How Much Does Custom Healthcare Software Cost?

If you’re considering custom healthcare software, cost is probably your first question.

While you can expect to pay several thousand dollars for software development, the value to your healthcare business may be even higher.

Custom healthcare software can fill a niche need for your medical practice or business—a need for which there is no commercial, off-the-shelf solution.

Take, for example, the orthopedic rehabilitation business that wanted an easier and more modern way to measure and improve patients’ physical performance.

They envisioned a software application that would capture and analyze a patient’s physical and psychological performance based on values input into a computer-based simulation system.

The software would assess a patient’s improvement based on their response time, increase in pace, stamina, jump height, cardiovascular efficiency, distance, and caloric expenditure.

Such a solution would not have broad commercial appeal, so there was no existing product for the practice to purchase. Therefore, they hired a software development company to build a custom healthcare solution.

And they aren’t the only practice having custom solutions built.

More healthcare practitioners have recognized the benefits of custom software or custom integrations of their existing medical software.

Like tailored clothing, bespoke medical software offers greater customization, a better user experience, and increased flexibility.

What prevents many providers from exploring custom software, however, is the cost.

Let’s look at what goes into determining the cost of custom healthcare software and some ways to keep costs down.

Custom Healthcare Software Cost Drivers

The cost of developing custom healthcare software depends on many variables, such as:

• How complex the solution is
• The kind of software do you want to build
• The compliance measures required
• Who builds the solution

We previously did a deep dive into custom healthcare software cost drivers, but here’s a quick reminder.

1. Complexity

Development costs rise according to how complex your custom software needs to be. Every feature increases your app’s complexity, driving up development time and, along with it, the cost of your software.

Before talking to custom software development companies, make a prioritized list of every feature you want in your software. Then, divide that list into “must have” and “nice to have” features.

2. Type of Software

The type of software you want to have built may also influence the price. Artificial intelligence and machine learning solutions require high-demand skillsets.

Likewise, it may double your costs if you want a solution with both web and mobile applications. Mobile development means building Android and iOS apps or a hybrid solution that works on both. Again, these require specific skill sets.

3. Regulatory Compliance

Software created for use in healthcare settings in the United States must be HIPAA-compliant. To achieve HIPAA compliance, your custom healthcare software must meet basic measures for data security, accessibility, and so on.

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

4. Development Team

The team that builds your custom healthcare software can also affect the cost.

The most expensive option is hiring an in-house development team. Unless you anticipate ongoing development (customizing it for each client, for example), hiring everyone you need for software development usually isn’t cost-effective.

A freelance developer may be cheaper, but unless they have all the expertise needed, you might be sacrificing quality. You also aren’t likely to get much support once the software is complete; freelancers live project to project and can’t afford to perform maintenance or act as a help desk.

A custom healthcare software development company can often be cheaper than an in-house team, yet have all the expertise at hand. These companies also provide support and maintenance after release. 

Reducing Custom Healthcare Software Cost

Even though it’s difficult to estimate the cost of custom healthcare software development, there are ways you can reduce the cost.

1. Cut Your Budget in Half

Once you’ve established your budget for the project, set half of it aside for initial development costs. This prevents you from running out of money when you need to make changes late in the development cycle. The further along you are in development, the more expensive it is to make changes.

Setting half your budget aside also helps you cover the software maintenance and support costs. Some software maintenance, such as bug fixes, should be included in the initial estimate. Others, like integration issues, may not be covered.

2. Utilize Iterative Development

In iterative development, software engineers design, develop, and test your custom application in short, repetitive cycles, or “sprints,” usually lasting two weeks. With each sprint, they add more features until you finally have a full-featured software application.

Iterative development usually begins with the development of a minimum viable product (MVP). An MVP is a version of your software with just enough features to be released. It may not have all the bells and whistles, but the core functionality works.

Creating an MVP helps you clarify your vision, focus on the product’s most essential features, and better understand your users’ needs. An MVP lets you get feedback from early users.

Once you finalize the MVP, you can focus on building the “nice to have” features in subsequent sprints.

3. Avoid Scope Creep

Your project scope is the list of requirements and features you want in your software product. You usually define the project’s scope in the initial stage of development and capture it in your project plan.

Scope creep happens when work outside the project scope is requested after kickoff. A little scope creep is expected, but excessive creep can derail your project and eat up your budget.

Iterative development helps combat scope creep because you regularly evaluate and review development work. Short pilot projects can help avoid budget overruns and scope creep in larger products.

Generally speaking, however, the best way to avoid scope creep is to save all new requirements or modifications of existing requirements for the next development cycle. This keeps costs down and prevents you from burning through your funding too quickly.

4. Utilize the Cloud

Cloud computing helps keep development costs down, as well. The major cloud providers offer strong data security measures and comply with healthcare-specific data privacy and safety regulations (i.e., HIPAA). That means you don’t have to spend as many development hours on those critical measures when building your application.

Another way cloud computing reduces costs is by eliminating the setup costs associated with in-house servers. Cloud-based servers are already set up, so the only cost is for the storage you use.

Finally, cloud computing is easier to scale than an in-house data architecture. This optimizes resource utilization and reduces effort, saving more of your budget.

5. Hire an Experienced Development Team

Experience is critical whether you hire an internal team of developers or outsource the development to a custom healthcare software development company.

The healthcare industry has unique regulations surrounding the security of, and access to, private health data. There are also specific integrations you may need to include in your software.

For example, a backend developer from the manufacturing industry may not know the intricacies required for healthcare software, which can slow development and increase costs.

Software engineers with experience developing healthcare solutions not only know what needs to be built into your application, but they have built similar features in the past. They can leverage their experience to develop your application faster, thus lowering costs.

Where to Start

If you’ve googled the cost of custom software development for healthcare or medical uses, you probably found estimates ranging from $20,000 to $700,000 or more. The most common range quoted is $50,000 to $250,000, but that’s still a wide gap. 

To accurately evaluate how much your custom healthcare software will cost, get an estimate from a software development company that has developed healthcare and medical software.

Even if you want to hire an internal team to develop your application, consulting with a company that’s built similar software can give you a better idea of the resources you’ll need.

You may even find it faster and more cost-effective to outsource the work.