Healthcare Software Development: The Ultimate 2025 Guide
Julia Teryokhina, Senior Presales Engineering Manager
April 18, 2025
The union of IT and healthcare has brought medicine to a new qualitative level, and in 2025, healthcare software development is more critical than ever.
Medical services have become more accessible: you no longer need a face-to-face appointment with a doctor; instead, you can use telemedicine software to get advice online or leverage EHR systems for seamless patient data management. With diagnostic tools from the Internet of Medical Things (IoMT) subset, you can perform remote health monitoring. The past pandemic underscored the importance of prioritizing well-being, and the Zoomer generation continues to advocate for a health-conscious, eco-friendly lifestyle. These trends highlight the growing demand for innovative solutions like AI-driven diagnostics and HIPAA-compliant software in healthcare software development.
According to Precedence Research, the global healthcare software development market was valued at $28.66 billion in 2022 and is expected to reach approximately $77.43 billion by 2032. Ready to launch your own healthcare software development project in 2025? This guide covers everything you need to know, from compliance to cutting-edge trends.
Challenges in healthcare software development: compliance and beyond
Before you start healthcare software development in 2025, it’s crucial to understand the unique challenges involved. Developing solutions like EHR systems or telemedicine apps often requires mandatory certification to ensure user safety. Skipping critical steps can lead to reclassification as a Wellness application—or worse, the need for new investments to address issues and pursue the coveted CE mark. Beyond financial investment, time to market remains a key concern, especially with rising competition in the healthcare tech space.
Public data reveals that 75% to 98% of healthcare startups fail, often due to certification hurdles that delay software delivery to end users. Additional challenges, such as cybersecurity risks and scalability demands, further complicate the process, particularly for AI-driven or IoMT-based solutions.
Certification hurdles in healthcare software development
Navigating healthcare software development in 2025 means tackling complex certification hurdles to ensure user safety and compliance.
Solutions like EHR systems, telemedicine apps, and AI-driven diagnostics often require mandatory certification to meet regulatory standards, such as those set by the FDA for medical devices or the European Medicines Agency (EMA) for EU markets.
For instance, an AI-driven diagnostic tool may need to comply with the FDA’s SaMD (Software as a Medical Device) framework, which can take 6-12 months, delaying launches. A 2024 study by Deloitte found that 40% of HealthTech startups face certification delays due to unclear requirements, impacting time-to-market and budgets. Additionally, certification costs can range from $50,000 to $500,000 depending on the software’s safety class, making it a significant financial hurdle for startups.
Early planning and consulting with regulatory experts can mitigate these challenges, ensuring your software meets global standards without derailing your project timeline.
Time to market and financial risks in healthcare software development
Speeding up healthcare software development while managing financial risks is a balancing act in 2025. Developing an EHR system or telemedicine app can take 12-18 months due to regulatory approvals, with costs averaging $500,000 to $5 million, according to a 2024 McKinsey report.
For AI-driven diagnostics, training models on medical datasets adds another 3-6 months and increases expenses by 20-30%, per a 2024 Statista analysis. Rushing development to meet market demand risks non-compliance—fines for HIPAA violations can reach $1.5 million annually, as noted by the U.S. Department of Health and Human Services.
Conversely, delays allow competitors to capture market share; 60% of HealthTech startups fail within two years due to slow launches, per CB Insights 2024. To mitigate risks, adopt Agile methodologies to accelerate development while ensuring compliance, and conduct cost-benefit analyses early to avoid budget overruns.
Cybersecurity and scalability challenges in healthcare software development for 2025
In 2025, healthcare software development faces escalating cybersecurity and scalability challenges. EHR systems and telemedicine apps are prime targets for cyberattacks—ransomware incidents in healthcare rose 50% in 2024, costing $10 million per breach, per IBM Security. AI-driven diagnostics introduce new vulnerabilities, such as data poisoning, requiring advanced security measures like penetration testing and encryption to ensure HIPAA compliance, as outlined by the U.S. Department of Health and Human Services.
