The interest in leveraging the value of big data in digital health has become a focus of health care industry mainstays and newcomers alike. Within a challenging regulatory landscape, it is critical for those looking to play in this space to be proactive in planning their data strategy, with an eye towards compliance planning and solid due diligence to maximize its value. In this Q&A, big data thought leaders Bernadette Broccolo and Sarah Hogan, both partners in McDermott Will & Emery’s Health Industry Advisory group, discuss the challenges and opportunities that health industry stakeholders face when stepping into the world of big data.

For information on this topic and to hear the full Q&A with Bernadette and Sarah, listen to the newest episode of the Of Digital Interest podcast. You can access the full episode at here or subscribe to the podcast on iTunesPocket Casts or Soundcloud.

Q. Where is the value in big data in digital health? Who is seeing value today and what are their motivations?

BB: The best short answer is that everybody is seeing value – both long standing industry players and newcomers. The real value in big data comes not from raw data or just having a lot of data, but in the ability to use it and mine it, to have it in a form that’s analyzable. What’s very surprising too, in addition to the speed with which the interest in big data has escalated, is who is interested. In the past, one certainly expected academic medical centers and universities that have major research initiatives and clinical trial initiatives to be interested. But now others like molecular lab testing organizations, CLIA regulated laboratories and entrepreneurs are interested in capturing data.

SH: I think one of the surprising players is actually the pharma companies. It may sound odd to say that, but they have a lot of data – including a lot of clinical data – that they’re looking at mining to determine how they can target their therapeutics in a way that helps patients more efficiently. They are looking at themselves and asking “What does the 21st century pharma company look like?” Continue Reading Maximizing the Value of Big Data in Digital Health

As the health industry evolves to meet consumer expectations for better quality, lower-cost and more convenient health care options, the demand for technology-driven innovation is accelerating as is the level of interest and investment among stakeholders or all sorts.

Health systems and other institutional providers are playing a more active investment role in the commercialization of biomedical, digital health, and other important health care discoveries in order to remain competitive, secure their positions as industry leaders and generate growth opportunities. This more active role also affords their internal innovators (e.g., physicians and scientists) to play a meaningful role in accelerating the commercialization of home-grown discoveries that may otherwise be left in “the valley of death” between government-funded basic research and later stage, industry-funded commercialization. Drug and medical device manufacturers, venture capital, private equity firms, large donors and other investors are injecting significant capital into fueling research, development and commercialization of health care technology innovation. On the one hand, health care systems and providers welcome such external co-investors who bring sophisticated expertise in product and market research, technology innovation, valuation and strategy capabilities, as well as access to networks of potential co-investors. For such external co-investors, on the other hand, joining forces with health care institutions affords much needed access to the expertise and thought leadership of clinicians, scientists and health technology innovation; a ready‑made proving ground and “anchor customer” for the product; and the halo effect of the health care provider around the co-investor’s clinical care and research reputation. The theory and the hope is that the combined capital and the different, but complementary, expertise, experience and perspectives of such co‑investors provides a formula for financially successful innovation that is transformative and not merely disruptive. Continue Reading Blazing New Trails in Health Care and Technology Innovation Ventures

Join McDermott next Wednesday for a live webinar on the unique considerations in developing and procuring AI solutions for digital health applications from the perspective of various stakeholders. We will discuss the legal issues and strategies surrounding:

  • Research and data mapping essential to the development and validation of AI technologies
  • Protecting and maintaining intellectual property rights in AI solutions
  • Technology development
  • Risk management and mitigation for various contractual arrangements, including contracts with customers, vendors and users

We will also focus on the trends in US law for AI solutions in the digital health space, and present actionable advice that will help you develop an effective strategy for developing and procuring AI solutions for digital health applications.

Developing and Procuring Digital Health AI Solutions: Advice for Developers, Purchasers and Vendors
Wednesday, June 13, 2018 | 11:00 am CT | 12:00 pm ET
Register Here

 

Fortune’s April 2018 cover story, “Tech’s Next Big Wave: Big Data Meets Biology,” conveys loudly and clearly that technological innovation is transforming the health care continuum—changing the way care is delivered, as well as how patients manage their ongoing health—and as patient demand for health innovation increases, more companies seem eager to hop on the digital health bandwagon. The article provides a thoughtful, realistic (and somewhat sobering) perspective on digital health innovation’s successes and other results to date. It also quite effectively uses real world stories to convey the human dimension of digital health. One is the story of a mother who manually sampled and recorded her son’s glucose levels 20 times a day before an automated monitoring system connected to a mobile app allowed them both to live their lives without constant interruption by this critical care management function. Another describes use of an artificial intelligence “command center” to expedite access to life-saving surgery by a man with an aortic dissection. These real-world examples drive home the fact that digital health is already making a profound difference in our lives by removing barriers to care that are critical to saving lives and managing chronic diseases.

