Security and privacy considerations for building a healthcare app

Drawing on our experience delivering healthcare software over the past two decades, this article explores how founders can approach privacy and security as part of building a trusted, commercially viable healthcare product.

Disclaimer: This article reflects Wave Digital's experience designing and developing healthcare software. It is not legal advice. Founders should seek appropriate legal, privacy and security advice relevant to their specific circumstances.

Trust sits at the centre of successful healthcare products.

Patients trust that their information will be handled appropriately. Clinicians trust that systems will support safe and effective care. Healthcare organisations trust that technology partners understand the responsibilities that come with managing sensitive information.

Privacy and security play a significant role in earning and maintaining that trust.

For healthcare founders, however, these topics can be difficult to navigate. Legal obligations, technical controls, customer expectations and commercial realities do not always align neatly. Decisions that appear straightforward often involve trade-offs between risk, usability, cost and speed to market.

Privacy and security begin as product decisions

When people discuss healthcare technology, privacy and security are often framed as technical concerns.

In our experience, some of the most important decisions are made much earlier.

Before selecting a technology stack, implementing encryption or commissioning security reviews, founders are making choices about what information their product collects, how it flows through the system and why it is needed in the first place.

These decisions influence everything that follows.

A common consideration is whether certain information needs to be collected at all. Another is whether identifiable information can be separated from operational data, anonymised or processed locally on a user's device rather than transmitted elsewhere.

These are product design decisions as much as privacy decisions.

For founders building healthcare solutions, privacy and security are often strongest when they are considered as part of the overall system architecture rather than layered onto a completed product.

Understanding the distinction between privacy and security

An important distinction is the difference between privacy and security.

The terms are frequently used together, but they address different concerns.

Privacy relates to how information is collected, used, disclosed and retained. It concerns questions such as:

• What information is being collected?
• Why is it being collected?
• Who can access it?
• How long should it be retained?
• What have users consented to?

Security relates to protecting information from unauthorised access, misuse, loss or disclosure. It encompasses the technical and operational measures used to safeguard systems and data.

This distinction becomes increasingly important as products mature.

A platform may implement strong technical security controls while still creating privacy challenges if it collects more information than necessary or uses that information in unexpected ways. Equally, a carefully drafted privacy policy provides little protection if the underlying systems are insecure.

Founders who understand both dimensions are often better equipped to make informed decisions as their products evolve.

What Australian law requires – and what it does not

Healthcare founders are often conscious that health information attracts a higher level of scrutiny than many other forms of personal information.

In Australia, organisations handling health information are typically subject to obligations under the Privacy Act 1988 (Cth) and the Australian Privacy Principles.

These obligations establish important requirements around consent, transparency, access, correction, retention and the protection of personal information.

The question often becomes: what does compliance look like in practice?

An important observation is that Australian privacy legislation is generally principles-based rather than prescriptive. The legislation requires organisations to take reasonable steps to protect personal information, but it does not prescribe an exhaustive list of technical controls that must be implemented in every circumstance.

As a result, founders are often navigating two separate considerations.

The first is legal compliance.

The second is determining what constitutes appropriate security for the nature of the product, the sensitivity of the information involved and the expectations of prospective customers.

This is where context becomes important.

A founder validating an early-stage concept may face very different risks and expectations from a company preparing to deploy a platform across a network of hospitals or government health services.

Security is increasingly influencing commercial outcomes

As organisations mature, privacy and security discussions often extend beyond compliance.

They become commercial considerations.

Healthcare organisations are investing significant resources into managing cyber security and privacy risks. Procurement teams, IT departments and governance committees are under pressure to understand how technology vendors handle sensitive information.

As a result, founders are increasingly asked detailed questions about:

• where data is hosted
• how information is encrypted
• user authentication methods
• access controls and permissions
• audit logging
• incident response processes
• third-party service providers.

What we frequently see is that these conversations emerge well before a contract is signed.

For founders seeking to work with hospitals, government agencies, insurers or large healthcare providers, the ability to answer these questions confidently can influence procurement outcomes.

What we frequently see is that privacy and security considerations become part of the founder's credibility story.

