Costefficient healthcare software development

Cost-efficient Healthcare Software Development: to Hire or to Outsource?

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Costefficient healthcare software development

An ultimate guide to healthcare product development prices and costs around the world

For any start-up and product development company, choosing between internal development and outsourcing is an eternal dilemma. While both aspects have their pros and cons, and the best option depends on the company’s need, outsourcing is a faster, more agile, and cost-effective way to develop a product.

Healthtech market overview

Truth be told, Agile has become an overused buzzword. Though this does not mean that anyone can easily come up with a precise definition.

The year 2020 was a defining moment for the healthcare industry, as it was forced to modernize it’s infrastructure, undergoing a huge digital transformation.

The pandemic and other factors — one of which is an increased desire of patients to take an active role in their own healthcare process and decision-making — have accelerated the transition of offline medical services to digital, resulting in the need for secure, interoperable, and compliant software solutions.

This is the perfect time for the healthcare tech industry, as there has never been such high demand for quality products as there is today.

Combined market value of European healthtech startups

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The industry is shifting from standardized protocols to digital and virtual care and cloud-based customized medical services, which creates more and more healthcare data and the need for innovative technology. Stakeholders and participants in the healthcare market have to capture these emerging trends and quickly adjust to the new environment.

For healthcare startups, this time of change signifies an opportunity to introduce new products, solutions, and business models. Despite the fact that patients’ spending on medical services froze during the pandemic, investments in the health tech market continue to grow.

In 2022, investors brought $21.6 billion into digital health organizations, which is two times more than last year’s spending, and almost four times the amount invested in 2016, according to the research firm Mercom Capital Group.

Global digital health market size 2019 and 2026 forecast

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Between 2022 and 2024, some sectors that will see huge growth include telehealth and telemedicine, cloud and collaboration, interoperability, and compliance solutions. Global health spend CAGR will grow 3.9% until 2024. Digital health raised $14.7 billion in venture funding in the first half of 2021, according to Forbes.

Healthcare software development trends in 2021 and beyond

Between 2020 and 2024, some sectors that will see huge growth include telehealth and telemedicine, cloud and collaboration, interoperability, and compliance solutions. Global health spend CAGR will grow 3.9% until 2024. Digital health raised $14.7 billion in venture funding in the first half of 2021, according to Forbes.


Growth in the AI health market is expected to reach $6.6 billion by 2023, and projected to grow to ten times the size over the next five years. Acquisitions of AI startups are also rapidly increasing.

Artificial intelligence has many applications when it comes to medical services, and some of its capabilities are already in use. According to analysis by Accenture, important clinical health AI applications can potentially generate $150 billion in annual savings for the US healthcare economy by 2026.

Telehealth & telemedicine

Telemedicine has been in the spotlight for some time, but now there is an accelerated need for digital healthcare. With such fierce market demand, it’s no wonder that during the pandemic, investments in telehealth startups have tripled.

Telemedicine is becoming an equal, if not better, counterpart to traditional medical services. According to the Global Market Insights report, the global telemedicine and telehealth market will grow from the current $38.3 billion, to $130.5 billion in value by 2025. For healthcare entrepreneurs, it is a great niche and provides the possibility to introduce a competitive product to meet rising demand.

VR and AR

Virtual and augmented reality technology is used for numerous purposes in the healthcare industry, from teaching medical students to creating simulations for a better experience when patients receive treatment. According to Allied Market Research, the market for virtual and augmented reality products in healthcare is anticipated to reach $2.4 billion by 2026.

Cloud computing

Now, having a robust and integrated cloud infrastructure is no longer optional for healthcare organizations. With more patient data being accumulated, medical facilities need a network to easily collect, share and distribute these piles of information.

In fact, cloud computing in the healthcare market is expected to grow by $55 billion over the next few years. Additionally, the cloud computing market is poised to reach USD 287.03 billion during 2021-2025.

Healthcare software development: key challenges

Despite the fact that investors are willing to pour resources into the development of new healthcare solutions for a hot market, few startups actually succeed.

“On average, large IT projects run 45% over budget and 7% over time, while delivering 56% less value than predicted. Software projects run the highest risk of cost and schedule overruns”, states McKinsey.

Data privacy

Given the sensitive nature of medical data, any violation or discrepancy can result in costly and frustrating consequences, not only for patients but also for healthcare software providers and medical institutions.

According to Gartner, privacy regulations emerge as the top risk for most organizations, and this is no different for healthcare. The accumulation of sensitive patient information along with medical institution records and smart data from healthcare wearables creates a target for devastating and expensive cyberattacks and data breaches.

Ensuring compliance

It’s no secret that the entire healthcare industry is heavily tied to regulatory compliance, especially when it comes to tech innovations. Firstly, a non-compliant software or application won’t even make it to market.

Also, having a consistent and reliable mechanism for keeping healthcare solutions in line with updated policies and governmental standards is the primary determinant of success in a saturated market. In this realm, stakes are high when it comes to sensitive patient information, and mistakes can be extremely costly for everyone involved.

Quality software development

Ultimately, it’s the quality of the product that is the cornerstone of a company’s success; however, finding skilled and reputable talents that can deliver high-quality solutions without breaking the budget is a challenge.

In healthcare, it is even more complicated due to the complex nature of the industry, where product development requires experience and deep niche knowledge.

It is important to choose a vendor that can handle everything needed to build a successful software solution, from engineering and building architecture, to development and on-time delivery.

How to choose the development team?

Many companies end up choosing software vendors that either lack expertise, or are under or overqualified for the project’s budget. Another challenge is choosing the right employment model.

Mainly, there are two options: an in-house team, with all the members hired full-time, and outsourcing, which is primarily priced by hourly rates. Let’s take a closer look at the pros and cons of both options.

Hiring in-house teams is a common option for healthcare companies, which comes with some distinct advantages, but also some things to watch out for. For a long-term medical project, it may seem like hiring an in-house team is a more cost-efficient and reliable option. If you consistently need a team in close contact over a long period of time, this option can work. However, it is the tip of an iceberg.

Let’s imagine that to develop a healthcare product, you need a team of 3 software developers, a product manager, a project manager, UI/UX designer, QA engineer, and DevOps specialist.

While the programmers and product/project will likely be involved full time, other team members won’t have the full-time workload. That’s why when hiring in-house, you will drastically overpay for most of the team members.

With this set-up, a viable option is to hire essential team members in-house, and hire outsourced specialists for the rest of the positions. However, keep in mind that hiring employees in-house comes with many challenges and additional expenses.

If you decide to hire a team outside of the US, it may seem cost-efficient, but requires even more effort, time, and expenses. Eventually, it turns out to be too expensive, time-consuming, and troublesome for a healthcare startup to form an in-house team, whether locally or in other areas.

Let’s take a closer look at the pros and cons of in-house development teams.

AboutAndrei Kasyanau
As CEO at Glorium Technologies, I help tech startups bolster their teams with agile product development services on demand. Our custom development can reduce time to market by up to 30% with 40% in savings compared to in-house teams.