What the article does not touch on, however, are the myriad, complex legal challenges that must be addressed at the earliest stages of the planning process and the intensifying interest of government oversight and enforcement bodies, such as the Federal Trade Commission, the Food and Drug Administration, the Office of Civil Rights of the Department of Health and Human Services, and the Securities and Exchange Commission, interested in protecting the safety and privacy of patients and consumers. Just last month, we saw the SEC charge Theranos’ CEO Elizabeth Holmes with fraud for allegedly misleading investors about the company’s ability to detect health conditions from a small sample of blood. Earlier this year, another “unicorn” start-up, Outcome Health, settled with the federal government after The Wall Street Journal reported that they allegedly misled advertisers with manipulated information. The United States has also brought claims against the private equity company investor of a compounding pharmacy that allegedly paid illegal kickbacks to marketing firms to induce prescriptions written by telemedicine providers for costly compounded drugs reimbursed by TRICARE.

Opportunities and Challenges of the Patient Data “Gold Rush”

Eric Topol, MD, director at the Scripps Research Institute, told Fortune that “the quest to retrieve, analyze and leverage” data “has become the new gold rush. And a vanguard of tech titans—not to mention a bevy of hot startups—are on the hunt for it.” There is no doubt that harnessing and analyzing big data provide virtually limitless fuel for digital health innovation of the type patients and consumers are demanding and that tech companies are eager to develop and commercialize. While optimism about the quest for big data is certainly justified, it must be tempered by caution and careful consideration of complex, multi-dimensional legal and regulatory requirements that can shape the strategy for the exchange, use and exploitation of identifiable personal health data and other personal data.  As innovation continues to move in many directions and at light speed, it can be easy to get wrapped up in the excitement, but it’s worth taking a step back to take a look at the legal implications of doing so.

There are many current laws protecting patient data privacy, confidentiality and security that limit the type and extent of data-sharing that patients and digital health technology innovators demand. For instance, some state and federal privacy laws that protect particularly sensitive information (e.g., information concerning HIV/AIDS, mental health, substance abuse, and genetic testing and counseling) are more restrictive than the Health Insurance Portability and Accountability Act (HIPAA) and may require express written patient consent for uses and disclosures that HIPAA would permit without consent, and the Genetic Information Nondiscrimination Act of 2008 also limits access to genetic information by group health plans, health insurers and issuers of Medigap policies.

Prioritizing Comprehensive Compliance Programs

While the Fortune article states that transformative technologies are putting consumers “in the driver’s seat,” there are still legal barriers that are currently keeping them in the passenger seat. To that end, and at the earliest stage of the research and development life cycle, companies must thoroughly think through key compliance considerations such as the nature and frequency of necessary patient and consumer consents, how they will substantiate claims they make in marketing and selling a product, what pre‑market regulatory approvals they need to obtain and how they will support the application for such approvals, to name just a few. A comprehensive corporate compliance program that incorporates the essential elements identified by the Office of the Inspector General can help companies identify, address and manage regulatory and compliance challenges before they become a serious problem that will threaten the success of the digital health initiative and expose them to government enforcement actions and third party lawsuits.

To learn more about the legal barriers that exist in the digital health space, as well as the need for and value of a proper and thorough compliance program, read “The Law of Digital Health,” written by members of the McDermott Will & Emery Digital Health Team. Be sure to also stay up to speed on all of the regulatory challenges and growth opportunities in health care technology today by bookmarking our “Of Digital Interest” blog.

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What if you didn’t have to take time out of your day to see a physician in person when you needed a prescription? What if a diagnosis could be delivered over video chat? What if your psychiatrist was available at the press of a button or swipe on your screen?

These options are fast becoming a reality, as telehealth (or telemedicine) continues to take hold in a health care system that is desperate for increased efficiency and higher quality outcomes. And while telehealth offers exciting new possibilities in terms of convenience and access for patients, it also poses new regulatory challenges for industry stakeholders still learning the new rules of the game in today’s digital health ecosystem.

The Chronic Care Act

One of the biggest drivers of change in the industry right now is the Chronic Care Act. Last month, as part of the House and Senate budget deal to fund the government through March 23, legislators included the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017, which will increase reimbursement for a lot of different telemedicine programs.

