Home >> News & Publications >> Lee and Li Updates >> Newsletter >> Potential Legal Challenges of Smart Healthcare

Potential Legal Challenges of Smart Healthcare

Hsiu-Ru Chien/Shih-I Wu

In the past, the advancement of medical devices was largely centered on researching and developing new products or improving the quality of existing products.  In recent years, however, the growth of digital technology and network communication technology has not only facilitated the research and development of novel medical devices but also encouraged a transition of the industry from traditional hardware manufacturing to a new service model of meta-analysis based on a combination of software and hardware equipment.  Medical services have also expanded beyond limited service locations (such as hospitals and clinics) into user-oriented smart healthcare services with the help of technologies such as long-distance healthcare system, homecare devices, cloud technologies, data computing and artificial intelligence.


Users can now receive reminders, take physiological measurements or obtain health data with the help of homecare, wearable or portable devices, thereby monitoring their own health or that of a family member.  Healthcare providers can also help users manage their health by collecting, transmitting, processing and computing the data.  This integration of new technologies with healthcare resources improves healthcare efficiency, and thus provides the public with an access to more appropriate treatments and preventive healthcare services.  Moreover, such integration is an essential development for both an aging social structure and the promotion of healthcare services in remote areas where healthcare personnel are insufficient and medical resources are unevenly distributed.


The application of smart healthcare, however, greatly depends on the investment from and the integration of various industries including healthcare providers, medical device manufacturers and the IT industry, as well as individual users' behaviors.  Under current laws and regulations in Taiwan, is there any risk that relevant services and products may violate applicable laws or cause any damage to users' life, body or health?  Among existing laws and regulations, which ones should relevant suppliers pay attention to?  All these are legal issues that have to be taken into consideration during the development of smart healthcare.


For instance, the most important function of long-distance healthcare is that doctors are allowed to provide patients with inspection, diagnosis and even medication services via long-distance devices.  However, Article 11 of the Physicians Act sets forth that a physician may not treat, issue prescription or certificate of diagnosis to patients not diagnosed by the physician himself or herself.  Physicians who violate the aforesaid requirement by providing long-distance healthcare may be imposed with administrative fines.  However, as the Act places strict restrictions on the development of long-distance healthcare, the Ministry of Health and Welfare ("MOHW") has announced the draft version of "Regulations of Treatment on Telemedicine" on January. 10, 2018, which is aimed at loosening the restrictions on long-distance diagnosis and treatment projects.  The impact of aforesaid Regulations on long-distance healthcare is yet to be seen.


Moreover, smart healthcare relies on the collection, storage and transmission of data to help healthcare providers quickly obtain a patient's information so as to provide timely medical services.  However, Article 6-1 of the Personal Information Protection Act states that personal information of medical records, medical treatment, genetic information and health examination should not be collected, processed or used.  One should be mindful of the regulations governing personal information protection when collecting, transmitting, using or storing patients' personal information while providing long-distance healthcare services.  Besides, long-distance healthcare providers should also comply with the Guidelines for the Protection of Personal Information of Long-distance Healthcare Patients approved by the MOHW on November 5, 2014, to avoid their services in violation of the guidelines.


In addition, smart healthcare services may involve the usage of various equipment, instruments, software or apparatus.  Are these tools categorized as medical devices?  If so, do the suppliers have to obtain licenses of manufacture and sale from competent authorities? Do they also need to apply for inspections and registration?  Regarding these issues, Article 13 of the Pharmaceutical Affairs Act provides that a "medical device" refers to any instruments, machines, apparatus, materials, software, reagent for in vitro use and other similar or related articles, which is used in diagnosing, curing, alleviating or directly preventing human diseases, regulating fertility or which may affect the body structure or functions of human beings, and do not achieve its primary intended function by pharmacological, immunological or metabolic means in or on the human body.  These devices, therefore, are subject to strict control of application laws and regulations, such as Regulations for Governing the Management of Medical Device and Regulation for Registration of Medical Devices, so as to avoid potential damages caused by inappropriate or faulty medical devices to users' life, body or health.


However, smart healthcare relates to a great variety of products.  Whether they all fall within the scope of medical devices is probably still a question for various suppliers developing, manufacturing and importing such products.  One thing suppliers can do is to search for similar products in the Medical Device Classification Database and use them as references.  Additionally, in accordance with Article 6 of Regulations for Governing the Management of Medical Device, suppliers may also approach the Food and Drug Administration of the MOHW for inquiry of the classification of a medical device and its regulatory control so as to avoid legal disputes after the products are launched on the market.


Regardless of whether such products are deemed as medical devices, liability issues subject to the Civil Code and the Consumer Protection Act would arise if the design or manufacture thereof is found defective, such as incorrect transmission of medical information, inaccurate healthcare instructions or advice, loss of user information or errors in displaying said information, unpunctual reminders for medication or physiological measurements and mistakes in information calculation or analysis due to design errors or malfunction, which may even cause significant physical or financial damages to users.  A smart healthcare system may comprise software and hardware equipment designed and supplied by respective individuals or companies, whereas the medical or healthcare services are provided by professional institutions such as hospitals and data storage and computing by professional cloud equipment and service vendors, not to mention that timely and accurate data transmission relies on the quality of network communications.  Consequently, when defective products result in damages, the determination of responsible persons, cause-and-effects and liability allocation would be of great importance in resolving arising disputes.


Apart from all the above issues, smart healthcare pertains to patient-oriented medical services, requiring high levels of cooperation and execution on the part of patients or users.  If any risk to life or health arises from users' own inappropriate behaviors, such as not taking medication or physiological measurements according to reminders from the equipment or software, not following instructions given by medical providers and thus resulting in worse health conditions or delaying treatments, or entering inaccurate information that causes misdiagnosis by the healthcare provider, which parties should be responsible and bear the burden of proof?  How could service vendors prevent similar situations via product design?  Or should they enter into prior agreements with users to protect their own rights?  These issues are also worthy of discussion in the field of smart healthcare.


Smart healthcare is aimed at providing high-quality healthcare.  Moreover, suppliers thereof are committed to getting closer to the needs of users, so as to maximize the efficiency of limited medical resources.  Various manufacturers from traditionally non-medical industries, such as electronics, electrical engineering, IT and materials, can also enter the smart healthcare market by researching and developing novel products and technology integration, thereby increasing competitiveness within this industry.  However, apart from the various risks mentioned above, there are still many foreseeable legal problems that require the attention of the industry, the academia and even legislators.  Alternatively, a consensus of opinions may be established based on an accumulation of judicial judgments on litigation cases filed.  When an industry, technologies and service diversification advance faster than legislative changes, each and every participant should not only pay close attention to the requirements and restrictions set forth in existing applicable laws and regulations, but also keep an eye on and participate in the establishment of new regulations and technical standards.  It is important for suppliers to appropriately control legal risks when taking advantage of the opportunities arising from the market of smart healthcare.