Launching healthcare tech is one of the most challenging roles a business can undertake. Because of the sensitive nature of health products, they undergo more rigorous compliance and regulatory checks than most other products, which contributes to the extremely high failure rate of healthcare technology startups.
Yet with some foreknowledge, you can prepare for potential issues. From staying compliant to cybersecurity, here are some examples to keep in mind.
Obtaining Regulatory Approval
It can be a bit of a regulatory nightmare launching any kind of healthcare product or business. Most of the issues are focused on patient data and connected systems. However, it doesn’t really matter where the concerns are, just that they are met.
Many new startups underestimate the importance of obtaining regulatory approval after filing an FDA cybersecurity submission, for example. These kinds of missteps can undervalue the launch and shift your planned timelines.
Launching Healthcare Tech and Staying Compliant
A 2025 report by FireMon found that 60% of business firewalls failed compliance checks of critical systems. Failing a critical check means your product won’t be deemed compliant, as it poses a security risk to any individual or business using it, which comes with further costs:
- The main costs are associated with building a compliant product from day one.
- Further costs come from setting up compliance processes and policies at the company.
- Audits, legal advice, and regulatory guidance will also add to the financial costs.
International Regulation Roadmaps
If you plan to launch internationally, your headaches basically multiply. Getting a healthcare product off the ground in one country is challenging enough. But going overseas presents even more hurdles.
Any company planning to enter the international market will immediately face further financial burdens, which include a roadmap for meeting compliance and regulations in said countries. This can only be done with expert guidance, which is likely to also cost more.
Legacy System Integration
The healthcare systems in use today are pretty much well established, so even getting clients to consider switching to another or introducing something new is a massive challenge. In some cases, healthcare products are decades old but highly reliable.
This means any products must be able to adapt to interface with legacy systems that the healthcare sector trusts. This alone can cost tens of thousands of dollars, as your system integrates with EHR, for example.
API Costs of Launching Healthcare Tech
While 60% to 80% of business startups fail in general, the rate of failure in healthcare tech is much higher at 98% for digital health. Even if you plan to use AI in your business, launching healthcare tech still comes with API costs that can have a significant impact on the budget.
Development and integration
A massive expense that is probably aware of is electronic health record (EHR) integration that connects to systems such as Epic and Cerner, which can cost between $25,000 and $150,000.
Licensing and vendor fees
One of the most overlooked costs is software licensing. Health software in particular is pretty expensive, and you can expect to pay around $5,000 for access to Oracle Health systems.
Security and compliance
Of course, there is a lot of focus on security with healthcare tech. HIPAA and GDPR compliance can potentially add around 20% to 40% to the total cost of compliant software development.
API costs can range from a few thousand to hundreds of thousands, depending on the scope and scale of your product. The costs can also carry on year after year as the developer is responsible for finding and fixing security vulnerabilities, software updates, and compliance.
Bespoke Packages and Deployment
While there are certain products, such as operating systems, that work for any kind of healthcare business, there is rarely a one-size-fits-all approach that does. Because of this, any new products may need to be tailored for individual clients.
This, of course, takes time and costs money. The cost can be passed to the consumer, but there is a fine line between affordability and practicality. This can add a significant amount to the cost of development within a sector.
Acquiring Audit Certifications
The healthcare sector is full of reliable and trusted services that wish to remain compliant to provide a great service and avoid legal implications. Because of this, your products must be above board with all the relevant audit certifications required.
Large companies within the healthcare sector typically require trusted security certifications such as SOC 2 and HITRUST, or they won’t even consider your product. Of course, maintaining these also costs more money.
Launching Healthcare Tech with Cybersecurity
A report by McKinsey & Company found that there has been a 59% increase in healthcare tech vulnerabilities. Adding robust security features to a healthcare system, such as firmware or software, can add a significant cost of around $150,000 per year, including the following:
- End-to-end encryption makes it almost impossible for data to be intercepted.
- Access controls that prevent unauthorized access to sensitive and private data.
- Ongoing penetration testing that tries to find and fix health product vulnerabilities.
Staff Training and Management
Any kind of technology is only as useful as the person using it. Any business that decides to use your new product must also train the staff to use it effectively. While this seems like an end-user problem, clients are unlikely to consider a product that doesn’t offer comprehensive onboarding and training tools.
One of the biggest issues today is AI-based systems that older generations have a hard time using. This means training costs are passed to you as part of the package.
Summary
Obtaining the necessary regulatory approvals is one of the biggest costs of launching healthcare tech today.
The development of any software APIs is also a major cost, as it requires ongoing development, not least to detect and patch security vulnerabilities. Additionally, it is easy to assume that training and onboarding lie with the client. However, a client will simply pass on a product that doesn’t come with the necessary training and tools staff need.
