Healthcare software development has gone mainstream. Hospitals and healthcare organizations are increasingly investing in custom software development to take their practice to new heights, furnish a better patient experience and streamline care delivery.
The global healthcare software market was valued at $74.2 Billion in 2020 and is expected to grow at a CAGR of 10.7 percent during the forecast period of 2021-28.
If you are looking into getting custom healthcare software developed, the time for it is now. However, before you begin with your project, estimating the overall cost of healthcare software development is crucial before undertaking the actual project development. Estimating the approximate cost of development will naturally depend on the project specifications.
Depending on the type of project and its complexity, developing the first iteration of your healthcare software project may cost anywhere from $50,000 to $150,000 depending mainly on the scope of work.
But why such a huge variation?
This is because estimation of the actual costs depends on a number of factors. Let’s take a deep dive into the underlying factors that can have an impact on the healthcare software development costs.
Factors affecting the cost of a healthcare software development project
1. In-house and outsourced project
Healthcare organizations that are looking into getting custom software developed have two options. They can either hire an in-house software development team or outsource the project to a software development company. Both these options come with their own set of pros and cons.
Hiring an in-house team is both time and resource intensive activity. While it does offer greater control over the development process, it also requires considerable technical expertise to pull it through.
Outsourcing software development to a company that specializes in healthcare software development is a better option if you want to keep the development costs in check.
Not only does it save you from the hassle of vetting and hiring a team in-house, the team is already well versed in the regulatory and compliance requirements development entails, thus preventing costly mistakes later on in the development cycle.
The software development costs also vary based on the geographical location. You can keep the costs in check without compromising on the development quality if you choose an offshore development team. Since the average salaries are lower, you get the most value for your money.
2. Timeline of development
A basic software that has a simple feature set and design, does not include third party integration and does not involve processing of third party data can get developed in just a couple of months time.
The software development costs in such a case would naturally be low as compared to the costs involved in developing a feature-rich complex software.
Healthcare software generally falls in the latter category with the patient data needing to be encrypted and often requiring multiple third party integrations. Complex healthcare software can take upwards of 6 months for project planning, development and deployment, adding to the software development costs.
2. Team size
The skill set and experience of the team that is working on your project will have a huge impact on the overall costs of healthcare software development. Having a larger team with experienced developers will likely shorten the timeline of development.
Under-staffing the project may actually be counterproductive and end up costing more in the long run. It hampers productivity, results in more errors during the development process which causes extension of the deadlines and failures.
While having a larger team might seem costly initially, in the long run it has considerable benefits for your project. Outsourcing software development also has proven benefits here since it gives you the flexibility over team size depending on the project needs.
A team that has just been put together has a learning curve when it comes to working collaboratively. Having a preexisting team who has worked together on numerous projects can collaborate more effectively and deliver better results.
3. Scope of the project
While the team size and project timeline can be charted in advance, the project scope remains variable. Based on the feedback from the stakeholders, you may decide to remove some features that you may deem unnecessary.
Conversely, you may also decide that the software needs some additional features to be incorporated into it which may increase the associated development costs.
The biggest drawback of following the traditional waterfall model for software development is that any changes in the scope of the project can only be implemented once the software development is complete. At this stage, adding any new feature can add up to the costs.
Following Agile methodology on the other hand, can help keep the costs in check. By following a development process that involves smaller development iterations called sprints, that typically last from 2-4 weeks, Agile allows for better feedback incorporation.
Agile development works well in case of projects where the scope is variable and keeps the development costs in check at the same time.
4. Software complexity
Complexity of the project can be further divided into three distinct classes.
- Tech complexity
- Design complexity
- Feature set complexity
Based on each of these parameters, the associated costs of software development also rise with an increased timeline of development. In addition to the existing features that you choose to develop, healthcare software development also requires the integration of health APIs.
These APIs perform a host of functions ranging from facilitating healthcare data interoperability and health records management to processing of payments and integration with payment gateways.
Depending on the complexity of the features you choose to integrate, the associated software development costs will also increase.
For example, if you want your software to connect with medical devices, or need to use artificial intelligence and machine learning algorithms to conduct data analytics, the healthcare software development costs would be correspondingly higher as compared to developing a simple patient appointment booking application.
How to accurately estimate the costs of your healthcare software development project
Step 1: Get in touch with the expert for the estimates
A company like Arkenea, that specializes in the field of healthcare software development can help you get a realistic estimate of the development costs. By sharing your exact requirements, you can get to know what sort of budget you would need to convert your software idea into reality.
By defining the business requirements and discussing them with the professionals, you can determine the budget while getting much required insight into the development time-frames as well.
While there are calculators available in the market that can help you make an approximate estimate when budgeting, an in-person consultation works best for most accurate estimates.
Step 2: Map out the requirements in advance
While the scope of the project may be variable, the end goal that your software needs to accomplish needs to be spelled out in advance. List out all the requirements and the possible constraints in advance. Establish the technical requirements, ground rules and assumptions for the development.
These baseline estimates need to be verified and validated by quantifying risks and conducting a risk assessment. Proper documentation and tracking of the requirements throughout the project lifecycle will help you achieve the goals while making accurate budgetary estimates.
Step 3: Take post-development costs into account
Healthcare software development has a compliance cost associated with it. In order to address the security of patient health information and avoiding hefty fines for non compliance to HIPAA compliance needs to be at the forefront of every project.
The continuous testing and maintenance costs for security compliance under HIPAA needs to be accounted for when estimating the overall costs. Additionally, make sure to allocate the required budget to maintenance of the software post its deployment.
Ready to get started?
If you are ready with your specifications and need an exact estimate on how much your project would actually cost, our team can help you out. With more than a decade of experience in the healthcare software industry, we specialize in development of HIPAA compliant medical software.
Get in touch with our consultants for an accurate estimate of the cost for your healthcare software development project today.