Healthcare App Development Cost: Full Guide for Startups

Konstantin Kalinin

Head of Content

April 5, 2023

The app development cost of every project (whether a healthcare app or not) comes down to three essential components: effort, hourly rate, and time frame.

• Effort — How many resources counted in man-hours will it take to deliver a project?
• Hourly rate — What’s the price of a man-hour?
• Time frame — What’s the deadline for delivering the project?

And so, the formula for the health app development cost is far from being obscure:

Hours (effort) X Hourly Rate (dollars) = Cost of App Development

However, intricacies quickly pile up when determining the required effort, especially for projects with tight deadlines. On top of that, agencies may have different rates for various app development disciplines, such as design, code, and QA, among others.

Now throw in HIPAA compliance and other pitfalls typical of healthcare app development.

How does a business owner make sense of all that? How do they know they are not comparing apples to oranges when looking at quotes and estimates from different companies? How do they ensure every dollar goes towards greater traction and adoption of their products?

Let’s discuss and find answers to these and many other questions so that your app cost negotiations become more effective. I promise, “How much does it cost to make a medical app?” won’t sound this challenging anymore.

Top Takeaways:

• The average mhealth app costs $425K until launch. Almost half the total development costs are outsourced to development agencies or freelancers, translating to $200,000.
• For projects that last longer than 3 months, it’s best to choose the time-and-materials approach characteristic of agile development. The main benefit of following agile best practices is a flexible design and development process, which leads to finding an optimal product-market fit faster.
• Topflight’s Vision-to-Traction System takes the best from fixed-price and time-and-materials approaches by guaranteeing satisfactory end results while taking advantage of agile’s flexible development process.

Table of Contents:

1. Common Approaches to Estimating App Development
2. Revolutionary System for Defining App Development Cost
3. Choosing the Right Healthcare App Development Partner
4. What Goes into Health App Development Cost
5. How to Keep the Cost of Healthcare App Development under Control
6. Typical Mistakes when Estimating App Development Costs
7. How Vision-to-Traction System Affects Development Costs

Common Approaches to Estimating App Development

How do you arrive at an app development cost? You ask a few developers or agencies and compare the quotes, right? These quotes usually come in the form of:

• fixed-price proposals
• time and materials proposals

What are their pros and cons?

Fixed-price

Historically, fixed-price was the most widespread approach in software development. Companies would agree on strict requirements, set a deadline, and agree on the price. Once a contract was signed, there was no coming back without a lengthy give-and-take and additional agreements.

Fixed-price pros:

• hard-defined price for a project
• strict milestones and deadlines for delivery
• min communication efforts
• predictable outcomes

Fixed-price cons:

• hard to change the scope
• no guaranteed product-market fit
• no on-the-go upgrades or improvements
• maintenance becomes a drawn-out process

As you can see, the fixed-price approach fits only specific app development projects. Here are a few signs that call for a fixed-price estimate:

• short projects under 2-3 months
• clearly defined requirements
• ready UX/UI designs
• no ongoing communication

Time and materials

However, fixed price is hardly a viable option in the competitive landscape of healthcare applications. So, it’s no wonder that agile software development focusing on product-market fit and leveraging the time-and-materials approach reins the field today.

Time & materials pros:

• flexible scope, in tune with changing market conditions
• faster delivery (of a proof of concept, MVP, and further iterations)
• product-market fit discovered faster
• quicker updates and seamless maintenance overall

Time & materials cons: 

• app development cost follows scope creep
• substantial communication efforts
• delivery milestones may shift

One thing to note about time and materials is that agencies still have to supply an estimate with a range of min and max costs. Owners need to understand the hard budget cap of a project before signing a time and materials contract.

Founders would expect to see a spreadsheet with hours assigned to tasks and broken down by different app development disciplines, often reflecting a specific team’s experience. Obviously, different agencies calculate such percentage formula-driven estimates differently based on their expertise in the field. Moreso,  estimates for two separate projects may rely on different formulas.

Despite all the advantages, the biggest hurdle with time-and-material-based app costs for business owners is the unpredictability of results.

If you engage a professional team, they will likely navigate toward an optimal product-market fit within your budgetary limitations. However, many developers choose to navigate endlessly till the budget is gone.

