You’re dealing with sensitive data, navigating strict regulations, and real problems that affect people’s health.
And you can’t afford to make mistakes.
That’s why you need a clear, structured approach if you’re thinking about building healthcare software.
In this article, we’ll walk you through all you need to know – the main types of healthcare software, the real benefits, the step-by-step development process, and the biggest challenges you’ll face.
Let’s dive in!
Table of Contents
Understanding healthcare software: main types and use cases
Healthcare software helps solve real problems for patients, doctors, clinics, and hospitals.
It cuts down on admin work, makes care more accessible, and keeps your patients’ sensitive data safe.
Electronic health records (EHR) software: Digital storage of patient data (medical history, test results, prescriptions) all in one place for easy access and better care.
Medical billing software: Automates billing, insurance claims, and payments. Reduces errors and speeds up reimbursements for healthcare providers.
Telehealth platforms: Connect patients and doctors through video calls, chat, and remote consultations which expands access to care beyond the clinic.
Health tracking apps: Help users monitor fitness, chronic conditions, medication, and wellness goals.
Healthcare facility management software: Manages hospital operations, like room scheduling, equipment maintenance, and resource tracking, to boost efficiency.
Hospital information systems (HIS): Centralizes clinical, administrative, and financial hospital data to simplify operations across large healthcare facilities.
Patient portals: Give patients secure access to their medical records, appointments, test results, and direct messaging with doctors.
Medication tracking apps: Remind patients to take medications on time and track adherence to reduce missed doses and improve treatment outcomes.
E-prescribing software: Allows doctors to send prescriptions directly to pharmacies.
Remote patient monitoring (RPM) software: Collects real-time health data from patients via wearables or home devices.
Laboratory information systems (LIS): Manages lab workflows, from sample tracking to test results, to improve accuracy and speed up diagnostics.
Medical imaging software: Securely stores, processes, and shares radiology images and supports faster diagnosis and remote collaboration between specialists.
Every one of these tools solves a specific problem. But they also need to work together.
And that’s where the challenge – and opportunity – lies.
And these aren’t just empty words, either. Let’s take a closer look at one of the biggest trends in healthcare software right now: telehealth and virtual care.
Telehealth platforms have changed the game when it comes to patient experience. Patients no longer need to sit in waiting rooms or travel long distances just to get care.
Both patients and healthcare leaders want it – over half of patients in the U.S. reported increased satisfaction with their care because of telehealth and virtual care.
Plus, around 90% of healthcare leaders say virtual and connected care will play a major role in their strategies for 2025 and beyond.
And that’s just one type of healthcare software.
In short, it’s simple – when you remove barriers to care, the patient experience improves.
And healthcare software is the best way to do just that.
Lower long-term costs
Investing in healthcare software can be a great financial decision.
Yes, the upfront investment can be significant. But the long-term savings are even bigger.
First, there’s automation. Tasks like billing, scheduling, and data entry eat up time and resources. Medical billing software reduces human error and accelerates claims processing.
That can save you a lot of money. According to a Gartner survey, a third of accountants make several errors a week due to capacity issues and increased workloads.
But, companies with high technology acceptance see error rates drop by as much as 75%.
And that translates into a lot of time and money saved.
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Another way healthcare software can lower costs is by improving your operational efficiency.
Hospital information systems, for example, can eliminate duplicated tests, fix scheduling overlaps, and ensure smoother operations.
For large hospitals, this better operational efficiency translates to millions in annual savings.
Moving to cloud-based systems cuts IT infrastructure costs, too. No need for expensive physical servers or constant upgrades.
Cloud-based EHRs and other healthcare platforms are scalable, secure, and easier to manage which reduces maintenance costs over time.
Eventually, healthcare software pays for itself. It cuts costs where it matters most: admin overhead, resource inefficiencies, and compliance risks.
That’s how you turn an upfront investment into long-term ROI.
Easier regulatory compliance
Compliance in healthcare is non-negotiable.
Regulations like HIPAA, GDPR, and others are there to protect patient data. But for providers, staying compliant can feel like chasing a moving target.
And that’s where good software makes a real difference.
Manual compliance processes are slow and error-prone. Healthcare software automates much of the heavy lifting and reduces that risk.
