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Challenges and Opportunities in MedTech, Innovation and Digital Health

A recent McDermott roundtable on European health private equity generated key insights into the future of medtech, digital health, and data analytics, and identified opportunities for companies and investors.

Digital health solutions are widely considered to be the next big growth market. Healthcare lags significantly behind other industries when it comes to digitization, but the potential opportunities are driving developers, healthcare providers, and investors to find solutions.

PATIENT CARE
A key point to bear in mind about healthcare technology is that success and adoption may often be measured by the quality of the users’ experience, the resulting clinical outcomes, short and long term cost savings, and the resulting margin for both investors and the health care system at large. These multi-faceted goals are best illustrated by the demands for i) greater efficiency, and ii) better patient outcomes.

Efficiency is typified by, for example, streamlined bookings and appointment reminders, algorithms that triage patients to ensure they are seen by the right person at the right time, and in-home patient monitoring after patients are discharged. Patient take-up is also an excellent gauge of efficiency, for example, a high tech product that measures and reports blood sugar is of no value if the interface is too complicated for an older population.

Better outcomes result from clinicians gathering and using data to determine the right treatment in the fastest possible time, and are demonstrated, for example, by permanent lifestyle changes, improvements in self-care or care outside hospital,accurate drug dosage and use of medicines, and, in direct contrast with other sectors, reduced, rather than increased, service usage.

PRIVACY AND REGULATORY HURDLES
One of the most obvious challenges inherent in digital health is data privacy and security. Stemming from that are issues relating to control of the data, the right to use it, and ownership of the analysis. The most successful companies are those that, from the very beginning, understand the regulatory landscape in which they are operating; are transparent in terms of where their data comes from; make clear the type of data at issue, be that identifiable, pseudonymized, anonymized, or something in between; and identify who will control what data in what form. The ability to marry up these factors is a key part of any new entrant’s value proposition.

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Vetting Relationships for Telemedicine Collaborations

As the telemedicine regulatory and reimbursement environment becomes more cohesive and providers and patients alike embrace technology, opportunities for telemedicine collaborations are likely to grow. Like any collaboration, finding the right partner is crucial for success, particularly at the highly-scrutinized intersection of healthcare and technology. This post explores the factors to address when evaluating service providers and vendors for your next telemedicine collaboration.

Service Provider Evaluation

  • Ask around “town” – What is the collaborator’s reputation? What independent feedback is provided in references?
  • Determine if the service provider’s stage in the organizational “life-cycle” and its affiliated relationships are the best fit for the strategic goals of your partnership (e.g. should you partner with an early-stage company or a longstanding organization?)
  • Assess the capabilities of potential collaboration partners for meeting your organization needs, and pressure test their ability to come up with back-up options, should the need arise throughout the course of the collaboration.
  • Determine whether collaborator has state specific and service specific policies and procedures governing the provision of telemedicine services, including: (more…)



Breaking into Digital Health: Factors Companies Must Consider

Companies looking to enter the digital health field face myriad legal implications unique to doing business in this sector. Whether emerging or established, companies exploring health care opportunities benefit from careful planning around complex issues such as pace of development, reimbursement systems, strategies for responsible data collection and use, and effective corporate compliance programs. In this podcast, McDermott partners Sarah Hogan, Lisa Schmitz Mazur and Dale Van Demark take a closer look at these and other important factors companies should review when contemplating a move into the digital health ecosystem.

Q. What issues should companies consider before they enter today’s digital health care market?

DV: The first and perhaps most important thing to focus on is the business plan. A lot of business plans that may work in other service sectors may not work in the health care industry because of the way that it is structured or because of consumer expectations.

Beyond that, there are real cultural differences that we see technology companies come up against when they enter into the health care market. Frequently, technology companies are used to a very fast pace. They are used to making mistakes and learning from them, and evolving and developing to move forward. The health care industry has traditionally been much slower and more deliberative, with the goal of getting it right the first time being predominant. That cultural difference can cause problems in building relationships and setting expectations for both pace and service levels.

Finally, understanding the complexity of health care infrastructure is very important. Understanding how the health care system works and how your product, service and business plan work within that ecosystem is critical to establishing the relationships you want and really selling into that marketplace. (more…)




Digital Health’s Perfect Storm of Regulators

Both developers and users of digital health solutions face both immense opportunities and daunting challenges. One key challenge is compliance with the often complex state and federal laws and regulations adopted by the numerous regulatory bodies responsible for overseeing different aspects of digital health. The following illustration identifies the numerous regulatory bodies that have been increasingly focused on the use of technology in healthcare and are expected to continue their focus and enforcement activities in the coming years.

ODI blog

Because innovation is moving faster than the law in this area, in-house counsel and compliance officers must be prepared to identify and manage the myriad compliance and liability risk considerations arising from participation in and use of digital health tools. This will require an understanding of how each of these regulatory bodies oversees and regulates digital health today and close monitoring of how that evolves and changes in the future.

Health care providers, patients and consumers should approach the selection and use of digital health advancements with a reasonable degree of caution. As AMA CEO James L. Madara, MD, advised in his address at the recently concluded 2016 AMA Annual Meeting, “…. Appearing in disguise among these positive products are other digital so-called advancements that do not have an appropriate evidence base … or that just do not work well or that actually impede care, confuse patients and waste our time … from ineffective electronic health records to an explosion of direct-to-consumer digital health products to apps, some of which are of poor quality.” In this regard, providers would be well served by performing sufficient “due diligence” to determine whether the functionality of the digital health tool effectively meets their specific clinical and operational needs, as well as the needs of their patients, and to evaluate the developer’s compliance with applicable laws and regulations.




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