How Much Should a HealthTech MVP Cost?

The Biggest Mistake HealthTech Startups Make

One of the most common pitfalls for HealthTech founders is underestimating the cost and complexity of building an MVP (Minimum Viable Product).

Unlike other tech startups, HealthTech ventures face unique regulatory, security, and integration challenges that can significantly impact development timelines and budgets.

Many entrepreneurs believe they can apply general startup principles to healthcare software development, only to realize too late that compliance, data security, and integration with electronic health records (EHRs) introduce significant additional costs and constraints.

If you’re developing an MVP for a HealthTech startup, understanding what drives costs, how to budget efficiently, and where to optimize expenses can make or break your launch.

A well-planned budget ensures that your MVP is not only built efficiently but is also scalable, compliant, and capable of integrating with the larger healthcare ecosystem.

Let’s explore the key cost factors and how to maximize value while staying on budget.

Key Factors That Affect HealthTech MVP Cost

Development Team: In-House vs. Outsourced vs. Agency

The choice of your development team is one of the most significant cost determinants:

• In-house team offers long-term control and consistency but demands substantial investment in salaries, benefits, recruitment, and retention. Moreover, assembling an in-house team with expertise in HealthTech-specific development, security, and compliance can be particularly difficult, as experienced professionals in this space are in high demand.
• Outsourcing development to freelancers or offshore teams can appear cost-effective initially, but managing multiple contractors, ensuring high development standards, and maintaining project continuity can introduce hidden inefficiencies that slow down progress.
• Specialized HealthTech-focused agencies strike a balance between cost and expertise. Agencies that specialize in healthcare technology offer structured development processes, regulatory expertise, and efficient project management, ultimately reducing development risks while keeping budgets under control. While an agency may seem more expensive upfront compared to hiring a single freelancer, the long-term benefits of experience, quality assurance, and compliance expertise often justify the investment.

Compliance & Regulatory Requirements (HIPAA, FDA, GDPR, MDR, ISO)

Compliance with healthcare regulations is one of the defining cost factors for a HealthTech MVP, differentiating it significantly from standard software development.

• While a typical SaaS MVP can be launched with minimal legal concerns, HealthTech applications handling patient data must adhere to strict privacy, security, and interoperability regulations. Compliance with standards such as HIPAA and GDPR necessitates robust encryption protocols, multi-factor authentication, and detailed access controls to ensure data security.
• Additionally, products that qualify as medical devices must undergo FDA or MDR certification, which introduces substantial additional requirements, including clinical validation, documentation, and extended approval timelines.

Certification adds complexity because it mandates adherence to stringent quality management processes, such as ISO 13485, which outlines regulatory expectations for medical device software.

Failure to factor compliance into the development process from the beginning can lead to costly rework, legal risks, and substantial delays in bringing the product to market.

Compared to a general tech startup MVP, which can focus purely on features and user experience, a HealthTech MVP must allocate significant resources to security infrastructure, regulatory oversight, and legal consultation.

Technology Stack: AI, EHR Integrations, and Deployment Choices

The technology stack selected for a HealthTech MVP directly influences both initial and long-term development costs.

Unlike a conventional SaaS product that may prioritize speed-to-market over complex integrations, HealthTech products often require advanced data processing, seamless connectivity with EHR systems, and AI-driven decision-making capabilities.

• Opting for a Progressive Web App (PWA) may reduce costs compared to native mobile apps, but healthcare applications often require native functionalities, such as Bluetooth connectivity for medical devices or offline data storage for telehealth solutions.
• Additionally, AI-powered features, such as predictive analytics or image recognition, introduce significant complexity because they require extensive model training, validation, and regulatory approval before deployment.
• Integration with electronic health records (EHRs) further complicates development, as compliance with interoperability standards like FHIR and SMART on FHIR must be ensured.

Unlike standard business applications, which can function in isolation or integrate with widely available APIs, HealthTech solutions must navigate fragmented and often outdated healthcare IT infrastructures, increasing both development timelines and technical challenges.

Security & Data Protection

Security and data protection are non-negotiable in HealthTech development, adding significant overhead compared to traditional software products.

Unlike standard SaaS applications that primarily focus on user authentication and encrypted data storage, HealthTech solutions must implement end-to-end security measures, including role-based access control, audit trails, and secure cloud storage compliant with HIPAA or GDPR requirements.

The necessity for robust security frameworks extends beyond encryption and authentication; it also includes threat detection mechanisms, penetration testing, and continuous monitoring to mitigate cybersecurity risks.

Hosting decisions further impact costs, as deploying a healthcare application on a general-purpose cloud server may be insufficient for regulatory compliance. Instead, HealthTech startups often require HIPAA-compliant cloud hosting providers such as AWS, OVH, Azure, or Google Cloud, which offer specialized healthcare data security features.

