13 min read

Guide to software development for the healthcare industry

Healthcare

Whether you’re trying to streamline workflows in a hospital or bring an innovative medical product to market, you will definitely need some sort of application. So, healthcare software development likely landed on your radar. You’re not alone — many businesses see the value the software brings, so the global healthcare IT market is expected to grow from $663B in 2023 at a staggering annual rate of 15.8% to 2030.

Technology in healthcare is multifaceted, and has proven efficient at resolving many issues scourging the industry — high costs of care, medical professionals shortage, tangled clinical workflows, and ever-growing paperwork. When considering software development, the healthcare industry looks into adopting advanced technologies to boost care efficiency and cut costs. And it’s not in vain: McKinsey research suggests that implementing AI, ML, and deep learning for healthcare will result in net savings of up to $360 billion.

Like with any other high-stakes projects, starting healthcare software development may be overwhelming. This guide is here to help you understand what goes into building effective, compliant, and future-ready medical software. In this article, I’ll walk you through the essentials: from planning the development process to navigating regulations and avoiding costly pitfalls.

What makes healthcare software development different from other projects

Healthcare software development covers building a wide spectrum of IT solutions, from patient apps and EHRs to medical device software. What sets it apart from other domains like finance or eCommerce is the weight of responsibility. Any mistake can not only cause downtime and fines but may affect people’s health — and not every software vendor is ready to take on this level of accountability and deliver on the promise.

From my experience, these are the core aspects to look out for during software development for medical use.

First, there’s regulatory compliance. Every project decision must align with the relevant regulatory requirements, like HIPAA, GDPR, MDR, or FDA. A missing audit trail or a deviation from security requirements may set back the app launch or even lead to fines.

Then comes data privacy and security. Healthcare deals with protected health information (PHI), meaning even a simple patient app should be protected with end-to-end encryption, strict access control, and other measures.

What’s more, data interoperability is a must. In healthcare, many IT systems should work in sync, so data exchange standards like FHIR or HL7 must be ingrained into the software from the very beginning.

Finally, there’s risk and safety management, which is especially relevant for SaMD or SiMD. A wrong dosage calculation or faulty integration with a wearable could have real-world consequences, so taking the time to validate clinical accuracy and manage risks is essential.

Types of software developed for healthcare

Healthcare software varies a lot — from activity tracking apps to complex diagnostic solutions. Here are some of the common healthcare software types we can help you build and implement.

Patient software

Health monitoring software for vitals tracking and remote monitoring of patients with chronic conditions

Mental health software with mood tracking, guided mental wellness support, and therapy tools

Medication tracking software for prescriptions management and intake schedules tracking

Health & wellness software with fitness, nutrition, and activity tracking aimed at fostering healthy lifestyle changes

Virtual health assistants and chatbots for patients’ support requests handling, appointments booking, and reminders and follow-ups sendout

Telemedicine software for remote consultations, virtual patient care, and monitoring

Apps with integrated wearable health devices for real-time health data collection

Diagnostics and treatment software

E-prescribing software for facilitated digital medication prescriptions

AI-powered healthcare software using machine learning algorithms for diagnostics, treatment suggestions, and workflow automation

Clinical decision support systems (CDSS) for accurate, evidence-based clinical decisions

Medical image analysis software for accelerated or automated processing of X-rays, MRIs, and CT scans

Smart diagnostic solutions for early disease detection and patient risk assessment

Information systems and data exchange

Electronic health record (EHR) software for storing and managing patients’ medical histories, as well as coordinating care

Radiology information systems for streamlined imaging workflows, reporting, and scheduling

Laboratory information management systems (LIMS) for centralized lab workflows, including sample tracking and result sharing

Picture archiving and communication systems (PACS) for storage, retrieval, and sharing of diagnostic images across care teams

Health information exchange (HIE) software for secure sharing of medical data across healthcare providers

Blockchain software for tamper-proof record keeping, e.g., ensuring sensitive health records are protected and operational tasks, like supply management, are traceable

Management software

Healthcare CRM software for better appointment management, patient communication, and enhanced patient engagement

Pharmacy management software for pharmacy inventory tracking, supply chain and prescriptions management

