Healthcare App Cost Drivers in 2023

This article has been updated for 2023.

If you’re a healthcare provider or startup looking to build your own app, one of your biggest questions is likely the cost involved. 

It’s not an easy question to answer.  

With a few minutes of internet research, you’ll find several wildly varying estimates. Some articles estimate the cost to be $20,000-$30,000, while others put the cost at $700,000 or more.  

Why the huge range? For one thing, it depends on the app you want to build. 

Determining healthcare app cost depends on three main factors: app complexity, regulatory compliance, and who builds the app. 

Let’s break down these three cost drivers to see what you can do to keep down the cost of developing a health app in 2023. 

Healthcare App Complexity 

The relationship between app complexity and cost is straightforward; the more complex your app is, the more it will cost to build it. 

So let’s define what “complex” means in a healthcare app context. Your app’s level of complexity probably falls into one of the following categories. 

• Simple: An app for one or two platforms (i.e., desktop or mobile, web app or mobile app) with a simple design, custom UI features, and API integration. An example might be a custom mobile app checking an urgent care provider’s current wait time. 
• Somewhat Complex: A professionally designed app developed for two or more platforms, with front-end and back-end features, security features for patient data, or multiple APIs. A web or mobile app that allows patients to access their medical records could be somewhat complex.  
• Very Complex: A fully custom health app for multiple platforms, involving professional front-end design, heavy back-end features, and several integrations. Telehealth applications and electronic health record (EHR) systems are examples of very complex apps. 

App complexity is a balancing act. On one side, you want your app to be secure, stable, and meet your every need. On the other, you want to keep costs down. 

Every feature increases your app’s complexity, and therefore, the amount of development time.  

To keep costs down, make a prioritized list of every feature you want in your health app. Then, divide them into “must have” and “nice to have” features. 

As you start getting estimates for app development, have them price your “must have” list first. If your “must have” list exceeds your budget, you’ll have to make some difficult calls.  

If they don’t, you may be able to add a few of your “nice to have” features. 

Regulatory Compliance  

Software created for use in healthcare settings in the United States must be HIPAA-compliant. HIPAA’s regulations apply to all components of your healthcare application: the UI/UX and front-end technologies, the servers and databases on the back-end, and any middleware, infrastructure, and data transport mechanisms.  

To achieve HIPAA compliance, your healthcare app must meet basic measures for data security, accessibility, and so on. Your app may need to follow additional guidelines, depending on the app’s function.  

When you look at just the HIPAA guidelines that govern digital solutions, you can see why they increase the cost of building a healthcare app. Here are the four key areas that deal with securing digital healthcare products: 

1. HIPAA’s Privacy Rule  

HIPAA’s Privacy Rule defines the standards a software application must adhere to for dealing with electronic Protected Health Information (ePHI). The standards cover appropriate safeguards for ePHI, limits and conditions for the use of the data, and patients’ rights to access and view their ePHI. 

2. HIPAA’s Security Rule 

The Security Rule establishes standards for administrative, technical, and physical safeguards. 

Administrative Safeguards: These safeguards cover security management practices (i.e., risk analysis and risk management), assigned security responsibilities, workforce security, security awareness and training, and information access control. 

Technical Safeguards: HIPAA’s technical safeguards establish the criteria for security access control, audit controls, data integrity, entity authorization, and transmission security. 

Physical Safeguards: The physical safeguards cover facility access control, workstation use, workstation security, and device and media controls. 

3. HIPAA’s Enforcement Rule  

The Enforcement Rule outlines what you must do to comply with investigations into breaches or other issues regarding enforcement of HIPAA standards. 

4. The Breach Notification Rule 

Finally, HIPAA’s Breach Notification Rule defines the measures you need to take when your healthcare app suffers a breach from hackers, malware, ransomware, and other cyber threats.  

Reducing Compliance Costs 

The more compliance measures your app needs, the greater the development effort and the higher the cost to build a healthcare app. Every added layer of security will also add to the price tag. 

To reduce compliance costs on the back-end, use a cloud service provider with built-in HIPAA compliance. Amazon AWS, Google, Microsoft, Rackspace, and other major providers are already HIPAA-compliant because they want to attract businesses like yours. 

Likewise, you have your choice of HIPAA-compliant application hosting platforms. Going this route improves your app’s cybersecurity levels and saves you the cost of building these safeguards.  

A word of warning, though: Don’t skimp on security measures.  

Cyber threats and data breaches have been occurring in the healthcare industry for years, but they have risen dramatically since the start of the COVID-19 pandemic. The first year of the pandemic saw a 25% increase in these breaches, while 2021 broke all previous records. 

Most startups can’t weather the financial damage from a breach. In 2021, the average total cost of a data breach was $4.24 million. For that kind of money, you’re better off investing in strong security at the outset. 

Your Healthcare App Development Team 

In addition to app complexity and compliance measures, the team that builds your healthcare app is also a significant cost driver. 

Your choice to hire an in-house development team, use a freelancer, or partner with a healthcare app development company will influence the overall project cost.  

Hiring an in-house team is usually the most expensive option and the slowest. You’re paying full salaries and providing benefits for several software professionals. The current hiring landscape has those developers in high demand, so you’ll have to offer high salaries to attract even middle-tier talent. And once you have them on board, it’ll take them months to get up to speed. 

You may be able to hire freelance developers on a contract basis, but they’re in demand, too. And the temporary nature of freelancing drives their hourly costs higher. Once again, you may not get the best talent for your buck, and you’ll have a similar ramp-up curve delaying the project. 

Healthcare app development companies also differ in cost and quality. And the two things don’t equate. Just because a developer charges high fees doesn’t mean their work is high quality. As in real estate, the difference in cost is often location, location, location.  

You can often get equal or better app quality from an off-shore or near-shore software development partner than you will from a US-based company. And off-shore partners charge a fraction of even a low-tier domestic developer’s rates. 

Companies specializing in healthcare app development often have the knowledge and technological experience they need to build a high-quality application. Because they’ve done it before, they know the pitfalls to avoid and the compliance measures to address. 

You’ll also see your project completed faster. Development companies have ready-made teams that are used to working together and have a proven methodology. There’s no learning curve.  

Conclusion 

To lower your software development costs in 2023, keep app complexity, regulatory compliance, and your development team in mind. 

These three cost drivers alone can significantly influence the funding you’ll need to get your healthcare app to market.