These added layers of protection, while essential, substantially increase development costs and require ongoing investment in compliance monitoring, legal oversight, and infrastructure maintenance.

Understanding Complexity Levels in HealthTech MVPs

When planning your budget, it's crucial to understand how different complexity levels affect costs compared to standard software development.

Low Complexity MVP

A low-complexity HealthTech MVP is typically a digital-only solution that does not require regulatory certification.

You can imagine a fitness application or a web application to simply store some healthcare-related data. Compared to a general software MVP, which might include a simple marketplace, task management app, or content-sharing platform, a HealthTech MVP still needs to meet baseline security and data protection standards, even for non-regulated solutions like wellness tracking apps.

These products often require a higher level of backend infrastructure to handle sensitive health data, even if they do not qualify as medical devices. Unlike a standard SaaS MVP that can be built using common frameworks with minimal customization, HealthTech applications must ensure interoperability with healthcare systems, even at this basic level. Basically, in this situation, an MVP cost is similar to a standard MVP in other industries.

Medium Complexity MVP

A medium-complexity HealthTech MVP involves software-only solution that requires regulatory certification, such as an FDA- or MDR-compliant application.

You can visualise an application that collects some medical data and performs measurements basing on them. Unlike a traditional SaaS product that can launch with incremental updates, HealthTech applications requiring certification must include all necessary features at launch, as any significant changes post-certification can require reapproval, increasing long-term costs.

Furthermore, AI-powered features must undergo validation, which extends development time and regulatory scrutiny. In comparison, a standard SaaS MVP can incorporate AI incrementally without facing the same legal and compliance hurdles.

The extended development timeline and certification costs make this level of HealthTech MVP significantly more complex than a non-healthcare equivalent, therefore its cost is rising above a standard MVP in other industries to around 150-200%.

High Complexity MVP

A high-complexity HealthTech MVP includes both hardware and software components, such as medical devices connected with a SaaS platform, that must undergo MDR or FDA certification.

While a standard tech MVP may involve integrating third-party APIs or developing a scalable microservices architecture, a hardware-integrated medical product faces additional expenses related to prototyping, manufacturing, safety testing, EMC testing, biocompatibility and many more. Certification alone can take 1-2 years, meaning that a poorly planned budget or timeline can result in substantial financial risk.

Unlike a standard software MVP, which can be iterated upon rapidly, medical hardware startups must invest in comprehensive regulatory planning, supply chain management, and hardware validation before even considering market launch.

The costs associated with this kind of solution may even reach 500% of a standard MVP cost in other industries.

Additional Cost Considerations: Clinical Trials

Your certification needs depend on the intended use and context in which your product will operate the market.

For some medical devices, regulatory approval necessitates clinical validation through trials, adding another layer of complexity that is entirely absent in standard software MVPs.

In non-healthcare industries, product testing is generally limited to beta users, focus groups, or A/B testing; in HealthTech, clinical trials can take years and require significant funding.

The challenge is even greater for novel medical technologies, as the startup itself must generate clinical evidence through structured trials, often necessitating partnerships with hospitals, research institutions, and regulatory agencies.

This process introduces not only financial strain but also a higher level of risk, as a failed clinical trial can derail a startup's entire go-to-market strategy.

Strategic Approaches to Cost Reduction Without Compromising Quality

Now that we've examined the unique cost drivers for HealthTech MVPs, let's explore practical strategies to optimize your budget while maintaining quality and compliance.

Use Pre-built Open-Source Solutions

One of the most effective ways to reduce development costs while maintaining quality is by leveraging pre-built open-source solutions.

Many compliance-ready frameworks, such as FHIRboard and Healthstack, are available for free on Momentum’s GitHub, allowing startups to build upon a secure and well-documented foundation rather than developing everything from scratch.

These open-source solutions provide pre-tested modules that adhere to regulatory standards, helping startups avoid costly compliance-related setbacks. Instead of investing significant time and resources in developing healthcare data exchange protocols from the ground up, startups can integrate these ready-made solutions to ensure interoperability, security, and regulatory alignment from day one.

By utilizing these pre-built resources, startups can accelerate development timelines, improve interoperability, and ensure adherence to industry standards without incurring excessive custom development expenses.

Furthermore, leveraging open-source solutions also means benefiting from a broader developer community, where updates and security patches are continuously contributed, reducing maintenance overhead and long-term costs.

This approach not only speeds up development but also allows startups to allocate resources to innovation and differentiation rather than reinventing foundational components.

Optimize Infrastructure Costs

Infrastructure choices significantly impact long-term costs, and selecting the right hosting solution is critical to ensuring both scalability and cost-efficiency.