Healthcare analytics for better tracking of performance and efficiency metrics, patient outcomes, and resource use

Business intelligence (BI) software for making data-driven decisions across clinical and operational workflows

Medical inventory management software for tracking of supplies, equipment usage, and medications’ expiration dates and preventing inventory shortages or overstocking

Billing and revenue cycle management (RCM) software for managing claims, reimbursements, operational expenses, staff salaries, and financial reporting

Medical education & practice software helping medical professionals hone their skills, get necessary training, and master their capabilities in simulated environments

Off-the-shelf vs custom healthcare software development

When it comes to software development for healthcare, most organizations face early crossroads: buy an off-the-shelf solution and tailor it or build a custom one. Both paths have their merits, and the right choice always depends on your business needs.

Off-the-shelf healthcare software

Pros

Off-the-shelf solutions are ready-made systems that can be deployed quickly. The appeal here is obvious: faster implementation, lower upfront costs, and tried-and-tested functionalities that have already been used across healthcare organizations.

Cons

Out-of-the-box platforms tend to offer limited customization, which makes it hard to tailor workflows to your exact needs or integrate them into your existing IT environment. In the long run, operational expenses for off-the-shelf solutions are much higher than for custom software — license fees tend to pile up.

On top of that, you inevitably get a vendor lock. It’s hard to migrate configurations and data from one system to another should you want to switch to another platform because of better functionality or lower pricing. Security can be another concern, especially when the vendor doesn’t offer sufficient security features or doesn’t follow your region-specific compliance protocols.

Custom healthcare software development

Pros

This route is ideal for digital startups and healthcare providers with unique workflows. You get a system that’s tailored to your exact needs, designed with your users in mind, and built to scale alongside your business. Security measures are implemented from the ground up, and software is aligned with HIPAA, GDPR, MDR, or whatever regulatory frameworks apply to your case.

Cons

Naturally, custom software takes longer to build and usually requires a higher investment. But in high-stakes healthcare environments, the ability to adapt, extend, and fully own your software is often worth it.

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Benefits of software development in healthcare

As medical solutions vary a lot in functionality and use cases, the benefits they bring may also be very different. Say, a healthcare management software development project will likely automate routine workflows within a practice, building a CDSS will lead to more accurate diagnoses, and hospital software development will give a full picture of care and operational processes.

That said, here are the most common benefits Innowise’s clients experience.

Enhanced patient experience and communication

Many healthcare solutions directly or indirectly influence patient experience, helping them stay informed and making overall interaction with healthcare providers smoother. From appointment reminders to easy access to care details, it all contributes to more satisfying healthcare experiences.

Minimized medical data errors and better outcomes

Software reduces the need for manual input and standardizes data handling, lowering the chances of mistakes. With more accurate information available, care teams can make better decisions and drive stronger health outcomes.

Optimized efficiency and productivity

Well-designed software reduces unnecessary steps, automates routine tasks, and simplifies workflows. It leaves more time for critical work, enables faster service delivery and better allocation of staff and resources.

Reduced costs

Software helps healthcare organizations spend smarter by identifying inefficiencies, minimizing paperwork, and improving equipment use. Over time, this leads to lower operational expenses and more sustainable care delivery.

Enhanced data security

Implemented security protocols help safeguard sensitive medical data. With access controls, encrypted data storage, and regular monitoring, healthcare software supports PHI privacy and holds strong against potential breaches.

Ensured regulatory compliance

When built correctly, software follows industry-specific regulations to a T. You don’t need to worry about upcoming compliance audits, fees for non-compliance, or patient data loss because you know the software is aligned with all applicable legal standards.

Healthcare software development life cycle (SDLC)

The backbone of every successful healthcare software development project, the Software Development Life Cycle (SDLC) keeps the project running smoothly and hitting the business goals and KPIs.

There are different ways to approach the SDLC, depending on your organization, software type, and risk class. Most of the time, we at Innowise follow Agile methodologies, such as Scrum or Kanban. Our team relies on a tried-and-true approach, refined through dozens of successful projects and tailored for high-stakes medical software. Here’s what our process typically looks like.