That’s why at Topflight, we came up with a…

Revolutionary System for Defining App Development Cost

Our Vision-to-Traction System (VTS) allows you to collaborate with a tech partner who sticks with you throughout the entire process and guarantees your satisfaction. That’s a striking difference from a myriad of development shops that focus solely on the billable hour and don’t guarantee the result.

Our no-questions money-back guarantee is the first of its kind on the software development market. The MBG backs our price because we lose money if you are unsatisfied with the results. Compare that to any billable-hour deal that is out there.

Another key differentiator is how each of the five steps in the VTS provides visible results that will impress all your stakeholders. The activities we conduct at each step are based on a systematic playbook that has allowed the Topflight team to achieve consistently outstanding product outcomes for our partners:

• $200 million raised
• 50 million users reached
• Multiple acquisitions

In short, Vision-to-Traction System allows you to hire a team of app development professionals who act like a super-qualified, well-organized, and coordinated team. And you don’t even have to micromanage or shuffle their full-time/part-time load: a project’s needs define that.

In terms of healthcare app development price, the VTS is very transparent:

As you can see, the VTS combines the best of fixed-price (guaranteed results) and time and materials (high flexibility). And best of all, the system has shown excellent outcomes for the healthcare industry, fintech, and other verticals.

Choosing the Right Healthcare App Development Partner

It goes without saying that choosing the right technical partner plays a huge role in figuring out the cost to build a healthcare app. Two major factors come into play at this stage: location and type of partner.

Location

As you probably know, hiring an overseas team will lower the cost of healthcare app development. The typical range is between $30,000 and $120,000 based on the level of expertise and familiarity with HIPAA compliance and other specifics of medical apps.

However, be ready to micromanage and save a separate budget for thorough testing. The few times we dealt with the results of such teams’ work, the cost to remedy a product at least doubled from what the company had already spent to get a half-baked product.

A few other times, we let it go because the whole thing had to be rewritten from scratch.

So, the pros and cons of working with overseas developers include:

• highly volatile end results
• necessity to micromanage
• seemingly inexpensive
• language and cultural barriers

That’s not to say you’re completely safe working with US-based developers, as performance varies a lot here too. But you won’t run into cultural differences, and if you’re lucky enough, the team will have the right tech knack you need to build a decent health app.

Types of development partners

Regardless of their location, the typical list of partners you get to choose from includes the following:

• software development agencies

Sometimes they take on fancy names like digital product studios or digital agencies. But the bottom line is that these companies offer full-stack development and design services. Hence, they can take you from vision to a ready digital health application while completing all app development tasks with their resources.

Cost effects: usually, the cost to make a healthcare app with an agency is on the higher end.

• freelancers

Freelancers are an acceptable option as long as you agree to micromanage and have enough bandwidth to juggle a hundred balls in the air at the same time. My experience shows that founders end up hiring a dedicated project manager in-house to keep the ball rolling without losing efficiency. Even with that, we’ve had clients come up to us to finish an incomplete app, because they got bailed on by a freelancer mid-development. 

Cost effects: cheaper compared to software development companies.

• hiring an in-house team

Hiring an in-house team can be prohibitively expensive compared to working with a software development shop or freelancers. Few companies, let alone startups, can afford a 7-figure payroll to hire a product team, developers, designers, QA and DevOps engineers, etc.

Cost effects: devastating unless you’re fully funded for 2 or so years to carry on.

What Goes into Health App Development Cost

Of course, besides a team’s experience and location, many other factors determine the cost to build a mobile app for healthcare, or any type of healthcare software, for that matter.

Scope of work

Regardless of who is working on a health app development project, when defining the cost of designing a healthcare app, we always face the challenge of accurately estimating product features.

Along with notifications, user profiles, dashboards, and other options, we also need to account for the following:

• back end, aka server infrastructure
• cloud hosting
• use of advanced technologies like blockchain, machine learning, IoT, or AR/VR
• integrations with third-party solutions (e.g., EHRs) and/or legacy systems
• integrations with phone sensors like GPS, gyroscope, NFC, etc.
• supported platforms, devices, and browsers
• SaaS and SDK fees

Naturally, the more outlined points apply to our project, the higher its cost. Only back-end development (database, authentication services, APIs, etc.) and cloud hosting are the prerequisites of any web or mobile healthcare application.