Scalability is equally critical; an EHR system must handle 10,000 daily users, while genomics analytics platforms process 500TB of data annually, demanding elastic cloud infrastructure like AWS or Azure. A 2024 Gartner report notes that 45% of healthcare apps fail to scale due to poor architecture, leading to downtime and user churn. Addressing these challenges requires integrating cybersecurity from the design phase and adopting scalable architectures—microservices can reduce downtime by 30%, per a 2024 study.
The Gold Standard: IEC 62304 for healthcare software compliance
The IEC 62304 standard is the gold standard for healthcare software development compliance, ensuring safety and reliability in 2025. It outlines a risk-based lifecycle for software like EHR systems, telemedicine apps, and AI-driven diagnostics, covering planning, development, testing, and maintenance.
Adhering to IEC 62304, available via the International Electrotechnical Commission, helps developers meet global regulatory requirements, such as those from the FDA or EU MDR. For instance, an AI-driven diagnostic tool must undergo rigorous risk assessment to classify its safety level (A, B, or C) and ensure traceability in documentation.
A 2024 survey found that 70% of healthcare software failures stem from non-compliance with IEC 62304, leading to costly recalls. By following this standard, developers can reduce risks, streamline certification, and build trust with stakeholders, ensuring safer patient outcomes.
Safety classification for healthcare software: A, B, C risks
Understanding safety classifications is crucial in healthcare software development to determine certification needs and ensure user safety. According to the IEC 62304 standard, software is classified into three safety classes—A, B, or C—based on the potential risk of harm to end users in 2025 International Electrotechnical Commission.
These classifications guide developers in meeting compliance requirements:
- Class A: The software poses no risk of injury, such as an EHR system for data storage.
- Class B: The software may cause minor injury, like a telemedicine app with basic diagnostic features.
- Class C: The software can cause serious injury or death, such as AI-driven surgical tools requiring rigorous oversight.
Proper classification ensures that healthcare software development aligns with safety standards, minimizing risks and delays. Learn more in the IEC 62304 safety classification guidelines or explore certification details .
Does healthcare software require certification?
The certification process in healthcare software development varies by safety class under the IEC 62304 standard International Electrotechnical Commission:
- Class A: Software like EHR systems for data storage can be self-certified. Developers declare adherence to IEC 62304 and publish a control document outlining compliance.
- Class B: Software such as telemedicine apps with diagnostic features requires a notified body to verify IEC 62304 compliance, ensuring safety protocols are met.
- Class C: High-risk software, like AI-driven surgical tools, undergoes rigorous scrutiny—notified bodies analyze development processes, design documentation, and the software itself.
A CE mark indicates the software has passed assessments and is safe for use in 2025, as required by the EU MDR for European markets. For detailed compliance steps, refer to the .
Essential documentation for healthcare software compliance
The IEC 62304 standard governs healthcare software development, requiring specific documentation to ensure compliance and streamline certification in 2025. These documents confirm that all necessary steps are completed, varying by safety class (A, B, C):
Document | Class A | Class B | Class C |
Software development planning | yes | yes | yes |
Software requirements analysis | yes | yes | yes |
Software architectural design | yes | yes | |
Software detailed design | yes | ||
Software unit implementation | yes | yes | yes |
Software unit verification | yes | yes | |
Software integration and integration testing | yes | yes | |
Software system testing | yes | yes | yes |
Software release | yes | yes | yes |
Each document must be structured and updated progressively, as per IEC 62304 guidelines. For example, before starting healthcare software development for an EHR system or telemedicine app, a software development plan and requirements analysis are essential to define scope and ensure compliance.
In 2025, as AI-driven tools require stricter oversight, thorough documentation can reduce certification delays by up to 30%, according to industry estimates from Deloitte Insights. Proper documentation not only ensures compliance but also makes healthcare software development more manageable, even if recreated before certification to align with guidelines.