Project planning

At this stage, we work with you to define the software vision, map out risks, and shape the project scope. Also, our team checks the applicable regulations. If the project falls into medical device software categories, we also outline the regulatory class (according to FDA and MDR), applicable regulatory pathway, and necessary project documentation.

The main goal of this stage is to set a high-level plan that ensures the project is aligned with business goals, delivery timelines, and compliance requirements.

Requirements engineering

Innowise’s team gathers and analyzes all functional and non-functional requirements, thinking about user roles, clinical workflows, integration needs, technical limitations, and usage scenarios. We also create a development plan, a V&V roadmap, and align everything with relevant regulations. For medical device software projects, we strictly follow ISO 13485 and IEC 62304 standards.

Solution design and UX/UI design

Here, we create the technical blueprint based on the gathered requirements. That includes designing software architecture, outlining features, planning software and hardware integrations, selecting best-suited interoperability standards (like FHIR or HL7), and devising data protection strategies.

Then, our UX/UI designers map out user journeys for patients, clinicians, or administrative staff and create intuitive interfaces. In healthcare, design is more than just looks — it’s about accessibility, clarity, and minimizing user errors. We follow WCAG accessibility guidelines and can develop even AAA-level interfaces

Software development and testing

So, in our healthcare projects, development moves forward in iterations, with backend and frontend built and tested in parallel. Our team pays special attention to QA because, in healthcare, even small errors can have serious consequences. We run unit, integration, and system tests early and often to catch bugs, performance issues, or usability flaws.

At this stage, we also implement risk controls, build in smart device or software integrations, and maintain thorough documentation to support future audits and SaMD/SiMD regulatory submissions.

Compliance verification

Here, every aspect is reviewed against relevant regulations like HIPAA, GDPR, MDR, or FDA and standards like ISO 13485 or IEC 62304. For medical device software projects, we also make sure the product works as expected under real or simulated conditions.

Whether the software supports diagnosis or manages protected health data, Innowise verifies that it’s built to pass audits, certifications, and clinical assessments. To prepare for regulatory review, we gather comprehensive project documentation (e.g., Technical File).

Software launch

Once development and compliance checks are complete, we move to deployment. That includes configuring a live environment, releasing the solution, and preparing user training guides.

For SaMD/SiMD projects, Innowise ensures the software is approved by relevant authorities before the go-live. At this stage, we also set up a system for post-market surveillance, so performance, safety, and clinical outcomes are timely monitored.

Post-launch maintenance

From my experience, software development for healthcare isn’t a one-and-done job. That’s why post-release Innowise’s team monitors performance, releases updates, and adjusts the medical software based on user feedback. Furthermore, we update the software in line with evolving needs, clinical processes, and regulations to keep it safe and efficient over time.

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Challenges of software development in the medical field

Building software for the healthcare industry isn’t without its challenges, but they’re far from insurmountable. When working with experienced vendors like Innowise, many of these risks are mitigated early in the process. With careful planning, technical expertise, and domain knowledge, my colleagues and I know how to address these issues effectively.

Strict regulations and compliance

Healthcare software development projects must meet numerous regulations — HIPAA, GDPR, HITECH, and more. Each adds layers of complexity, especially for solutions like SaMD or SiMD.

How we solve it: The key is to consider compliance requirements and limitations from day one and plan the project around them. For instance, we sign the Business Associate Agreement with the clients that need to comply with HIPAA before the development starts. Also, Innowise’s SMEs collect necessary project documentation at each project step. It helps us make sure each aspect of the clinical software development is well-documented and ready for audits and submissions.

Keeping up with technologies and standards

Healthcare technologies and data exchange protocols are constantly evolving, which makes their implementation more complex and frustrating.

How we solve it: Working with healthcare clients daily, Innowise’s team is immersed in the industry’s needs and changing environment. That’s why we keep track of all important technology and regulatory changes, and many of our clients agree that we speak the same language. On the other hand, Innowise’s team features a wide range of talents, including those proficient in advanced techs like AI, ML, big data, and blockchain, and we can always access this expertise during health software development projects.

