In the last several years Australia has become a prominent nation when it comes to medical advances in the health industry. At Allied
Legal,
we’ve seen this trend continue with Australian health startups leading the way in innovation and commercialisation. The coronavirus
pandemic, in particular, accelerated growth in the medical space with health tech startups adopting novel strategies and new technologies to
differentiate themselves from other medical startups in Australia and around the world. Health
tech startups
like Medinet, a health tech startup connecting medical professionals and patients, and Coviu,
who provides contactless video consultations, are just a couple Australian startups experiencing significant growth. Other health tech growth
sectors
include telehealth, artificial intelligence, and personalised health solutions.
Key Medical Legislation
At Allied Legal, we work with countless medical, health-tech and medi-tech startups
throughout varying stages of their journey. Whether your startup is in the evolutionary stages or you’re well into your growth phase,
operating in the medical space in Australia involves a plethora of legislative and administrative considerations.
For Privacy and Data
Australia’s privacy regime is broadly governed by the Privacy Act 1988. The Privacy Act only applies to businesses that generate a
revenue of $3 million or more on an annual basis, unless your business falls into one of several specific industries, which include health
services. To find out if this applies to your startup, you can follow
the link.
If your medical or health tech startup falls under the scope of the Privacy Act, you will be obliged to comply with certain requirements
outlining the correct way to collect, use and store personal client information. For startups that operate SaaS or other software-based
services, these requirements should be taken seriously, as there is a good chance that you will be collecting some degree of personal
information from your customer base.
For Mandatory Notifications
The Health Practitioner Regulation National Law Act 2009 obliges practitioners, employers of practitioners and education
providers to make ‘mandatory notifications’ to the Australian Health Practitioner Regulation Agency
(AHPRA)
in certain circumstances. While the Act sets a high threshold for mandatory notification, if you are the person providing notice in ‘good
faith’, you will generally be protected by the law. A set of guidelines have been developed by the National Boards to provide the relevant
parties with guidance as to when it is appropriate to provide mandatory notification to AHPRA. These guidelines are available via the link.
Medical Practice Business Structure
At Allied Legal, we find that a unit
trust structure
tends to suit the needs of specialist practices like a doctor’s clinic. In a unit trust structure, a trust is established, and a company
acts as trustee of the trust. The medical practice business structure allows individual parties to maintain a service entity together,
reliving them of managerial duties, while each practitioner gets to manage their practice separately. It is common to see each doctor’s
holding entity issued with units in the trust, while shares in the trustee company are personally issued to each doctor. This type of
medical business structure will require thorough provisions under your startup’s unitholders
agreement,
addressing factors such as an agreed approach regarding buy-in and buy-out of the trust. To learn more about unit trust structures, you can select
the link.
Protecting Against Medical Negligence
Medical negligence or malpractice arises when someone in the
medical profession, including doctors, surgeons, dentists and pharmacists, actions or lack thereof fall short of the standards acceptable
in the medical community, resulting in a clients’ harm. This can include failure to provide appropriate or timely treatment, incorrect
diagnosis, or the supply of faulty medical products, devices, or appliances. To claim damages against your practice, a patient must prove
that your practice was negligent and that as a result, the patient suffered damages. For a breakdown on demonstrating medical negligence,
you can follow the link.
Medical negligence is a highly complex and technical area of law due to the constant changes to the law within different states.
Fortunately, new initiatives like SafeScript,
a real-time prescription monitoring system, can reduce the risk of client harm associated with high-risk prescription medicines. Despite
employing the right precautionary measures, we recommend seeking the advice of a commercial
lawyer
as soon as a medical negligence issue arises for your startup.
If you are a medical practice or health tech startup, we strongly recommend consulting a commercial lawyer to determine how you can best
comply with the specific legal requirements needed to run a medical business in Australia. At Allied
Legal,
we offer free 30-minute consultations so that startups feel confident that they are legally protected against risks such as medical
negligence. Give us a call on give us a call on 03 8691 3111 or send us an email at hello@alliedlegal.com.au
to get in touch.
The health industry is one of Australia’s more heavily regulated industries. As well as having to consider the regulatory requirements of
the Therapeutic Goods Administration, and possibly AHPRA, health startups need to determine the applicability of Australian privacy laws.