We often hear words like “sharing” and “gig” to describe our new economy of online platforms, connectivity, freelancing, and big tech. While these have largely become buzzwords wielded by millennial economists and pundits — there’s no denying that we distribute goods and services differently than we used to. And faster than we used to. And on a more global scale. And… well you get the idea.
In this fast-paced environment, there’s one important tortoise lagging far far behind the hare: the law. Regulatory agencies, legislative bodies, and municipal governments simply can’t keep up with the changing norms in medicine, technology, and the corporate world (especially when it comes to disruptor unicorns like Airbnb, Uber, and Lyft) — nevermind figuring out how to effectively regulate them. Right now, innovation and disruption are winning the race (whether or not that’s a bad thing is a discussion for another time).
We decided to outline a few examples of “telehealth” platforms, wearable technologies, and gig economy disruptors that are surging ahead of law and regulation. In a few of these scenarios, government agencies and municipalities are trying to catch up. In others, they don’t seem to know how to react.
Hold On, Let Me Text My Dr.
“Telehealth” is a blanket term that denotes the practice of healthcare and the healthcare system through telecommunications technology — and it’s a big blanket. Telehealth covers remote counseling, mental health services, dietician and nutrition coaching, healthcare education, and more. As you can imagine, the practice of medicine through digital platforms is a fairly new concept that state and federal regulators have an obligation to interpret in the name of patient care and safety.
While the practice of telehealth could increase access and convenience, expand healthcare to underserved communities, and inspire patients to invest more in their own health, there could also be some major problems when it comes to proper licensing of professionals and patient privacy and security.
First, there’s the problem of jurisdiction. Do licensed professionals need to be licensed in the state where they’re based AND the state where the patient is receiving care? Do they need to seek Board Approval anywhere that a remote patient lives? Is there reciprocity among states?
Unfortunately, there’s not one simple answer. The issue is currently controlled by state regulations. Medical professionals are advised to check with both the Board of their state and the patient’s state to learn about the policy in place — which is an onerous process that many medical practitioners don’t have the time and expertise to evaluate. There are a few online resources that attempt to help (here’s an overview of telehealth policies broken down by state as a starting point), but overall many standards are not being met. And that’s not all…
Perhaps more importantly, what about patient privacy and security? Should online platforms like BetterHelp and Healthie be required to abide by the same patient privacy thresholds as a traditional medical practice? Probably. Are they? It’s hard to know.
The Health Insurance Portability and Accountability Act (HIPAA) is United States legislation that provides data privacy and security provisions for safeguarding medical information. HIPAA Privacy and Security rules apply to certain “covered entities” including healthcare service providers, medical clearinghouses, and insurers. Technically, according to their guidelines on telemedicine, “any medical professional or healthcare organization that provides a remote service to patients in their homes or in community centers” is required to follow their set of guidelines. The catch is, oftentimes, telehealth apps are not considered to be “covered entities.”
However, there are many states that still regulate telehealth in a similar manner to HIPAA, especially around communication with patients and data privacy. Such requirements include communication through encrypted and secure platforms (meaning no SMS, email, or typical video conferencing) in order to protect patient medical history and data privacy — but again, it depends on the state and how transparent the company is with its patient data storage and security policies.
Why is my Apple Watch telling me I’m Code Blue?
The popularity of wearable tech (like Fitbits and Apple Watches) with health tracking functionality is on the rise. While there are potential benefits of people taking health into their own hands (it’s hard not to when your tech can literally tell you when you’ve been sitting too long) — there are downsides, too. For example, are these devices relaying accurate health information? Are they considered legitimate medical device that should be relied upon? Are they tracking you? Are they even regulated?
This may come as a surprise, but regulating agencies are behind these emerging technologies, too. However, the Food and Drug Administration is making a concerted effort to adapt when it comes to wearable tech (at least the software that powers it). According to the FDA:
“The Software Precertification (Pre-Cert) Pilot Program, as outlined in the FDA’s Digital Health Innovation Action Plan, will help inform the development of a future regulatory model that will provide streamlined and efficient regulatory oversight of software-based medical devices.”
