendors. Most leading providers – like AWS and Google Cloud – now offer HIPAA-aligned security frameworks and HITRUST-certified environments, giving health systems confidence to store and process protected health information (PHI) off-premise. According to a DuploCloud report, “seven out of 10 IT professionals in the healthcare industry say their organizations have adopted cloud computing solutions” with the potential for that number to hit 90% adoption rate by this year.
Additional factors that are fueling the growth of Healthcare SaaS dominance:
- Cloud migration and cost optimization
- Demand for interoperability and data liquidity
- Post-pandemic telehealth normalization
- AI and automation use cases
- Evolving reimbursement and value-based care models
The core benefits of Healthcare SaaS
SaaS in healthcare delivers substantial advantages across four core areas: scalability, compliance, interoperability, and cost efficiency.
- Scalability: Auto-scaling cloud infrastructure enables health systems to expand quickly without major hardware investments. New clinics, users, or modules can be added instantly, supporting everything from onboarding remote care teams to deploying new features across hundreds of sites in days instead of months. For example, Athenahealth uses scalable microservices to support thousands of simultaneous users across its EHR and billing systems through athenaOne, its cloud-based platform. McKinsey estimates that cloud-based models can enhance IT efficiencies by 20-30%.
- Compliance and security: Leading SaaS vendors embed compliance frameworks into their architecture – offering HIPAA- and GDPR-aligned controls, SOC 2 certification, encryption at rest and in transit, and Business Associate Agreement (BAA) readiness. This “compliance by design” approach reduces the internal validation burden and helps organizations meet evolving regulatory expectations.
- Interoperability: Modern SaaS solutions are built for data exchange. Through FHIR and HL7 integration, platforms can securely share information between EMRs, payers, labs, and patient apps. For instance, NextGen Healthcare’s APIs enable bidirectional data flow that improves care coordination and reporting accuracy across networks.
- Lower Total Cost of Ownership (TCO): SaaS transforms large upfront capital expenditures (CapEx) into predictable operating expenses (OpEx). With vendor-managed hosting, updates, and maintenance, healthcare organizations can reduce IT overhead and reallocate resources toward patient-facing innovation. Another McKinsey finding showed that companies can see a 20% cost saving by adjusting cloud services to better fit their applications’ needs.
The eternal healthcare SaaS question: build vs. buy?
Every healthcare organization eventually faces a familiar question: should we build our software in-house or buy an existing SaaS solution? The answer depends on how you balance control, cost, speed, and long-term maintenance. Here are some of the factors you should consider:
- Speed: The first factor. Buying or licensing SaaS can deliver results in weeks instead of the year or more needed to build from scratch. Forrester Research notes that healthcare startups using pre-configured compliance environments can reach the market 40% faster. That speed is vital as regulations and reimbursement models evolve, with SaaS vendors handling updates and security automatically so teams can stay focused on growth.
- Maintenance: Vendor-managed SaaS dramatically reduces the IT burden. The provider maintains uptime, backups, and scalability, which means your team can focus on optimizing workflows or building integrations rather than maintaining infrastructure. In-house builds, by contrast, require dedicated resources for updates, monitoring, and disaster recovery.
- Customization: Building in-house gives full flexibility – you decide every field, feature, and data model. That level of control can be valuable for highly specialized workflows, but it comes with longer timelines and higher costs. Most modern SaaS products strike a balance: they’re standardized for reliability but offer configurable options so you can tailor permissions, workflows, and integrations without touching core code.
- Compliance: Healthcare regulations like HIPAA and GDPR require strict handling of protected health information (PHI). Established SaaS vendors typically embed compliance frameworks, audit logging, encryption, and role-based access control into their architecture. When you build internally, your team must design and validate every safeguard – an effort that adds months and significant cost to development.
A key strategic decision in healthcare SaaS implementation involves choosing which components to build in-house and which to adopt from existing digital health platforms. Many organizations use a hybrid model that combines configurable third-party tools with custom-built layers for integration, data privacy, or clinical workflows.
We explore this topic in more depth in our Build vs. Buy in Healthcare Software guide, which outlines how healthcare leaders can evaluate trade-offs, mitigate risks, and plan for scalability.
Use cases and development models in healthcare SaaS
Healthcare SaaS now underpins nearly every layer of care delivery—from clinical decision-making to patient engagement and administrative operations. The most effective solutions combine deep healthcare expertise with strong engineering partnerships to deliver secure, compliant, and scalable products faster. Below are four core categories shaping today’s healthcare SaaS landscape.
Clinical and provider-facing platforms
Cloud-based EHRs and EMRs remain at the core of modern healthcare delivery.
- Athenahealth combines clinical documentation, revenue cycle management, and patient engagement capabilities in one platform, helping providers coordinate care and manage operations more efficiently.
- PointClickCare connects more than 27,000 long-term and post-acute care facilities across North America, integrating hospitals, skilled nursing, and home-health agencies through a single cloud platform.
These systems are rapidly evolving beyond recordkeeping toward predictive analytics, interoperability, and device integration. Providers now expect EHRs that surface clinical insights in real time and integrate seamlessly with connected wearables or remote monitoring tools to support proactive, data-driven care.