Take EHRs for example. They’re designed with built-in security features – encryption, user authentication, and role-based access.
These aren’t just technical buzzwords. They’re essential if you want to build HIPAA-compliant software, for example.
And the costs of non-compliance are steep. HIPAA violations can result in huge fines and even jail time:
By embedding compliance into the software itself, you reduce the risk.
You avoid manual errors, speed up audits, and can even stay ahead of regulatory changes.
In the end, investing in the right software is cheaper than paying for mistakes.
How to develop healthcare software: step-by-step guide
Here, we’ll give you a step-by-step guide on how to build healthcare software.
Define the problem and set clear goals
Before you build anything, you need to know why you’re building it.
Not “because we need an app.” Not “because our competitors have one.” That’s not enough.
Start by defining the real problem:
What’s broken?
What’s frustrating your team?
What’s costing you time and money?
For example, a telehealth platform will help solve access issues and an EHR will improve your data handling.
Each solves a specific problem. If you can’t describe the problem in one sentence, you’re not ready to build.
Once you know the problem you want to solve, the next step is setting clear goals.
And don’t fall into the trap of vague goals like “better user experience”.
Set specific and measurable goals – the SMART goals framework is a good place to start.
Here’s a few examples:
Reduce appointment no-shows by 20%.
Cut manual billing errors by 50%.
Improve patient portal adoption to 70% in six months.
Clear goals like this will keep your project focused and on track. Trying to fix everything at once usually fixes nothing and leaves you with a bigger mess to clean up.
Defining the problem and setting the right goal is your foundation.
Get it wrong, and every step after becomes harder.
Conduct market and user research
Knowing your users beats guessing every time. Building without research leads to wasted budgets and products no one wants to use.
You might think you know what patients or doctors need, but assumptions are dangerous and expensive.
Look at competitors who are already solving the problem you want to solve.
What are they doing right? More importantly, where are they failing?
Take patient portals, for example. MyChart is widely used because it easily connects with EHRs and simplifies record access.
But it often receives complaints about clunky user experience and poor mobile design. That’s a clear opportunity to build something better.
User research is just as important.
You need to talk to real people – patients, clinicians, administrative staff – anyone who will use or be affected by your software. Don’t just rely on general surveys.
Good research also tells you what not to build. Just because a competitor adds an AI feature doesn’t mean it adds value. Unless your users need it, it’s just noise.
Quantitative data is important, but qualitative insights are where you find real user pain points. For the best results, combine both.
In short, doing market and user research protects you from wasting time and money.
And they’re key to building software end-users actually need.
Research compliance requirements
In healthcare, compliance isn’t optional. It’s the first thing regulators look at. And it’s the first thing that will cost you if you get it wrong.
Fines, lawsuits, and reputational damage are all on the table. That’s why you need to understand compliance requirements early.
Start with the basics. Here are the most common regulations that could apply to your product:
HIPAA in the US
GDPR in the EU
ISO 13485 for medical devices
IEC 62304 for health software lifecycle safety
MDR for products distributed in the European Union
Let’s dig a bit deeper into the heavy hitters – HIPAA and GDPR.
If your software touches protected health information (PHI), HIPAA applies to you – and it sets strict standards for how health data is managed in the U.S.
These standards apply to everyone who handles PHI: hospitals, medical staff, insurance companies, software vendors, and service providers.
Here’s how they impact software development in particular:
Key HIPAA rules that impact software development: overview
HIPAA Rule
What it covers
Why it matters
Privacy Rule
Sets standards for how PHI can be used and disclosed.
Determines what data you can collect, who can access it, and under which circumstances.
Security Rule
Requires administrative, physical, and technical safeguards for electronic PHI.
Directly affects how you build your product, including encryption, access control, and system monitoring.
Breach Notification Rule
Defines what to do when PHI is compromised or exposed
Requires you to quickly and transparently detect, document, and report breaches.
Next, let’s talk about GDPR.
GDPR is the European Union’s data protection regulation.
It sets strict rules on how personal data is collected, stored, and used – including health data, genetic data, and fitness and wellbeing data.
It’s smarter to launch a finished product in 12 months than rush an unfinished one in 6.
Remember, software development isn’t linear. Your roadmap should be flexible enough to adapt without derailing the entire project.
And make sure to leave room for iteration, as user feedback will change your priorities.
