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Health

Operating as a Medical Startup in Australia

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.

Need help? Contact us

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.


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