ANTICIPATED HEALTH LAW DISRUPTIONS IN THE EVOLVING LANDSCAPE OF PATIENT CARE

Author:  Colette Hue, Associate Editor

Over the past few years, health care providers have seen global shifts in patient care as their industry adapts to technological advancements. Considering an increased demand for digital access platforms, compliance threats surrounding data breaches and health care consolidations are among key areas of growing concern. Alongside a rising pressure to address critical health disparities, health care law is poised to embrace a modern role in expanding competition, guiding regulatory activity, and advancing health care access beyond the hospital walls.

Increased Demand for Digital Access

Exacerbated by the COVID-19 pandemic, the accelerated need for telehealth services was met with “funding for digital health startups nearly [doubling] from $7.5 billion in 2019 to $14.1 billion in 2020.”[1] With new opportunities to improve care and expand revenue streams, health innovation funding as a whole increased 55% from 2019 to 2020.[2] Reacting to the changing landscape of patient needs, providers are finding that investment in digital models are critical to maintaining consumer relevancy.

In direct response to “the expansion of efficient technology [and] cost containment pressure,” the health care industry will see “an increased demand for lower cost but [with] more qualified health law professionals.”[3] Given an upward trend in innovative investments and competition, modern lawyers “will need to adapt to a new ‘practice of law’ in which they will act as innovators”[4] driving the “business of health care” rather than solely reacting to traditional compliance needs.[5] For example, AI capabilities enable law firms to conduct research and due diligence tasks that are traditionally performed by associates.[6] Thus, the new direction demanding a comprehensive understanding of health care services is likely to shape a legal environment geared towards dynamic platforms that can compete with the “continued growth of consulting firms providing legal services [and] the increased availability of technology.”[7] As health law shifts its service strategies to adapt to new opportunities created by digital health care models, lawyers can expect to see a spike in needs covering “life sciences, retail health, [health-focused] technology, and behavioral health.”[8]

Heightened Cybersecurity Threats

Recent advancements across digital platforms has positioned the global digital health care market “to grow by $380 billion by 2025.”[9] Given an expansion in patient care platforms, there is an “increased need for health care data access from various points,” such as between a provider and third-party service supporting a patient’s digital health portal.[10] With new exposure opening patient data to increased access points,[11] sensitive information is all the more vulnerable to an aggressive trend in data privacy breaches.[12] In 2021, health care cyber-attacks hit an “all time high” impacting 45M people in the U.S. alone, a number tripling over the previous three years according to the U.S. Department of Health and Human Services (HHS).[13] While data security concerns are not unique to the health care industry, the impact of cyber-attacks on health care models illustrates the “ramifications beyond financial loss and breach of privacy.”[14] For example, “ransomware” breaches “rendering [data] inaccessible until a ransom is paid”[15] pose a unique threat to  hospitals beyond compromised information, “as the loss of patient data can put lives at risk.”[16] Of note, health care data breaches are not only damaging to patient well-being but amongst the most expensive in cost, exceeding $9M per breach.[17]

In response increased data threats in both size and complexity,[18] the American Health Law Association (AHLA) predicts that “ever-changing regulatory environments and increasing transparency obligations will sustain demand for professionals with specialized health law expertise.”[19] Thus, “increased expectations” from both health care investors and consumers are likely to create a “dynamic regulatory environment” as providers face evolving challenges in maintaining HIPAA protections and data security as a whole.[20] As noted by the American Health Law Association (AHLA), “increased attention on cyberattacks and data breaches” creates a much more “sophisticated consume[r]” regarding expectations from health care organizations, who in turn “demands more from a compliance and security perspective.”[21] Health law attorneys should be prepared to address the the expanded needs of their clients as they navigate a changing regulatory landscape.