That’s how you build a plan that actually works.
Design the user experience (UX)
In healthcare, bad UX isn’t just frustrating. It can be dangerous.
Confusing interfaces can cause patients to miss appointments, doctors to lose critical time, and critical information to get buried
Good design fixes that. It isn’t about making things pretty, it’s about making things work.
You should start with wireframes and user flows. These are simple layouts that show how users will move through the app.
Can a patient book an appointment in three taps? Can a doctor see lab results without digging through 4 different menus? If not, rethink it.
And you need to pay particular attention to accessibility.
In healthcare, it’s non-negotiable, especially for patient-facing applications – your software has to work for everyone. That means:
Large fonts
High-contrast colors
Screen reader support
Clear navigation
And the key to designing a good UX? Feedback loops.
Collect feedback from actual users – patients, doctors, admin staff. You’ll hear things you didn’t expect.
What seems logical to a designer might confuse a nurse in a busy hospital.
Designing healthcare UX is about empathy. Understand the user’s mindset, whether they’re a stressed parent booking a pediatric visit or a doctor switching between five patients.
Choose the right tech stack
Choosing a tech stack shouldn’t be about chasing the latest trends.
It should be about what works for your product, your users, and your business.
In healthcare, the stakes are higher. Security, scalability, and compliance come first. Fancy frameworks come second.
And every tool in your tech stack should support that.
So, how do you make the right choices?
Start with your product goals. Are you building a patient-facing mobile app or a backend-heavy hospital information system? Different problems need different tools.
React Native might be perfect for a cross-platform health tracking app while a high-load EHR system needs robust backend technologies like .NET or Java.
Next, you need to think about scalability. If thousands of users log on at the same time, can your stack handle it?
Cloud platforms like AWS or Azure offer flexibility and global reach. That’s why many healthcare providers have moved critical systems to the cloud.
Interoperability matters too. Your software will need to talk to other platforms like EHRs, LIS, imaging systems, and insurance portals.
Supporting data standards like HL7 and FHIR is essential. Ignoring this will make future integrations a nightmare.
Finally, think long-term. The cheapest option today might cost you more in maintenance and rework tomorrow.
Technical debt builds up fast. A solid, well-thought-out tech stack avoids that.
Build and launch your healthcare software
Finally, once you’ve got everything in place, it’s time for the magic to happen and start building your software.
We’re not going to get stuck in the weeds and get super technical here – we’ll just leave you with a couple of important tips and best practices for successful development.
First, use agile development methodologies like Scrum. Scrum is based on short (2-4 week) iterations called sprints which act like mini development cycles.
And it works because you continuously get feedback from users and stakeholders, which keeps your team responsive and prevents surprises mid-development.
For healthcare software, where availability is critical, this is a must.
Before a full-scale launch, consider a soft launch or pilot program. Release to a small group of users, collect feedback, and fix what doesn’t work.
And once your software is live, your job isn’t done.
Make sure to monitor performance and track key metrics like user engagement, error rates, and system uptime. Use analytics to spot issues early and listen to user feedback.
A successful launch is not the end. It’s just the start of a long-term process of improvement.
Key challenges in healthcare software development
Finally, we’ll cover the main challenges you’ll face in healthcare software development.
Avoiding scope creep
Scope creep is the silent killer of software projects.
It never feels like a big deal at first. One extra feature here. A “quick” improvement there. But over time, it snowballs.
And then your deadlines slip, your budget explodes, and quality suffers.
If you want a deeper dive into how it really happens in software projects, watch this short podcast where DECODE co-founder and CEO, Marko Strizic, breaks it down in detail:
But, what’s the root cause of scope creep? A lack of clear priorities. When everything is important, nothing is.
You should only build the features that solve the core problem. Everything else goes to the backlog.
Take remote patient monitoring tools. Their goal is clear: track vital signs, alert doctors to critical changes, and reduce hospital readmissions.
Features like gamification or social sharing might sound appealing. But they don’t support that goal.
Another common cause is stakeholder pressure. Investors, board members, or even internal teams push for “just one more feature” before launch.
But adding features late in the game leads to rushed development and poor testing. In healthcare, that’s a risk you can’t afford.
The solution is discipline. Lock the scope of version 1.0 and communicate it clearly to all stakeholders.
