Aventor, a newly launched nonprofit non-governmental organization, has released a whitepaper detailing what it sees as the top governmental obstacles to developing connected health tech for the poor. The list of government obstacles named by the whitepaper includes the following:
- Federal rules can inhibit needed collaboration
- Medical product liability scares entrepreneurs away
- The Office of the National Coordinator for Health IT is developing standards that could become obstacles
- Complex FCC rules must be navigated
- FDA's clearance and approval process has become outdated
- FDA jurisdiction over connected health technologies is muddled, creating great uncertainty
- Medicare and Medicaid fail to cover important connected health technologies
- Medicare coding processes and payment levels fail to encourage new connected health technologies
- Privacy and security laws impose tremendous cost through complexity
- State regulation of health professionals Balkanizes healthcare, destroying much of the efficiencies that connected health technologies offer
Given the extent of these issues, especially the number of agencies connected health startups must placate, mHealth startups serving the poor may struggle to build on even the best business models, the non-profit says.
The nature of the struggle
As the whitepaper notes, there’s lots of reasons why the agencies involved in regulating connected health companies get in the way of social entrepreneurship.
For example, one expert noted that Medicare and Medicaid may not be up to the task of supporting connected health ventures for poor populations.
"Medicare and Medicaid benefit structures and coverage/coding regimes form a static snapshot of how healthcare looks at a particular point in time," notes Ted Mannen, a Washington, D.C.-based life sciences attorney and advisor who served as General Counsel of what is now known as the Advanced Medical Technology Association. "Connected health technologies don't stand still, and so the Medicare/Medicaid snapshot needs frequent updating."
Creating realistic data security expectations is also a big problem.
"There is a high hurdle to de-identify data to HIPAA or other specifications. Encryption and other technical controls will often be part of the price of innovation, and 'perfect security' is too high a standard. We need to offer entrepreneurs predictability and practical solutions that lesson the burden around low risk applications," explains Mark Lutes, Chairman of the Board of Directors of EpsteinBeckerGreen and a privacy law expert, a member of the Aventor team that developed the study.
Companies coming up with new ideas almost inevitably end up hitting brick walls when they attempt to bring those ideas into practical use, according to another expert who contributed to the report.
"Small companies, particularly those coming from the consumer space, need help coping with the regulatory and reimbursement issues that are required to succeed in this new market segment," observes Charles Parker, a Principal in Escentium Consulting and former Executive Director of the Continua Health Alliance. "Every aspect of healthcare is regulated. When these companies come in with new ideas unfettered by traditional thinking, they inevitably confront status quo-inspired rules that say they can't do what seems to make sense. They need a helping hand to guide them around known landmines, and to advocate for a new way of thinking."
An accelerator for social entrepreneurs
But Aventor hopes to make things easier. The non-profit accelerator helps social entrepreneurs with outside obstacles to improving healthcare for low-income Americans, including government red tape (Interestingly, Aventor’s one of a growing number of accelerators aimed at social entrepreneurship, many of which appear positioned to take off in 2015).
Aventor works to expand healthcare access in the United States for the economically disadvantaged using connected health technology – both mHealth and telemedicine. Since these new connected health technologies often disrupt existing paradigms for care delivery—for example, calling upon nurses or pharmacists to manage patients in a way that hasn't been considered before—they frequently run into governmental obstacles.
Using a "low bono" model—in which the professionals offer their services at greatly reduced rates—Aventor guides the social entrepreneurs through the labyrinth of federal and state regulation of healthcare. The low bono concept is primarily popular among legal social entrepreneurs, but it may become more visible in other consulting industries with Aventor promoting the idea.
Aventor will be taking applications until February 1, 2015, to select the first batch of social entrepreneurs it will support.
For application and additional information, interested parties can visit www.aventor.org.
Anne Zieger is a veteran journalist who’s been covering the U.S. healthcare scene for over 25 years. She provides “News with a Twist,” combining solid reporting with expert insights and analysis. Her opinions are her own. You can follow Anne on Twitter @ziegerhealth.