The Rise of Health Care Consolidations

In addition to data privacy concerns, a surge in consolidations across the health care industry calls for heightened oversight on possible antitrust violations.[22] On the tails of significant investments in technology and patient access,  “disrupters [seeking] improved ways of delivering items and services”[23] have sparked an “unprecedented [trend] in M&A activity.”[24] Specifically, major consolidations in the health care industry are represented by the pharmacy industry, with a 2019 AHLA report finding that “70% of retail drugstore purchases [were] controlled by the four largest retail pharmacy chains.”[25] The same study noted that “the five largest health insurers control 44% of the insurance market, and the five largest multi-hospital systems control 10% of the hospitals.”[26] While there is an argument that consolidation serves to benefit consumers by creating efficient access to care, the Harvard Business Review noted an opposing concern that health care consolidation nevertheless “increases prices and fails to improve the quality of care.”[27]

The Federal Trade Commission has already acknowledged a call for expanded scrutiny over health care consolidation, issuing a five year retrospective study on the impact of healthcare mergers through 2020.[28] In July of 2021, President Joe Biden signaled similar antitrust concerns in an executive order calling for the DOJ and FTC “to review and revise guidelines for hospital mergers that can lead to higher prices.”[29] In parallel to such sentiment, health care law can expect an influx of changes in regulatory systems attempting to establish an “effective antitrust enforcement framework.” [30] As the “trend of consolidation mov[es] beyond horizontal mergers [to] include vertical and cross-market mergers, joint ventures, [and] management contracts,” legal professionals will be expected to anticipate the evolving implications of new players in the health care industry.[31]

Emerging threats surrounding health care consolidation also encompass transactions small enough to escape federal reporting, including “insurers’ acquisitions of physician practices, other providers, pharmaceutical benefit managers (PBMs), and pharmacies integrating with PBMs.”[32] The impact of “smaller” transactions is manifested in a lack of “transparency about how these companies operate, transfer money internally, or treat others in the market.” [33]  As a result, critics argue that unreported consolidations create “ample opportunity for merged entities to engage in gaming and anticompetitive [actions], decrease options for consumers, and drive health care spending higher.”[34] Reacting to a quickly changing landscape, legal professionals will be expected to both anticipate and react to the opposing dynamics between diverse patient service models, threats to competition, and broadened compliance considerations.

Responding to Health Inequities

Given a focus on health care access points, the COVID-19 pandemic highlighted severe racial health disparities created by the “structural biases” fueling “delayed care, access challenges, missed diagnoses, and limited [exposure to] scientific advance[ments] [and] proper preventive services.”[35] To illustrate the severity of the gap in equitable health care in the United States, a study led by Deloitte Insights found that the cost of U.S. health inequities as of June, 2022 “is approximately $320 billion and could top $1 trillion by 2040.”[36] As noted by the American Medical Association, “the harmful inequities [of] the nation’s health system” emphasize “the urgency [for] a bold reimagining of the medical tradition’s policies and practices.”[37]

In response, legal infrastructures have begun to address the critical need to bridge the gap in health disparities. “The Health Equity and Accountability Act (HEAA),” for example, implements policy solutions designed to “eliminate racial and ethnic health disparities, increase data collection….diversify the health care workforce, [and] expand and improve health care services.”[38] Health-tech startups are also playing an increased role in advancing equitable care access through “home-centered solutions that bridge healthcare access for vulnerable communities.”[39] For example, telehealth providers aim to aleviate issues created by location and transportation barriers, two of the leading obstacles to equitable patient care.[40] In addition, efforts to reduce language barriers are seen in  advanced translation abilities or live interpreters offered on mobile apps.[41]  The recent launch of “Medicaid health equity incentives” also addresses health equity by way of economic barriers, reaching across “several states [developing] broader efforts to reform how health care is financed.”[42] As a result of expanding pressures to address health disparities, health law professionals can play a role in advancing the legislative frameworks and provider service platforms impacting equitable patient care.

Anticipating Change

In response to the opportunities created by digital advancements, streamlined care models, and a focus on equitable care access, health law professionals can predict that the accelerated growth in the health care industry will be met with an increased need to anticipate the legal oversight required to address competition, changing business needs, and advance regulatory models. As the health care industry adapts, new opportunties carry demands for specialized legal health services and the creative solutions required to meet the evolving needs of equitable, modern patient care.

[1] Kerry Amato, Healthcare Investing Trends Report, Healthcare Info. and Mgmt. Syses. Soc’y, Inc. (Feb. 18, 2021), https://www.himss.org/resources/healthcare-investing-trends-report.