Also, set up a clear change management process to evaluate if the requested changes align with your primary goal.
Avoiding scope creep doesn’t mean refusing to improve.
It means focusing on delivering a working, valuable product first that solves the problem you set out to solve.
Integration with legacy systems
Legacy systems are everywhere in healthcare.
Old EHRs. Outdated lab software. Custom billing solutions from a decade ago. And they’re not going away anytime soon.
And if you’re not ready to invest in that too, you’ll have to integrate with these systems.
The challenge is that legacy systems weren’t built for today’s needs. Many lack modern APIs, use inconsistent data formats, and rely on outdated security standards.
Integrating with them takes time, skill, and patience. Still, it can be done.
Start by understanding what systems you need to connect with and:
What data do they hold?
How is that data structured?
Who uses these systems?
You can’t plan integration if you don’t know what you’re getting into.
Use interoperability standards wherever possible to bridge the gap between old systems and modern apps. Building around these standards saves time and reduces custom work.
Be prepared and plan for surprises. Legacy systems often have quirks like incomplete documentation and hidden dependencies.
Cutting corners here is a mistake. Poor integration leads to data silos, breaks workflows, and puts you at risk of non-compliance.
Treat it as a core part of development, not an afterthought.
Ensuring strong security
In healthcare, security isn’t a nice-to-have. It’s life-or-death serious.
You’re dealing with sensitive data like medical histories, test results, and billing information.
A breach isn’t just embarrassing – it’s devastating. Healthcare is one of the most targeted industries for cyberattacks, with over 181 ransomware attacks in 2024 alone.
So, it’s no surprise that the average cost of a data breach is highest in healthcare:
And recovering from a breach is slow and trust is hard to rebuild.
The first step to ensuring security is understanding what needs protection.
It’s not just databases. Think about every entry point: mobile apps, APIs, cloud storage, and even email notifications.
Every touchpoint is a potential vulnerability. Make sure to encrypt data at rest and in transit. No exceptions.
But encryption is just the start. You need role-based access controls as well. Not everyone should see everything – a receptionist doesn’t need access to clinical notes.
Multi-factor authentication (MFA) should be standard, too. Many breaches happen because of weak access controls, not sophisticated hacks.
Training is another important factor. The best security systems fail if your staff clicks on phishing emails.
Security is a company-wide responsibility. Not just the IT department’s problem.
But, building strong security into your software from day one is cheaper than cleaning up a breach later. Much cheaper.
In the end, security is all about trust. And if you lose that, you lose everything.
Healthcare software development: FAQs
It depends on how you work and your specific needs.
Off-the-shelf software is faster and cheaper to get started with, especially for common use cases.
But if you have complex workflows or you’re building something new, like a digital health product or software for a specialized clinic, custom software will be a much better fit.
Right from the start.
Testing isn’t a final phase. It’s a core part of the development process.
Involve QA during discovery. Let them challenge requirements, flag risks, and plan early test strategies. The earlier they’re involved, the better the product.
Early testing will reduce future rework and help you ship faster with fewer surprises.
Healthcare systems are deeply interconnected.
Your product will need to work with different types of data and integrate with tools and systems like:
EHRs
Wearables
Lab systems
Billing platforms
And if your software can’t do that, it won’t be adopted
Need a reliable development partner?
Do you want to build new healthcare software or modernize your legacy systems but can’t seem to find a partner who can handle it?
Well, you’re in the right place.
We’re an EU-based, high-caliber software development company with 12+ years of experience developing complex, enterprise-grade custom software for a wide range of industries, including healthcare.
And we’re confident we can help you, too.
If you want to learn more, feel free to reach out and our team will be happy to set up a meeting to discuss how we can help you in more detail.
Damir knows how to build partnerships that last. With 20+ years of experience in sales leadership, business development, and tech consulting, he’s helped companies grow, scale, and adapt - whether by leading teams, building businesses from scratch, or driving digital transformation. He started with a degree in history and archaeology before adding an MBA and training in negotiation, web development, and more. That mix of curiosity and drive is what makes him great at what he does.
Outside of work, you’ll find him on the trails, pushing his endurance limits, or at home keeping up with his three kids. And when he's not on the move, he's diving into the latest and greatest history books and documentaries.