Administrative and operational systems
On the administrative side, SaaS platforms streamline billing, scheduling, and compliance management—areas historically burdened by manual workflows.
- eClinicalWorks is a leader in practice management and revenue-cycle solutions, uses AI-driven claims scrubbing, denial management dashboards, and patient-payment automation to reduce administrative overhead and accelerate cash flow.
- AdvancedMD offers an integrated suite for practice management, patient scheduling, and telehealth, allowing providers to coordinate staff, resources, and appointments across multiple locations without relying on manual spreadsheets or phone calls.
Across the industry, automation and AI-assisted billing are helping healthcare organizations cut operational costs, reduce denials, and redeploy staff toward higher-value work. Notably, given the increasing prevalence of cybersecurity threats, studies have demonstrated that automated fraud detection methods could potentially save billions in healthcare costs and enhance the overall quality of patient care.
Patient and member engagement platforms
On the patient-facing side, SaaS platforms are transforming how patients interact with their care teams.
- MyChart allows patients to schedule appointments, request refills, view test results, and message clinicians directly through a secure portal—reducing wait times and improving continuity of care.
- Zocdoc connects patients with in-network providers across specialties, offering real-time booking and automatic calendar synchronization to minimize no-shows and fill open appointments.
The next wave of these tools focuses on omnichannel engagement—integrating mobile, web, and in-clinic touchpoints—and delivering personalized digital experiences tailored to each patient’s preferences, coverage, and care plan.
Payer and interoperability systems
Payer-focused SaaS platforms enable secure, compliant data exchange at scale, supporting claims, billing, prior authorization, and risk adjustment.
- Episource millions of member records for health plans through its cloud-based analytics and risk-adjustment infrastructure. The company’s 2025 breach, affecting roughly 5.4 million individuals, underscored how critical secure, well-maintained partnerships are for protecting data integrity
- Availity provides a multi-payer network that simplifies eligibility, claims, and remittance transactions, allowing providers and payers to exchange data through a unified, HIPAA-compliant platform.
As payers adopt FHIR-based APIs and expand their interoperability mandates, secure and compliant data sharing has become a cornerstone of scalable, value-based care models.
All these examples illustrate how SaaS use cases and outsourcing trends overlap. Healthcare organizations rely on external engineering expertise not just for cost savings, but to deliver systems that are compliant, interoperable, and scalable, qualities that have become table stakes for any modern healthcare product.
Key challenges and risks in Healthcare SaaS
While SaaS has transformed how healthcare organizations deliver, manage, and pay for care, it also introduces critical challenges that require continuous oversight and strong governance. The most pressing risks fall into three categories: data security and privacy, regulatory complexity, and interoperability barriers.
1. Data security and privacy
Data breaches remains top concern. According to The HIPAA Journal, there have been an average of 727 data breaches reported per year between 2021 and 2024. Last year alone, records for 82% of the U.S. population were exposed, stolen, or impermissibly disclosed. The 2024 Change Healthcare ransomware attack showed just how far-reaching one incident can be: roughly 190 million people were affected and total costs exceeded $2.4 billion by October 2024. The breach reportedly stemmed from an application lacking multi-factor authentication, underscoring how basic lapses can cascade across the system.
2. Regulatory complexity
Healthcare SaaS vendors must comply with a web of overlapping regulations including HIPAA, GDPR, and, for certain clinical applications, FDA Software as a Medical Device (SaMD) requirements. Unlike general enterprise SaaS, healthcare software must embed compliance into its architecture–through encryption, audit trails, traceability, and role-based access controls–while maintaining agility to adapt as privacy laws and cybersecurity guidance evolve across markets.
3. Interoperability barriers
Even as FHIR adoption expands, integration remains one of healthcare’s hardest problems. Many hospitals still rely on legacy EHRs, custom APIs, or outdated interfaces, leading to inconsistent implementations and fragmented data exchange. These gaps slow down deployments and create friction between systems that should otherwise communicate seamlessly. To overcome these issues, many organizations are investing in integration middleware such as Redox or Health Gorilla, which help bridge disparate systems, normalize data, and simplify FHIR-based exchange across providers, payers, and patient-facing platforms.
Organizations can address these challenges through proactive governance and technical safeguards, including:
- Continuous compliance pipelines that automatically verify regulatory adherence throughout development and deployment.
- Regular vendor risk assessments to ensure cloud partners maintain SOC 2, HITRUST, and HIPAA certifications.
- Integration middleware and API gateways (i.e., the Redox and Health Gorillas of the Healthcare SaaS world) to improve interoperability while maintaining security and auditability.
Looking ahead, what market trends are shaping healthcare SaaS?
Healthcare SaaS is evolving from workflow digitization toward intelligent, connected, and secure ecosystems that underpin modern care delivery. As regulatory frameworks mature and data-driven decision-making becomes standard, understanding where the market is heading is essential for product and technology leaders.
Our latest eBook examines six macro trends transforming the healthcare SaaS market through 2030, including AI, hybrid care, FHIR adoption, and data security. Each section draws on recent research and industry benchmarks to highlight where investment and innovation are heading.
Aug 01, 2024
Tech