Every healthcare app needs a simple back end and hosting, even if only to authenticate providers and patients. You can’t develop a healthcare app without a cloud database, etc.

Otherwise, adding or subtracting different options and integrations from the list drives the price of healthcare app development up or down accordingly.

HIPAA compliance

It’s hard to put a price tag on applying security best practices, but HIPAA-driven development efforts compel healthcare providers to pay a higher price to make healthcare apps.

Healthcare app developers follow specific protocols and make use of various technologies, like data encryption, secure connections, and multifactor authentication, to secure PHI.

If, by chance, your health app doesn’t contain PHI, then HIPAA compliance won’t affect the overall price of designing a healthcare app. Otherwise, it would be best if you accounted for estimating HIPAA-related effort when calculating the costs of the application.

Types of healthcare apps

I noticed a few blogs handing out approximate estimates based on the type of healthcare project. For example, a remote patient monitoring app may cost X, and a patient portal – Y.

These estimates are bogus and as good as nothing. You already know that, e.g., the patient mobile app cost developed in different shops may vary significantly. Then, what is an abstract patient app? Each healthcare application is individual, so assigning price tags based on the application type is ridiculous.

At the same time, based on Topflight’s experience, you can safely assume that a well-rounded health app starts at around $150,000 — $180,000. By the way, that’s more or less congruent with the average medical app development cost published by Research2Guidance in 2018.

Here’s how they answer, “How much does it cost to develop medical software?”

Their mHealth Economics report states that the average mhealth app costs $425K until launch, with almost half the total development costs being outsourced to development agencies or freelancers, translating to costs of $200,000.

Stage of a product life cycle

Based on a product’s stage of development, its cost will vary between $40,000 and $200,000+

Proof of concept: $60,000 — $80,000. Wow investors, get another round of funding.

MVP: $80,000 — $150,000. Start generating traction.

Product: $200,000+. Continue refining toward a perfect product-market fit.

Of course, a proof of concept or an MVP isn’t the same as a fully market-ready product. However, they serve their purpose, and if you endure until a public release, start paying for themselves.

One of our partners landed a $300k ARR SaaS customer, turning ROI positive within a few months after publicly releasing their healthcare platform.

How to Keep the Cost of Healthcare App Development under Control

Business owners always look for ways to optimize their costs, including the price to build a mobile app for healthcare. What options are at your disposal?

Cross-platform development tools

Frameworks like React Native and Flutter help founders save up to x1.5 of their budget by using a unified code base for iOS and Android. In addition, source code can be repurposed when creating a web application with the same features as the original cross-platform mobile app.

Off-the-shelf SDKs and code libraries

We’ve been hammering this trend ad nauseam in our blogs: no need to reinvent the wheel and build typical features from scratch. Plenty of readily available solutions are available: take them and customize them to your needs. That applies to standard and advanced options like AI image recognition or speech-to-text.

White-label and no-code solution

Speaking of ready-made components, buying a white-label product and applying your branding and minimal customizations is another viable route. You can then integrate such white-label products into your overall digital ecosystem, e.g., by syncing them with a practice management platform. For example, a clinic with 100,000 active monthly users can jump-start a telehealth service for under $10,000 with Topflight’s No-Code Telehealth Components.

Rapid prototyping

Prototyping is required for all custom health apps we develop because it helps us validate a business idea without expensive coding. Prototypes help us test UX/UI assumptions and make necessary edits during the design phase. The same changes done in code require considerable (and not always justified) investment.

Involvement in the development process from the start

The worst thing you can do is to hire a competent team and let them loose. They’re qualified and understand your product vision — what can go wrong? In short, a lot. You must provide critical feedback from day one and keep in touch with the development team throughout the entire process. Or you can hire a dedicated project manager on your side.

At the same time, as long as the team follows your vision, there’s no need to micromanage as that will likely cause unnecessary interference in the creative process and result in delays. If you’ve found a partner you trust, just ensure they keep you updated.