Healthcare startups are often asking prospective customers to trust a relatively young organisation with sensitive information. In that environment, confidence matters. Founders who can clearly explain their approach to data hosting, access controls, authentication and privacy obligations tend to navigate stakeholder conversations more effectively than those encountering these questions for the first time.

Early architectural decisions can create value beyond risk reduction. They can help demonstrate organisational maturity, support procurement discussions and remove friction from customer acquisition conversations.

This is one area where experience matters.

Over the years, we've supported clients through a wide range of security reviews and vendor assessments. While requirements vary between organisations, the underlying objective is usually consistent: assessing whether the product and the company behind it can be trusted.

That trust is built through both technical decisions and organisational maturity.

A practical approach to security at the startup stage

Founders operating at the startup stage face a challenge that larger organisations do not.

Resources are finite.

Investment in security competes with investment in product development, customer acquisition, regulatory pathways and clinical validation.

The challenge for founders is determining where to invest early and where additional controls can be introduced later as the risk profile evolves.

In our experience, a strong foundation typically includes:

• secure application architecture
• encryption of sensitive information
• robust authentication controls
• separation of development, testing and production environments
• appropriate access controls
• audit logging
• regular maintenance and security updates.

These are generally considered sound software engineering practices regardless of industry.

Beyond this baseline, the appropriate level of investment often depends on the intended customers, the sensitivity of the information being handled and the consequences of a potential security incident.

The objective is not necessarily to implement every possible control from day one. It’s to make informed decisions about risk and to revisit those decisions as circumstances change.

Data minimisation remains one of the most effective risk management strategies

Healthcare founders are often focused on how to protect information once it enters a system.

An equally important question is whether the information needs to enter the system at all.

Data minimisation has long been recognised as a core privacy principle, but it also offers practical commercial benefits.

Collecting less information can reduce risk, simplify compliance obligations and lower implementation complexity.

In some situations, it may be possible to process information on a device without transmitting it elsewhere. In others, information may only need to be retained temporarily before being deleted or de-identified.

These design decisions can have a meaningful impact on the overall security posture of a product.

They can also allow founders to validate core assumptions and prove commercial demand before investing in more complex infrastructure and governance frameworks.

Security is not a one-time exercise

As healthcare businesses grow, their risk profile changes.

New customers introduce new requirements. Additional users increase exposure. Product functionality expands. Regulatory expectations evolve.

What was appropriate at one stage of growth may no longer be sufficient several years later.

This is why mature healthcare organisations view privacy and security as ongoing disciplines rather than project milestones.

Independent security reviews, penetration testing, infrastructure hardening, policy development and governance reviews are often introduced progressively as products mature and customer expectations increase.

Maintenance also plays an important role.

Security controls that are effective today require ongoing attention. Software dependencies change. Vulnerabilities emerge. Platforms evolve.

Maintaining a secure healthcare product requires continuous stewardship rather than periodic intervention.

Building trust through thoughtful decisions

Healthcare founders are motivated by a desire to improve systems, reduce inefficiencies and create better experiences for patients and clinicians.

Privacy and security should support those ambitions.

The strongest healthcare products are rarely defined by the number of controls they implement. They are defined by the quality of the decisions that sit behind them.

Those decisions begin with understanding what information is truly required, how risks can be reduced through thoughtful design and how trust can be maintained as the organisation grows.

In our experience, founders who approach privacy and security in this way are often better positioned to navigate procurement processes, establish credibility with stakeholders and build products capable of long-term adoption.

At Wave Digital, we've worked alongside healthcare innovators developing solutions across chronic disease management, healthcare logistics, workforce coordination and patient engagement. Our role is not to replace legal advisors or specialist security consultants. It is to help founders make informed product, technology and architectural decisions that support both compliance and commercial success.

Because in healthcare, trust is not built through a single feature or policy.

It is built through a series of deliberate decisions made over time.

Navigating privacy and security in a healthcare product?

Whether you're validating an early concept or preparing for procurement conversations with healthcare organisations, privacy and security decisions can have lasting implications for product design, adoption and growth.

If you'd like to discuss the considerations specific to your product, we'd be happy to share our perspective based on more than 20 years of delivering healthcare software.

Book a discovery call with the Wave Digital team.