[2] Record-Breaking Year for Health Innovation Funding Sets the Stage for New Era of Health Moonshot Progress, StartUp Health (Jan. 6, 2021), https://healthtransformer.co/record-breaking-year-for-health-innovation-funding-sets-the-stage-for-new-era-of-health-moonshot-fe0bd379a715.

[3] Id. at 3.

[4] Timothy B. Adelman, et al., Health Law Disruption: 2030 and Beyond; Anticipated Trends for the Health Care and Health Law Industries, Am. health l. ass’n, at 13 (July, 2019), https://www.americanhealthlaw.org/getmedia/f11b4ca1-edac-4333-a400-10a7fbd84780/20_HEALTH-LAW-DISRUPTION_White-Paper.pdf.

[5] Id. at 3.

[6] Id. at 13.

[7] Id. at 3.

[8] Id. at 13.

[9] George W. Jackson, Overcoming HIPAA Compliance and Cybersecurity Challenges for Digital Health Companies, Am. Health L. Ass’n (Apr. 1, 2022), https://www.americanhealthlaw.org/content-library/health-law-weekly/article/2fafece3-5b20-4897-8f4c-0300e8dcc422/Overcoming-HIPAA-Compliance-and-Cybersecurity-Chal.

[10] Id.

[11] Id.

[12] Heater Landi, Healthcare Data Breaches Hit All-Time High in 2021, Impacting 45M People, Fierce Healthcare (Feb.1, 2022), https://www.fiercehealthcare.com/health-tech/healthcare-data-breaches-hit-all-time-high-2021-impacting-45m-people.

[13] Id.

[14] Cyber Attacks: In the Healthcare Sector, Ctr. for Int. Sec., https://www.cisecurity.org/insights/blog/cyber-attacks-in-the-healthcare-sector (last visited Aug. 7, 2022).

[15] Ransomware: In the Healthcare Sector, Ctr. for Int. Sec.,

https://www.cisecurity.org/insights/blog/ransomware-in-the-healthcare-sector (last visited Aug. 7, 2022).

[16] Cyber Attacks: In the Healthcare Sector, Ctr for Int. Sec., https://www.cisecurity.org/insights/blog/cyber-attacks-in-the-healthcare-sector (last visited Aug. 7, 2022).

[17] George W. Jackson, Overcoming HIPAA Compliance and Cybersecurity Challenges for Digital Health Companies, Am. Health L. Ass’n (Apr. 1, 2022), https://www.americanhealthlaw.org/content-library/health-law-weekly/article/2fafece3-5b20-4897-8f4c-0300e8dcc422/Overcoming-HIPAA-Compliance-and-Cybersecurity-Chal.

[18] Id.

[19] Timothy B. Adelman, et al., Health Law Disruption: 2030 and Beyond; Anticipated Trends for the Health Care and Health Law Industries, Am. health l. ass’n, at 9 (July, 2019), https://www.americanhealthlaw.org/getmedia/f11b4ca1-edac-4333-a400-10a7fbd84780/20_HEALTH-LAW-DISRUPTION_White-Paper.pdf.

[20] Id. at 9.

[21] George W. Jackson, Overcoming HIPAA Compliance and Cybersecurity Challenges for Digital Health Companies, Am. Health L. Ass’n (Apr. 1, 2022), https://www.americanhealthlaw.org/content-library/health-law-weekly/article/2fafece3-5b20-4897-8f4c-0300e8dcc422/Overcoming-HIPAA-Compliance-and-Cybersecurity-Chal.

[22] Robert King, AHA Asks DOJ to Probe Possible Antitrust Concerns Surrounding Optum-Change Healthcare Deal, Fierce Healthcare (Mar. 19, 2021), https://www.fiercehealthcare.com/hospitals/aha-asks-doj-to-probe-possible-antitrust-concerns-surrounding-unitedhealth-change.

[23] Timothy B. Adelman, et al., Health Law Disruption: 2030 and Beyond; Anticipated Trends for the Health Care and Health Law Industries, Am. health l. ass’n, at 11 (July, 2019), https://www.americanhealthlaw.org/getmedia/f11b4ca1-edac-4333-a400-10a7fbd84780/20_HEALTH-LAW-DISRUPTION_White-Paper.pdf.

