Healthtech MVP costs are consistently 40-60% higher than equivalent non-regulated applications. Most founders don't discover this until they're deep into development, budget depleted, with critical compliance work still ahead.
The gap comes from three sources: compliance infrastructure, specialized vendors, and extended timelines. Each adds costs that don't exist in consumer apps or enterprise SaaS. Understanding these costs upfront lets you plan realistically and avoid the funding gap that kills promising healthtech startups.
The Core Cost Categories
Category 1 - Core Application Development: $15,000-$50,000. This is comparable to non-healthtech applications.
Category 2 - HIPAA Compliance Infrastructure: $5,000-$15,000 additional for compliant infrastructure setup, audit logging, access control architecture, encryption, and security testing.
Category 3 - Specialized Vendor Costs: $3,000-$15,000 annual overhead. HIPAA-compliant vendors charge more - cloud hosting 2-5x, auth providers $100-500/mo, video for telehealth $200-1000/mo.
Category 4 - Professional Services: $8,000-$25,000. Healthcare attorney ($3,000-$10,000), security consultant ($2,000-$5,000), HIPAA consultant ($3,000-$8,000).
Category 5 - Extended Timeline Costs: A typical 8-week MVP becomes 10-14 weeks with compliance. At $20,000/month burn rate, 6 additional weeks costs $30,000.
Category 6 - Post-Launch Compliance: $7,000-$23,000 annually for security monitoring, assessments, policy updates, and documentation maintenance.
The Total Picture
Total Pre-Launch: $46,000-$145,000 (low to high end). Compare to a typical non-regulated MVP at $15,000-$50,000. Healthtech costs 2-3x more, with meaningful ongoing compliance overhead.
Where Founders Typically Underestimate
BAA Vendor Tiers: Many require enterprise tiers, creating painful unit economics at early-stage volumes. Security Testing: Penetration testing costs $3,000-$20,000 plus remediation. Legal Complexity: Healthcare legal work often reaches $10,000+ versus expected $1,500. Documentation Time: 40 hours at $150/hour is $6,000 often unbudgeted.
Compliance-First vs. Retrofit
A $40,000 MVP built without compliance might require $60,000-$120,000 to retrofit. The math heavily favors compliance-first development.
How to Budget Realistically
- Define Minimum Viable Compliance first - clarify what you actually need
- Get vendor quotes early - don't estimate based on standard pricing pages
- Include professional services from day one - minimum $13,000 budget
- Add 25% contingency - unexpected costs are normal in regulated development
- Plan 18 months of runway - healthtech sales cycles are long
Key Takeaways
HIPAA infrastructure adds 20-30% to development costs. HIPAA-compliant vendors cost 2-4x more at MVP scale. Professional services add $8,000-$25,000 minimum. Extended timelines cost real money. Ongoing compliance costs $7,000-$23,000 annually.
Budget 2-3x what you'd budget for a non-regulated application. Add 25% contingency. Plan for 18 months of runway before revenue. The founders who succeed are the ones who understand these costs before they start building.
At NextBuild, we provide transparent cost estimates for healthtech MVPs before development begins. If you're planning a healthtech product and want an honest assessment, let's talk through your project.