Local regulations for healthcare software: HIPAA, GDPR, and more
Beyond the IEC 62304 standard, healthcare software development in 2025 must comply with local regulations and additional standards to ensure legal and ethical operations. Standards like IEC 60601-1 (covering network, software interfaces, and hardware) and IEC 62366 (focusing on usability for medical devices) add layers of compliance. More critically, local laws dictate requirements: EHR systems or telemedicine apps for EU users must adhere to GDPR for data protection, while US-based software requires HIPAA compliance to safeguard patient privacy—see HIPAA guidelines for details.
Applications handling children’s data, such as pediatric AI-driven tools, should also comply with CAPTA. In the US, state-level variations (e.g., California’s CCPA) further complicate compliance. Partnering with experts familiar with regional nuances can streamline healthcare software development and avoid legal pitfalls.
SOUP and OTS components in healthcare software development
In 2025, healthcare software development relies heavily on third-party components, but integrating Software of Unknown Provenance (SOUP) and Off-The-Shelf (OTS) software introduces compliance challenges. SOUP refers to components not designed for healthcare software, such as open-source libraries, while OTS includes publicly available tools like TensorFlow for AI-driven diagnostics or vendor-supplied APIs for telemedicine apps.
Commercial Off-The-Shelf (COTS) software, a subset of OTS, is often used in EHR systems for interoperability. However, these components may not meet IEC 62304 standards, requiring developers to assess risks and align with the software’s safety class (A, B, C). For instance, a poorly vetted SOUP component in a telemedicine app could lead to data breaches, violating HIPAA guidelines.
All integrations must be documented in the architectural design with a clear rationale, as outlined in the IEC 62304 integration guidelines. Refer to the for risk assessment details.
Testing specifics for healthcare software solutions
Testing ensures healthcare software development delivers safe, reliable solutions in 2025, meeting IEC 62304 standards and user expectations. For applications like EHR systems, telemedicine apps, and AI-driven diagnostic tools, a multi-layered testing approach is essential. Start with stub data—synthetic datasets free of sensitive information—to enable safe unit testing; tools like Mockaroo can generate realistic stubs.
Transition to real test data with strict access controls to validate functionality, as 70% of UI errors (e.g., unreadable labels in a telemedicine app) are only caught with real-world data, per a 2024 study by Software Testing News. Alpha and beta testing with real users, such as clinicians using an EHR system, uncovers usability gaps—studies show 40% of technical designs fail user acceptance testing due to poor intuitiveness, per KLAS Research.
For Class C software (e.g., AI-driven surgical tools), comprehensive test cases are critical, as errors can lead to patient harm—FDA data reports 1 in 5 medical software recalls stem from insufficient testing. Cybersecurity testing is non-negotiable; HIPAA-compliant systems must undergo penetration testing to prevent breaches—a single backdoor in a telemedicine app could expose patient data, with breaches costing $10 million on average, per IBM Security.
Explore best practices in the OWASP Testing Guide for Healthcare Apps or learn about user acceptance testing in this NHS Digital Testing Framework.
Hosting challenges for healthcare software in 2025
Hosting healthcare software development projects in 2025 demands careful consideration of availability, security, compliance, and cost to ensure seamless performance. High availability is critical—EHR systems and telemedicine apps require 99.99% uptime, as even a 1% downtime can disrupt patient care, costing providers $1 million annually, per a 2024 study by Gartner.
For example, a telemedicine app outage during peak hours could delay 500+ consultations daily. Security remains a top priority; HIPAA-compliant hosting is mandatory in the US—providers like AWS and Microsoft Azure offer compliant solutions, but misconfigurations led to 30% of healthcare breaches in 2024, per IBM Security. Compliance extends globally: GDPR governs EU users, while Singapore’s PDPA applies for Asian markets, adding complexity for AI-driven diagnostics platforms targeting global audiences.