Public cloud solutions like AWS and Azure provide scalable and compliant hosting options that are cost-effective at the start but can lead to escalating expenses over time, especially as data storage and computing needs grow.

While cloud solutions offer flexibility, allowing startups to scale their infrastructure based on demand, their pay-as-you-go pricing model can quickly become a financial burden if left unchecked.

Additionally, cloud-based infrastructure requires careful attention to data residency, particularly within the EU, where regulations mandate strict tracking of patient data locations. Companies relying on cloud providers must ensure that their chosen service complies with GDPR requirements and that all sensitive health data is stored in appropriate jurisdictions.

On the other hand, private cloud solutions, built using bare-metal servers, offer greater control over security and compliance but come with high initial setup costs and increased maintenance requirements.

A private cloud infrastructure requires a dedicated team to manage hardware, security, and updates, but in the long run, it provides a stable cost structure, eliminating the risk of unforeseen cloud pricing increases. Unlike cloud solutions, where fees can surge due to increased API calls, storage usage, and bandwidth consumption, private cloud costs remain predictable.

Additionally, private clouds allow companies to implement stricter security policies and ensure full regulatory control, which is especially important for handling sensitive patient data. While a private cloud may require a larger upfront investment, it can ultimately reduce costs for startups with long-term data-intensive needs by preventing vendor lock-in and giving complete ownership over their infrastructure. 

For HealthTech companies planning to scale, evaluating both cloud and private cloud options is crucial, as making the wrong choice can significantly impact cost efficiency in the long run.

Feature Prioritization with MoSCoW

Prioritizing features effectively is crucial in balancing cost efficiency with compliance. The MoSCoW method—categorizing features into Must-have, Should-have, Could-have, and Won't-have—helps in defining a lean yet functional MVP.

However, in HealthTech, the trade-off is complex because regulatory certification necessitates a complete and stable product before launch.

For a standard SaaS MVP, MoSCoW is a straightforward process—startups can launch with minimal viable functionality and iterate based on user feedback. However, in HealthTech, the trade-off is significantly more complex because regulatory certification necessitates a complete and stable product before launch.

While keeping the MVP minimal is desirable to reduce costs and shorten time-to-market, certifying an incomplete product is futile and can waste significant resources. For instance, if a HealthTech product undergoes an FDA or MDR certification process but lacks key compliance features required for real-world use, recertification will be needed, resulting in duplicated costs and extended delays. 

Additionally, certification processes are often time-consuming, taking months or even years, meaning that every feature included in the MVP must be strategically chosen to maximize market readiness while avoiding unnecessary regulatory hurdles.

This is why consulting with compliance experts and potential clients early in the development cycle is essential. Experts can help assess which features are truly necessary for certification and initial market adoption, ensuring that no unnecessary complexities delay regulatory approval.

At the same time, gathering input from healthcare professionals and potential customers ensures that development focuses on real-world usability rather than hypothetical needs.

By carefully balancing regulatory requirements with market demands, startups can streamline the certification process, minimize costs, and ensure that the MVP is both legally and commercially viable from the outset. 

The Momentum Approach to HealthTech MVP Development

At Momentum, we specialize in building cost-effective, compliant, and scalable HealthTech MVPs while ensuring that founders avoid unnecessary expenses while meeting regulatory standards. By prioritizing lean development strategies, secure architectures, and compliance-first roadmaps, we help startups bring their solutions to market efficiently and cost-effectively.

Our structured approach delivers value in three key ways:

Transparent Pricing & MVP Roadmap

• Detailed cost breakdowns with clear milestones and deliverables
• No hidden fees or surprise scope expansions
• Regular budget reviews and resource allocation optimization

Lean Development Approach

• Start with core functionality that delivers immediate value
• Implement automated testing to reduce QA costs
• Leverage our pre-built, HIPAA-compliant infrastructure components to accelerate development

Compliance-First, Cost-Effective Solutions

• Built-in regulatory expertise that prevents costly compliance fixes
• Pre-configured security frameworks that meet HIPAA requirements out of the box
• Risk assessment and mitigation strategies integrated into the development process

Our clients typically save 20-30% on their MVP development through our specialized approach to HealthTech. We focus on building smarter, not bigger – developing core functionality first and ensuring compliance is addressed early to avoid expensive remediation later.

Taking the Next Step

Every HealthTech product has unique requirements and challenges. The best way to get an accurate estimate is through a tailored consultation with experts who understand both healthcare and technology.

Get a Custom Cost Estimate – Book a Free MVP Strategy Session Today!

During this session, we'll help you:

• Define your MVP scope and requirements
• Identify potential compliance considerations
• Outline a development roadmap with clear budgets
• Explore cost optimization strategies for your specific product

Let's build something that transforms healthcare together – on time and on budget.