Health attorneys: 3 steps mHealth start-up developers must take

Mobile healthcare start-up developers must do three things--1) establish a business plan, 2) devise a comprehensive revenue and reimbursement plan and 3) determine product and technology insurance requirements--in order to succeed, according to health attorneys Lisa Clark and C. Mitchell Goldman with Philadelphia-based Duane Morris, LLP.

All those issues, as well as staying updated on regulatory mandates, need to be mapped out well before introducing a device or app into the market, write Clark and Goldman, in a post published by App Developer Magazine. Goldman is a business adviser and healthcare entrepreneur who focuses on the finance and corporate aspects of healthcare delivery; Clark focuses on health IT issues and mobile health for providers.

"Every start-up developer with a mobile health app or software solution must proceed with eyes wide open with respect to the aforementioned business and legal issues," the authors say.

The checklist notes the business plan effort is critical to funding and that a revenue model is key to growing a mHealth business.

"Many entrepreneurs focus primarily on the financial projections and pro formas and tend to miss some of the key execution issues," Clark and Goldman say.

The authors advise paying close attention to regulatory actions, such as guidance documents or standards published by the U.S. Food and Drug Administration or the Federal Trade Commission. Last fall, the FDA issued its final guidance on mobile medical applications.

And, despite supporting more legal oversight, the FTC is not planning any specific regulations. However, Sen. Chuck Schumer (D-N.Y.) last week made a call for greater regulation to prevent data sharing by device and app makers. Those efforts come on the heels of an FTC study claiming mobile health and fitness applications are sharing user data with third-party vendors.

"Many entrepreneurs minimize the business disruptions that can result from noncompliance with the regulations," Clark and Goldman say. "Entrepreneurs should be aware that a smart investor would never back an app that does not meet regulatory standards, and could be investigated or even shut down."

Each of the three key aspects explored on the checklist are equal in importance, the authors say.

"None of these issues will answer themselves and, without careful consideration, they could impede the developer's ability to get funding and enter the marketplace," they say. "On the other hand ... developers who do their homework now will reap the benefits later."

To learn more:
- read the checklist at App Developer Magazine

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