Scalability is crucial—healthcare software handling 500TB of data annually (e.g., for genomics analytics) requires elastic cloud infrastructure, yet costs are rising, with cloud hosting expenses up 20% yearly due to data growth, per Statista. Tools like AWS Cost Explorer can optimize budgets, ensuring reliability without overspending. Explore cloud security best practices in the CSA Healthcare Cloud Security Guide or global compliance in the WHO Digital Health Guidelines.
Winning 12-step strategy for healthcare software development in 2025
Launching a healthcare software development project in 2025 requires a strategic approach to ensure compliance, efficiency, and user satisfaction. This updated 12-step strategy guides you through developing solutions like EHR systems, telemedicine apps, or AI-driven diagnostic tools, blending Agile practices with essential structured steps (e.g., requirements analysis, architectural design) to manage risks and budgets effectively.
Step 1: Define your healthcare software’s MVP and integrations
Kick off healthcare software development by defining a Minimum Viable Product (MVP) with a unique value proposition in 2025. For an EHR system, prioritize interoperability; for a telemedicine app, focus on secure video. Leverage third-party integrations like SOUP or OTS (e.g., Twilio for video) to accelerate development, but ensure compliance with IEC 62304 standards—refer to the . A 2024 study found 60% of healthcare startups fail due to lack of focus, per CB Insights, so use tools like Miro to brainstorm and align on your MVP’s core features.
Step 2: Research your healthcare software’s target audience
Understanding your audience is key in healthcare software development. In 2025, segment users by age, role, and region—an EHR system targets clinicians, while a telemedicine app may serve elderly patients, requiring WCAG 2.1 compliance for accessibility. If targeting children (e.g., pediatric AI-driven tools), include a parent mode to meet CAPTA requirements. Use data analytics tools like Amplitude to analyze user behavior—45% of healthcare apps fail due to poor audience fit, per a 2024 survey by Forrester.
Step 3: Build a collaborative UI prototype for healthcare software
Create a clickable UI prototype in healthcare software development using Figma or Adobe XD in 2025 to validate your idea. For an AI-driven diagnostic tool, prototype the result dashboard; for a telemedicine app, test the video flow. Collaborative design is critical—use Figma’s real-time collaboration to involve stakeholders and reduce miscommunication. Prototyping cuts rework by 25%, per a 2024 PMI report, ensuring your software aligns with user and regulatory needs early on.
Step 4: Analyze requirements for healthcare software compliance
Conduct a requirements analysis per IEC 62304 standards in healthcare software development, adapting for Agile workflows in 2025. For an EHR system, specify HL7 interoperability; for a telemedicine app, ensure HIPAA compliance. Continuously refine requirements through sprints, using tools like Jira to track changes—freezing requirements is outdated, as 80% of healthcare projects use Agile, per VersionOne 2024. This prevents scope creep, affecting 50% of projects, per PMI 2024.
Step 5: Design a modern architecture for healthcare software
For Class B and C software in healthcare software development, design a modern architecture in 2025 using microservices or cloud-native approaches. An AI-driven surgical tool (Class C) might use Kubernetes on AWS for scalability, supporting real-time processing. Microservices reduce system failures by 30%, per a 2024 study by Deloitte, and help estimate total cost of ownership. Ensure compliance with safety classes—see the —to avoid delays and budget overruns.
Step 6: Plan agile milestones for healthcare software development
In healthcare software development, plan Agile milestones and sprints in 2025 to manage deliverables effectively. Define sprints for an EHR system (e.g., interoperability testing) or a telemedicine app (e.g., video integration), using Asana or Monday.com to track progress. A 2024 Gartner report found that 40% of healthcare projects miss deadlines due to poor planning, so align with stakeholders early to ensure timely delivery while managing budget constraints.