Thorough testing

QA is the responsibility of the development partner. However, nothing stops you from verifying everything on your end. It’s much easier to catch bugs early, and it won’t cost a fortune to fix them, whereas when bug fixing happens only before the release — it may be costly. Also, ensure developers run retrospective tests to prevent previously discovered bugs from resurfacing.

Multidisciplinary team

By working with a full-stack team with in-house talent in design, development, QA, and other disciplines, you ensure the fluidity of the development process. There’s definitely less back-and-forth, which helps to keep the cost of medical app development under control.

DevOps best practices

Without a proper DevOps practice, developers have to spend extra time every time they need to ship a new build of an application. That time should be spent on actual feature coding while automated DevOps systems take care of testing and compiling new app versions.

Cost optimization during maintenance

Finally, we can lower the cost during a maintenance cycle by integrating automated platforms for monitoring issues, collecting user feedback, and tracking user engagement.

Typical Mistakes when Estimating App Development Costs

When miscalculated, the cost to develop a medical app may lead to lost opportunities, delayed products, and overspending. Let’s review the typical mistakes you must avoid when building a healthcare app.

Overlooked integration costs

Some companies miss to include integration costs or calculate them incorrectly. If your developers provide estimates for some third-party integrations without reviewing corresponding APIs, be ready for surprises. Please take these integration costs if your health app requires integration with electronic health records.

Misfit technology stack

Use an inappropriate tech stack, and you can easily find yourself in a situation where your health app can’t scale anymore. This includes both cloud and mobile technologies. The team should pick sustainable technologies from the get-go.

Sticking to a fixed price

The fixed-price approach is too languid for pivoting on the go: adjusting to the market takes too long before it’s reflected in the price. So opting for a fixed-price cost while making a healthcare app that still needs to prove its product-market fit and takes longer than 3 months to create is not the best choice.

Choose custom over low-code and no-code for a PoC or MVP

Not every healthcare app needs to be developed from scratch. Many off-the-shelf software products can perfectly fit your workflows. And even with some customization, you’ll practically always end up spending less.

Hiring inexperienced developers

We all have to make compromises sometimes. However, if a compromise will cost you to rebuild everything from scratch, it’s better to think twice.

No requirements

Some companies insist on a time-and-materials approach and start creating health apps without any requirements. Agile is perfect for pivoting; what’s there to worry about? 

Well, even with the flexible nature of agile, you need requirements. Otherwise, you will quickly lose track of features that push your product forward and those that can be postponed. Besides, there’s no guarantee that an agency aligns with your product vision if it’s not formalized.

More developers are always good

Founders may hire more developers to make haste, and this sometimes works as intended. Of course, the cost of developing a healthcare mobile app goes up in this case. However, remember that you can’t always fasten a product’s time to market by assigning more resources.

Unless you’re TelaDoc, more than two developers on a mobile app is overkill. You can only justify that when coders work on standalone pieces of software. For example, one figures out an IoT, AR, or AI piece, and the other is responsible for the whole app.

Who’s the decision maker?

No alignment between roles or team members with obscure roles can hurt the project cost. There must be one person on your side making final calls.

Missed expenses

To answer, “What is the cost to develop a medical mobile app?” you must also keep in mind marketing, hosting, and project management costs.

Proper agile tools

At Topflight, we use ClickUp for easy project tracking and Slack, email, and Google Meet to update you on the progress. There are a few other tools, but we expose you to these sparingly. You already have enough on your plate, so we need to maintain a healthy diet with the tools when developing a healthcare app.

How Vision-to-Traction System Affects Development Costs

Imagine hiring a full-stack team with talent in all health app development-related disciplines: from HIPAA compliance and coding to design, QA, and DevOps. Now imagine you don’t need to worry about a full-time load; each team member comes just in time to move the project forward.

And you have full transparency over who is doing what. Plus, the team has a vested interest in your product.

If you dig a little deeper, you’ll discover that the VTS consists of 5 steps:

• Step 1: Confirm Product Vision 
• Step 2: Demonstrate the Value Proposition 
• Step 3: Build and Refine 
• Step 4: Product Launch 
• Step 5: Deliver Traction

Each of these steps focuses on the main activities, goals, unique deliverables, and processes that spur the creation of genuine digital products.

Get in touch today to learn more about the system and see if it answers “How much does it cost to develop a healthcare mobile app?” for you.