For example, if you went to a rural hospital and they didn’t have a stroke neurologist and you were having a stroke, you would have an ED doctor with no stroke specialty diagnosing you—not an ideal situation. With telemedicine, it’s now possible for rural doctors to consult with specialty doctors at renowned sites, which the government will fund thanks to the Chronic Care Act. Continue Reading Telehealth and the Changing Regulatory Landscape: Opportunities and Challenges in the Digital Health Ecosystem

Stephen Bernstein, global chair of McDermott’s Health Industry Advisory Practice Group, sat down with This Week in Health Innovation at the J.P. Morgan Healthcare Conference in San Francisco.

Stephen and Dr. Andre Berger, CEO of National ACO, discussed the role of advancing technologies in enhancing collaboration between key players in digital health—including doctors, heath plans, investors, and consumers and patients—and how digital health is necessary for improving care delivery and managing costs.

Listen to the full podcast.

Disruption of traditional health care is inevitable and poses a central challenge for health care governance. While the size and complexity of the health care industry have slowed the process of business disruption, its high costs and lack of convenience make it highly vulnerable to innovative, nontraditional competitors.

To make sure boards are well-prepared to address this challenge, McDermott Will & Emery and Kaufman Hall have partnered on a new thought leadership series designed to help you identify the signs of disruption, learn how to prepare your organization, and understand the implications for health care governance.

Get critical insights on how to spot, prepare for and manage disruption in your organization now:

  • Listen to Surviving Disruption Podcast, Episode 1: The Signs of Disruption.
  • Download Is Your Organization Disruption Ready? Questions to Assess Preparedness.
  • View our Top 5 Business Disruption Considerations for Corporate Governance infographic.
  • Watch our Behind the Scenes: The Making of the Surviving Disruption Podcast Series video.

Subscribe to the Surviving Disruption podcast on iTunesSoundCloud and Pocket Casts, and keep an eye on the Resource Center for Episode 2: The Path Through Disruption and Episode 3: A Governance Foundation, being released on December 27 and January 10.

On August 3, 2016, the Federal Trade Commission (FTC) staff submitted public comments regarding the Delaware Board of Occupational Therapy Practice’s proposed regulation for the provision of occupational therapy services via telehealth in Delaware (the Proposed Regulation).  The FTC’s comments to the Proposed Regulation follow its comments to Alaska’s telehealth legislation earlier this year and evidence its continued focus on telehealth’s ability to foster flexibility in health care delivery by increasing practitioner supply; encouraging competition; and improving access to affordable, quality health care.

By way of background, in 2015, Delaware amended its Insurance and Professions and Occupations Code (the Code) to include the regulation of telehealth and telemedicine services, including the delivery of occupational care remotely under existing, in-person standards of care.  Consistent with the Code, the Delaware Board of Occupational Therapy Practice (the Board) revised its rules and regulations to address telehealth services.  The Proposed Regulation defines telehealth as “the use of electronic communications to provide and deliver a host of health-related information and health care services, including occupational therapy related information and services, over electronic devices. Telehealth encompasses a variety of occupational therapy promotion activities, including consultation, education, reminders, interventions, and monitoring of interventions.”

The Proposed Regulation gives Occupational Therapist and Occupational Therapist Assistant licensees’ (Licensees) discretion in assessing and determining the appropriate level and type of care for an individual patient, provided that certain requirements are satisfied. Specifically, under the Proposed Regulation, Licensees that provide treatment through telehealth must have an active Delaware license in good standing to practice telehealth in the state of Delaware.  In addition to obtaining informed consent and complying with confidentiality requirements, the licensee must also: (1) be responsible for determining and documenting that telehealth is an appropriate level of care for the patient; (2) comply with the Board’s rules and regulations and all current standards of care requirements applicable to onsite care; (3) limit the practice of telehealth to the area of competence in which proficiency has been gained through education, training and experience; (4) determine the need for the physical presence of an occupational therapy practitioner during any interactions with patients, if he/she is the Occupational Therapist who screens, evaluates, writes or implements the plan of care; (5) determine the amount and level of supervision needed during the telehealth encounter; and (6) document in the file or record which services were provided remotely. (24 Del. Admin. Code § 2000-4.2.)

Staff of the FTC’s Office of Policy Planning and its Bureaus of Competition and Economics, responding to the Board’s request for public comments, stated that by not imposing rigid and unwarranted in-person care and supervision requirements, the Proposed Regulation could have various positive impacts, including: (1) improving access to cost-effective, quality care, especially for patients with limited mobility; (2) reducing Medicaid’s transportation expenditures as well as individuals’ pecuniary and time costs; (3) addressing anticipated workforce shortages in the health care sector by increasing practitioner supply and facilitating care of an aging population; and (4) enhancing competition, consumer choice and access to care.