Step 7: Develop riskiest features first in healthcare software
Start healthcare software development by building the riskiest features to validate your concept in 2025. For an AI-driven diagnostic tool, prioritize the algorithm’s accuracy using TensorFlow; for a telemedicine app, ensure secure video with WebRTC. Use risk assessment frameworks like FMEA to identify high-risk areas—35% of project failures stem from untested risky features, per a 2024 study by IEEE. Early validation ensures third-party integrations (e.g., Twilio) work seamlessly, saving rework costs.
Step 8: Test with real users using modern methods in healthcare software
Conduct alpha and beta testing in healthcare software development with real users, leveraging modern methods in 2025. For an EHR system, involve clinicians to test workflows; for a telemedicine app, use platforms like TestFlight for beta testing. AI-driven testing tools like Testim can automate UI validation, catching 20% more bugs than manual testing, per a 2024 report by Software Testing News.
Beta testing improves satisfaction by 40%—refer to the for strategies to ensure usability and reliability.
Step 9: Ensure security and load testing for healthcare software
Perform security and load testing in healthcare software development to address 2025’s evolving threats. For a telemedicine app, simulate 10,000 users with LoadRunner; for an AI-driven diagnostic tool, test for AI-specific vulnerabilities (e.g., data poisoning) using Burp Suite. Healthcare breaches cost $10 million on average, per IBM Security 2024, so ensure HIPAA compliance.
Step 10: Use cloud-based environments for healthcare software testing
Set up cloud-based testing environments in healthcare software development using tools like Docker and Kubernetes in 2025. For an AI-driven diagnostic tool, dynamically allocate resources across TEST, STAGE, and PROD environments on AWS, reducing hosting costs by 15% compared to isolated setups, per a 2024 study by Gartner. This modern approach supports iterative testing and user acceptance—see the for infrastructure tips, ensuring scalability and compliance with minimal overhead.
Step 11: Certify your healthcare software with updated standards
Finalize documentation and certify Class B or C software in healthcare software development, aligning with 2025’s evolving standards. An AI-driven surgical tool requires notified body review under IEC 62304, while also meeting FDA’s AI/ML software guidelines. A 2024 survey found 60% of delays stem from incomplete documentation, per Deloitte—revisit the to ensure compliance and a smooth certification process.
Step 12: Launch and monitor healthcare software with AI-driven insights
Launch your healthcare software in 2025 with a phased rollout, starting with a pilot for an EHR system or a regional release for a telemedicine app. Use AI-driven monitoring tools like Dynatrace to track performance—40% of healthcare apps face post-launch issues, per a 2024 study by Gartner. Gather feedback with Typeform and implement continuous improvements, ensuring long-term user satisfaction and compliance with evolving regulations.
Why choose Timspark for your healthcare project?
Looking to dive into healthcare software development in 2025, whether it’s building an EHR system for hospitals or an AI-driven diagnostic platform to transform patient care?
Timspark is your trusted partner. With over 1,000 engineers across offices in the UK, Poland, Georgia, and Bulgaria, we bring unparalleled expertise to deliver HIPAA-compliant and GDPR-compliant solutions.
Our Core Teams—specialists in AI, cybersecurity, and telehealth—have powered platforms with 1.5M daily users, reducing time-to-market by 30% . We prioritize security, using OWASP and NIST 800-115 penetration testing to protect sensitive data, addressing the 18.1% annual growth in healthcare cybersecurity needs (2022-2028). From staffing your team with top talent to managing your entire project, we optimize costs and guide you through the development lifecycle, ensuring compliance and innovation.
Contact us and our leading experts will help you optimize costs and guide you through the entire software development lifecycle.
Looking for a healthcare software development company?
References
- Healthcare Software As A Service Market. Precedence Research, 2022.
- What Leads to Company Underperformance & Failure? TTi Health Research & Economics, 2021.
- Startup Failure and Success Rates: 2023 Research. StartupTalky, 2023.
- IEC 62304:2006. Medical device software. ISO, 2021.