Currently, the FDA evaluates medical devices for certification based on the physical products themselves. Alternatively, under the pilot program, they aim to look at the software behind digital health tech. While this is a step forward, the FDA and other regulating agencies still operate under a traditional model that posits meticulousness and lengthy approval processes. The emerging companies selling this tech to consumers operate under the new fast-paced rules of the gig economy. This contrast speaks to the fundamental differences between the old and new, and will likely continue to cause problems.
For example, fitness tracking app Strava inadvertently revealed the locations of secret U.S. army bases. Oops.
Strava released its “Global Heat Map” of user data from 2015-2017, showing glowing paths frequented by its 27 million users from around the world (at least those that didn’t realize that they were being tracked by default). The app used satellite information to colorfully display locations and movements of subscribers over time — including paths frequented by military personnel on active duty.
The published paths revealed running and biking routes of military members stationed at bases around the world, which is potentially problematic for many reasons. Data in Syria and Afghanistan, for example, is almost exclusively from military personnel, revealing their frequented paths and most-used buildings around military bases. The Department of Defense and other Defense Ministries are contemplating bans of such technology, but it’s not yet clear if out-right bans will be effective in preventing all sensitive data from becoming public.
Do you Dare to Disrupt the Disruptors?
Ridesharing apps (namely Lyft and Uber) and Airbnb are disrupting established industries and norms in municipalities around the world. Lawmakers and regulators at different levels are attempting to respond to these new gig businesses — some favorably, and others…not so much.
Battle in Austin
Back in 2016, taxi drivers in Austin were required to get fingerprinted as part of a criminal history screening. Uber and Lyft didn’t want their drivers to be subject to this same screening, so they left. Austin became rideshare-less (leaving drivers quite jobless). As a solution, drivers formed a co-op and launched Ride Austin, the city’s own nonprofit rideshare platform.
Uber and Lyft have since returned to the city, reluctantly agreeing to follow the city’s screening requirements — but the formation and continued success of Ride Austin suggests that cities can have some power over gig giants.
Airbnb Must Have One Heck of a Legal Team
Airbnb has increasingly disrupted the hospitality space since its founding in 2008. Rental units through Airbnb are often cheaper and/or more unique than typical hotels, leading travelers to choose Airbnb frequently (if not exclusively). In basic terms, hotels are highly-regulated, having to obtain permits and abide by stringent health, safety, and zoning laws before they even host their first guest. Airbnb and its hosts don’t face the same regulations.
Airbnb maintains that they are simply the platform that allows the guests and hosts to connect — implying that hosts are the ones that need to abide by local laws and collect necessary taxes. Does that happen? Eh. No.
This has led some municipalities to outright ban Airbnb in certain areas or the whole city — but even I have stayed in an Airbnb “with a friend” in a banned municipality. Welcome to the New Prohibition, where Martha with the Charming Bungalow is a bootlegger.
You might notice that the most prevalent (and, perhaps, most effective) responses to emerging business models have been at the local level; municipalities have actually been able to strike a balance between protecting their communities and permitting these new models to thrive. However, we also have to think about how these companies are fundamentally driven by innovation and their ability to adapt. For example, Nashville, TN is actually the first location of Niido Powered by Airbnb, Airbnb’s first branded apartment complex for homesharing. The concept is that residents are able to rent out their apartments to travelers to help offset their own cost of rent or travel. This makes sense for Airbnb because rental agreements everywhere have started expressly banning tenants from listing their rental apartments. Now, all of the bachelorette parties hoping to hop on a pedal tavern from a downtown rental will have a whole new building to choose from. We see what you did there, Airbnb. Clever.
Overall, we could debate about whether or not these disrupting companies and new economic principles are ultimately good or bad for society (the answer probably comes down somewhere in the middle) — but the reality is that, either way, consumers, communities, and regulators around the world are confronted with this new reality. Consumers seem to be ready to embrace these new norms (since we are the ones powering their rise). Communities seem to be taking action to innovate on their own terms to strike a balance that works for their citizens. Regulators and the law appear to be behind the quick pace of new movements and models, which begs the question — should regulators seek a new system of regulation for the new economy?
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