The FTC did recommend the clarification of the Proposed Regulation on the scope of practice of Occupational Therapist Assistants.  The determination of the appropriateness of remote care and decisions about the amount and level of supervision during a telehealth encounter are expressly restricted to Occupational Therapists, while all other requirements also apply to Occupational Therapist Assistants.  The FTC noted that the ambiguities regarding the role of Occupational Therapist Assistants in telehealth evaluations and the determination of whether to use telehealth could discourage their participation in telehealth care.

The integration of technology into health care delivery is exploding throughout the health industry landscape. Commentators speculating on the implications of the information revolution’s penetration of the health care industry envision delivery models rivaling those imagined by celebrated science fiction authors, and claim that the integration of information technology into even the most basic health care delivery functions can reduce cost, increase access, improve quality and, in some instances, fundamentally change the way health care is delivered.

These visions are difficult to refute in the abstract; the technology exists or is being developed to achieve what just a few years ago seemed the idle speculation of futurists. But delivering this vision in an industry as regulated as health care is significantly harder than it may seem. While digital health models have existed for many years, the regulatory and reimbursement environment have stifled their evolution into fully integrated components of the health care delivery system.

Continue Reading Digital Health: An Improving Environment for Investors

New Ethical Guidelines

On June 13, the American Medical Association (AMA) adopted a new ethical guidance policy governing the practice of telemedicine that will be published in the coming months. The policy is based on a report from the AMA Council on Ethical and Judicial Affairs and builds upon the AMA’s 2014 telemedicine guidance.

Consistent with past guidance from AMA and other professional organizations, the AMA notes that the ethical responsibilities of physicians are the same – regardless of whether the physician communicates with a patient in-person or remotely – and encourages providers to recognize the potential uses and limitations of technology when delivering care. “Telehealth and telemedicine are another stage in the ongoing evolution of new models for the delivery of care and patient-physician interactions,” said AMA Board Member Jack Resneck, MD. “The new AMA ethical guidance notes that while new technologies and new models of care will continue to emerge, physicians’ fundamental ethical responsibilities do not change.”

The 2016 policy recommends that once a patient-physician relationship is established, physicians who engage in telemedicine by responding to individual health queries electronically or providing clinical services through telemedicine:

  • Must disclose financial or other interests in certain telemedicine applications or services
  • Must protect patient privacy and confidentiality
  • Should inform patients of the limitations of the telemedicine encounter
  • Should encourage patients to inform their primary care doctor about the encounter
  • Should advise patients how to arrange follow-up care
  • Should, when necessary, recommend the use of a telepresenter or other health care professional at the originating site (e., the patient’s physical location)

Notably, the 2014 guidance required that a patient-physician relationship be established prior to the provision of telemedicine services. The relationship could be established during a face-to-face examination, through a consultation with another physician, or by meeting the evidence-based practice guidelines developed by major medical specialty societies. While the 2014 guidance did not specify whether the face-to-face examination must occur in-person, rather than digitally, many interpreted this requirement to be satisfied via an interactive telemedicine encounter.

In addition, the 2016 policy formally recognizes the importance of a “coordinated effort across the profession,” which includes clarifying standards and promoting access to technology. That said, the 2016 policy still requires the licensure of physicians in the state in which the patient is located. (As a general rule, physicians that practice telemedicine are subject to the licensure rules of both the state in which their patient is physically located and the state in which the provider is practicing.)  One potential avenue for facilitating multi-state licensure is the Federation of State Medical Boards’ Interstate Medical Licensure Compact, which offers a streamlined licensure process in each Compact state. The Compact has been adopted by 17 states thus far and more are expected to join this year and in 2017.

In sum, the AMA’s new ethical guidance should help physicians to better understand how their fundamental ethical responsibilities may play out differently when patient interactions occur through technology, and how this technology can be used to deliver more accessible, efficient and effective care.

Telemedicine Training for Students and Residents

Two days after adopting the ethical guidelines above, the AMA adopted a second telemedicine policy encouraging the inclusion of telemedicine training into undergraduate and graduate medical programs.

Since the vast majority of medical students are not learning about the potential benefits and appropriate uses of telemedicine technologies during medical school and residency, they are learning about telemedicine “on the job,” which may create missed opportunities for its use.  “As innovation in care delivery and technology continue to transform health care, we must ensure that our current and future physicians have the tools and resources they need to provide the best possible care for their patients,” said AMA immediate past president Robert M. Wah, MD  “In particular, exposure to and evidence-based instruction in telemedicine’s capabilities and limitations at all levels of physician education will be essential to harnessing its potential.”

In sum, the hope is that integrating formal telemedicine training into medical education programs will better prepare future physicians to appropriately and effectively integrate telemedicine into their clinical practices.

MaryKathryn Hurd, summer associate in McDermott’s Chicago office, co-authored this post.