House Small Business Subcommittee on Health and Technology Holds Hearing to Explore the Rapid Growth of Mobile Health Applications and the Impact of Potential Regulations
July 19, 2013 02:23 PM
The House Small Business Subcommittee on Health and Technology, under the chairmanship of Representative Chris Collins (R-NY), recently held a hearing to highlight the contributions of mobile applications (apps) entrepreneurs to economic growth and improved health care. Witnesses also discussed how Washington regulations are helping or stifling innovation.
“The medical app industry is growing by leaps and bounds, providing economic opportunities and improving patient-focused health care in a digital age,” said Chairman Collins. “One study estimates that over 500 million smartphones will be using mobile medical apps by 2015. The medical app industry has created an estimated 500,000 jobs and nearly $25 billion in revenue. This technology is still relatively new territory for Washington, but it is important that Congress realizes its economic potential and recognizes how federal regulation affects the industry’s innovation. Today’s testimony by mobile medical app entrepreneurs provides a case for why the federal government should enact policies that responsibly balances patient safety, while fostering cutting-edge innovation and economic growth.”
At least three federal agencies, The Federal Drug Administration (FDA), the Health and Human Services (HHS) Office of the National Coordinator for Health Information Technology, and the Federal Communications Commission have roles in the regulation of mobile medical apps. The Food and Drug Administration Safety and Innovation Act, enacted in 2012, requires the Secretary of HHS to prepare a report by January 2014 that outlines a strategy for a risk-based regulatory framework that governs health information technology, including mobile apps.
On July 21, 2011, the FDA released draft guidance on the regulation of mobile medical apps. Some believe, however, that the vagueness of the guidance has created uncertainty for the industry. In March of 2013, the FDA said it hopes to issue final guidance by the end of this fiscal year.
Additionally, mobile medical apps may be subject to the Patient Protection and Affordable Care Act’s (ACA) new 2.3 percent medical device tax, and the Internal Revenue Services (IRS) has issued a final rule stating that certain mobile medical apps fall under the description of a medical device. These regulatory developments could have a major impact on the innovation of small medical app manufacturers and many are concerned that heavy-handed regulations could stifle an industry that is rapidly developing but far from mature.
Of the witnesses that provided testimony during the hearing, the most noteworthy comments came from Alan Portela, Chief Executive Officer of AirStrip in San Antonio, TX. Portela said, “Over the last 20 years, information management and information technology have played a transformative role in shaping the future of healthcare. Current and future innovations in healthcare information technology (HIT) will be no different and they will affect every facet of healthcare including how it is delivered, how it is consumed, how hospitals compete with one another to provide best value and how the healthcare labor force is realigned to meet ever-changing requirements.” He also stated that he believes small businesses and federal regulators can work together to ensure that the mobile apps are safe and secure and in compliance with existing regulations. He also stated that further guidance and standards for exchange provided by the federal government would be helpful to app developers.
Other witnesses, such as Keith Brophy, Chief Executive Officer of Ideomed in Grand Rapids, MI, were cautious of government intervention in this growing marketplace. He said, “It is important to remember the impact laws and regulations have on small businesses. I thank the Committee for placing the spotlight on developers like Ideomed who are working hard in a very competitive industry. With the possibility of unintended consequences disproportionately affecting small businesses, it's important for Congress to move carefully when making changes that affect health care mobile technologies.”