Integration challenges

Integrating new software into existing healthcare ecosystems—whether it’s an EHR, PACS, CRM, or a connected device—often comes with compatibility issues. These can range from inconsistent data formats to outdated APIs.

How we solve it: With years of practical experience with healthcare standards like HL7, FHIR, and DICOM behind our belts, we start with a thorough assessment of the existing infrastructure to identify potential integration issues early. When needed, our engineers develop custom connectors and data transformation scripts. Additionally, we perform compatibility tests using both simulated and real-world data to validate integration before deployment.

Balancing functionality and user-friendliness

Healthcare software is often targeted at a wide range of roles — clinicians, patients, administrators — each with different needs.

How we solve it: Designing a solution that’s powerful but not overwhelming requires careful UX research, prioritization of features, and iterative testing with real user scenarios. Innowise’s team creates role-specific interfaces with tailored functionalities, ensuring that critical features are prominent and easy to access. Prototyping and early usability testing allow us to gather feedback from actual users, which we use to refine the interface and streamline workflows.

Cost of developing software for the healthcare industry

There’s no way to put a price on software development in healthcare without knowing the specifics. The costs of a simple medication reminder app and an AI-based CDSS vary a lot, so it really boils down to what you’re building. Here are the key factors that shape the pricing.

Customization of an off-the-shelf product or custom development

Software complexity and feature set

Use of advanced technologies (e.g., blockchain, AI, ML, and others)

Supported platforms (web, desktop, mobile)

Native or cross-platform development for mobile apps

Integration with medical devices, wearables, or IT systems

Data storage, performance, scalability, and security needs

Compliance with HIPAA, GDPR, FDA, MDR, IVDR, and other relevant regulations

If you’re outsourcing development, the healthcare software development cost also depends on:

Team size, composition, and qualifications

Timeline constraints and project duration

Team location and hourly rates

Pricing option (T&M or fixed price)

Considering all those variables on your own can be frustrating. If you have a project in mind, let’s talk. My colleagues and I can give you a realistic number based on your idea and high-level requirements.

Current trends and the future of healthcare software development

Healthcare software is evolving fast, and from what I’ve seen, the pace isn’t slowing down anytime soon. We’re seeing major shifts in how care is delivered and managed, driven by tech solutions that become more intelligent, secure, and patient-centered. Some key trends shaping the future include:

AI in healthcare, which powers diagnostics and clinical documentation

Blockchain for securing health data and enabling transparent record-keeping

Telemedicine enabling remote appointments

Want to dive deeper into the trends that shape the industry? My colleague Anastasia wrote a full-fledged article on healthcare trends to watch in 2025, so check it out for more insights.

Why choose Innowise’s healthcare software development services

Software development in healthcare is never simple. There are countless variables to consider, like compliance, security, and interoperability. The best way to avoid unnecessary headaches is to work with a partner who’s done it all before.

Innowise is that kind of partner. We know the ins and outs of healthcare IT and are fully equipped to deliver secure, compliant, and high-performing solutions. Healthcare software development, IT consulting, legacy system modernization, data migration — Innowise offers everything under one roof, so you won’t need to juggle multiple vendors. Here is what you get when you work with Innowise.

A dedicated 60-person healthcare team, including delivery managers with 5–15 years of experience in the domain

A mature approach backed by ISO 13485, ISO 9001, ISO 27001 certifications, deep understanding of OWASP and SOC2 security principles, and DevSecOps practices

Practical knowledge of compliance requirements, including FDA and MDR for medical device software, HIPAA, GDPR, HITECH, and other regional regulations

Hands-on experience with healthcare standards, like FHIR, HL7, and DICOM, to ensure full interoperability and data exchange without losses and fragmentation

Over the years, we’ve delivered 100+ healthcare projects, like this AI skin scanner app with 80% diagnostic accuracy or this inventory management solution reducing expired supplies by 46%. If you are looking for a healthcare software development partner to turn your idea into reality, drop us a line.

Aleh Yafimau Senior Technical Delivery Manager in Healthcare and MedTech

Date: Apr 23, 2025

Aleh Yafimau Senior Technical Delivery Manager in Healthcare and MedTech

Date: Apr 23, 2025

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