[24] Walt Cartin, et al., Health Law Outlook 2022, bloomberg law, at 11 (Jan. 18, 2022), https://assets.bbhub.io/bna/sites/7/2022/02/2022-Outlook-on-Health-Law.pdf.

[25] Timothy B. Adelman, et al., Health Law Disruption: 2030 and Beyond; Anticipated Trends for the Health Care and Health Law Industries, Am. health l. ass’n, at 6 (July, 2019), https://www.americanhealthlaw.org/getmedia/f11b4ca1-edac-4333-a400-10a7fbd84780/20_HEALTH-LAW-DISRUPTION_White-Paper.pdf.

[26] Id.

[27] Lovisa Gustafsson & David Blumenthal, The Pandemic Will Fuel Consolidation in U.S. Health Care, Harvard bus. rev. (Mar. 9, 2021), https://hbr.org/2021/03/the-pandemic-will-fuel-consolidation-in-u-s-health-care.

[28] FTC to Study the Impact of Physician Group and Healthcare Facility Mergers, Fed. Trade Comm’n (Jan. 14, 2021), https://www.ftc.gov/news-events/news/press-releases/2021/01/ftc-study-impact-physician-group-healthcare-facility-mergers.

[29] Robert King, Executive Order Calls for DOJ, FTC to Review Hospital Merger Guidelines, Fierce Healthcare (July 9, 2021), https://www.fiercehealthcare.com/hospitals/executive-order-calls-for-doj-ftc-to-review-hospital-merger-guidelines.

[30] Dave Muoio, States with Strong Antitrust Laws Challenge More Hospital Mergers but Still Fall Short on Addressing Consolidation, Fierce Healthcare (Dec. 8, 2021), https://www.fiercehealthcare.com/hospitals/states-strong-antitrust-laws-challenge-more-hospital-mergers-but-still-fall-short.

[31] Dave Muoio, States with Strong Antitrust Laws Challenge More Hospital Mergers but Still Fall Short on Addressing Consolidation, Fierce Healthcare (Dec. 8, 2021), https://www.fiercehealthcare.com/hospitals/states-strong-antitrust-laws-challenge-more-hospital-mergers-but-still-fall-short.

 Dave Muoio, States with Strong Antitrust Laws Challenge More Hospital Mergers but Still Fall Short on Addressing Consolidation, Fierce Healthcare (Dec. 8, 2021), https://www.fiercehealthcare.com/hospitals/states-strong-atrong-antitrust-laws-challenge-more-hospital-mergers-but-still-fall-short.

eloitte Insights (Jun. 22, 2022), https://www2.deloitte.com/us/en/insights/industry/health-care/economic-cost-of-health-disparities.html.

[36] Id.

[37]  Andis Robeznieks, How 3 Major Policy Moves Cement AMA’s Commitment to Health Equity, Am.Med. Ass’n (Apr. 23, 2021), https://www.ama-assn.org/delivering-care/health-equity/how-3-major-policy-moves-cement-ama-s-commitment-health-equity?gclid=EAIaIQobChMIo7-6zaG1-QIVXQ-tBh1QPAPZEAMYAyAAEgJvmPD_BwE.

[38] Senate Introduces Health Equity Legislation Critical to Reduce Health Disparities and Combat Chronic Disease, Am. Cancer Soc’y (Oct. 20, 2020), https://www.fightcancer.org/releases/senate-introduces-health-equity-legislation-critical-reduce-health-disparities-and-combat#:~:text=The%20Health%20Equity%20and%20Accountability%20Act%20(HEAA)%20of%202020%20puts,and%20improve%20health%20care%20services.

[39] Jocelyn Gao, Healthcare Startups: The Future of Healthcare Access, Bus. Rev. at Berkley (Mar. 6, 2021), https://businessreview.berkeley.edu/healthcare-startups-the-future-of-healthcare-access/.

[40] Id.

[41] Id.

[42] Sophia Tripoli, et al., To Advance Health Equity, Federal Policy Makers Should Build On Lessons From State Medicaid Experiments, Health Affairs (Apr. 14, 2021), https://www.healthaffairs.org/do/10.1377/forefront.20210409.908010/full/.