KLRI : KOREA LEGISLATION RESEARCH INSTITUTE

Ⅰ. Background and purpose 

○ Recently, the healthcare industry pursues fundamental changes in medical services through convergence with the so called Fourth Industrial Revolution technologies such as big data, artificial intelligence (AI), and internet of things (IoT).

- The healthcare industry refers to any and all industries related to healthcare, encompassing medicine and medical devices in the narrow sense and insurers and IT services in the broad sense.

- In the healthcare industry at the era of the Fourth Industrial Revolution, new information and communications technologies such as mobile, big data, IoT, and AI are expected to create synergies in various areas such as development of new products and medical services, thereby making a significant contribution to improving medical services and saving costs.

○ Products and services from the new technology-based healthcare industry are expected to lower medical costs, helping the resolution of social issues such as the rapidly aging society ensued by a drastic increase in medical demands of patients with chronic diseases, as well as eliminating blind spots in welfare, such as the regional divide, which the existing legislative systems governing healthcare have failed to remove.

○ From an industrial perspective as well, the healthcare industry is expected to be a new growth engine industry, generating high added value.

- New technologies are likely to create demands for a variety of new products and services including wearable devices, healthcare systems, and platforms, thereby helping to create jobs and brining about positive effects on the overall economy.

○ In the face of a growing number of issues such as increasing medical costs following a higher life expectancy and the aging society, the medical divide likely resulted from the information divide, and difficulties in eliminating blind spots in medical welfare, the revitalization of the new technology-based healthcare industry with the use of the Fourth Industrial Revolution technologies is not a matter of choice anymore. In this vein, this study aims to identify regulatory factors that hinder the revitalization of the healthcare industry as well as relevant legal issues, and to suggest improvement strategies.

- In order to draw up strategies to revitalize the new technology-based healthcare industry from a legislative policy perspective, this study analyzes and examines legislative issues in major areas of the new technology-based healthcare industry and looks into the phenomenon of regulator delay, while suggesting improvement strategies.

 

Ⅱ. Maine Contents

○ Telemedicine: There is an urgent need for research into medical devices and personal medical data, since Korea has stricter regulation on them compared to other countries in spite of the fact that products and services of those areas have strong ripple effects and are time sensitive and that convergence between various industries can have significant industrial impacts.

- The new technology-based healthcare industry can be defined as an industry aiming to protect and enhance citizens’ health by tapping into health and medical technologies under the Health and Medical Service Technology Promotion Act, which have been getting recognition as excellent technologies resulting from innovative improvements on existing technologies.

- As is apparent from the definition, the scope of the new technology-based healthcare industry is inevitably broad. Meanwhile, this study aims to identify legislative issues in the areas of telemedicine, medical devices, and healthcare data in an effort to revitalize the new technology-based healthcare industry, as well as to provide improvement strategies.

- When one envisions the future of the healthcare, the first and most common image that comes to mind is a doctor remotely examining a patient through an AI medical device. As can be intuitively inferred from there, medical devices, telemedicine, and personal healthcare data constituting their enabling software are the most important part in the future of the healthcare industry.

- In addition to the intuitive inference as above, a primary consideration should be given to telemedicine, medical devices, and personal medical data out of various health and medical products and services, on the grounds that they have significant ripple effects and are time sensitive and that they have considerable industrial impacts through convergence between various industries.

- Recognizing the urgent necessity for study given their considerable impacts on the citizens’ lives and overall industries and their huge potential for development, which stands contrast to the presence of stringent regulation in Korea, the scope of this study comes to include telemedicine, medical devices, and personal medical data. 

  1. Telemedicine

○ Evidently, there is still not enough social consensus on telemedicine, and the legislative system has room for improvement. But, it is undesirable to keep overlook the trend that the development of medical technologies and information and communications technologies has enabled us to enjoy medical service more conveniently.

- Now that doctors have started seeing their patients remotely due to Covid-19, despite temporarily, it is urgently necessary to discuss specific measures that should be given consideration before introducing telemedicine, rather than getting bogged down in vague concerns or controversies.

○ The Ministry of Health and Welfare has permitted telemedicine on a temporary basis due to Covid-19, and it suggested Articles 39, 40, and 44 of the Framework Act on Health and Medical Services, Article 59 (1) of the Medical Service Act, and Article 4 of the Infectious Disease Control and Prevention Act as the underlying legal basis, and added Article 49-3 of the Infectious Disease Control and Prevention Act, which is newly established in December 2020, as underlying provisions.

- The Ministry of Trade, Industry, and Energy granted a temporary permit for doctors to remotely deliver medical treatment and counseling services to overseas Koreans, at the second round of meetings of the Deliberative Committee on Regulatory Exceptions for Industrial Convergence held on June 25, 2020.

○ In Korea, three university hospitals and three health care centers located in Gyeonggi, Gangwon, and Gyeongbuk Provinces conducted tele-imaging, tele-diagnosis pilot projects in 1988 for the first time, which were followed by various telemedicine pilot projects led by the public or private sector. Later, pilot projects spearheaded by the Ministry of Health and Welfare to introduce telemedicine began in earnest in 2014, based on Article 44 of the Framework Act on Health and Medical Services and Article 34 of the Medical Service Act.

- Through such pilot projects, the Government aims to verify the safety and effectiveness of remote monitoring and the safety of telemedicine and relevant technologies, and to develop national health insurance fee schedule for remote monitoring and the like.

- In addition, there are ongoing projects to improve healthcare access for patients living in rural areas, remote regions, correctional facilities, and other areas lacking healthcare access compared to urban areas. 

○ Article 34 of the Medical Service Act are provisions regarding telemedicine in Korea. The provisions expressly allow telemedicine in the form of remote counseling between doctors and medical practitioners, but not telemedicine between a doctor and a patient.

- Consideration should be given to the issues of the Medical Service Act and the Infectious Disease Control and Prevention Act, such as the necessity to reduce liability for medical practitioners, medical aid fee policies, and the scope of temporarily allowed telemedicine services.

○ Telemedicine is a non-face-to-face medical service, overcoming spatial constraints, namely long distance between patients and medical personnel, with information and telecommunications technologies. In connection with telemedicine practices, issues may arise from medical malpractice and civil liability of medical practitioners involved therein. 

- It is necessary to review civil liability such as the liability of medical practitioners (doctors), liability of employers (hospitals), and defect liability for hospital facilities and medical devices.

  2. Medical devices 

○ The new technology-based medical device industry is an importantstrategic area in the national economy, incurring huge research and development expenditures. In reality, however, regulatory issues often prevent research and development efforts from achieving commercialization and diffusing their outcomes even after R&D projects have been completed.

○ New technology-based medical devices basically feature innovativeness and convergence, and a slew of such products including convergent medical products carry high risks: Some are swallowed like tablets or inserted into the body to constantly inject a certain drug, and others transmit important body information through software. Considering substantial capital investments and required technological prowess, such medical devices feature a short life cycle from their development and production to disposal after use.

○ The aforementioned features of new technology-based medical devices also affect relevant regulation: A use of assorted technologies results in diverse statutes and regulations; new technological areas lead to regulatory void or the uncertainty of regulatory criteria and regulatory subjects; regulation is put into place in tandem with or after research and development; and technologies induce regulation at times.

- Moreover, while deregulation has been one of the main talking points lately in the area of new technologies, the deregulation of medicaldevices has been relatively passive and conservative, since a thorough review of the safety and effectiveness is a must for new technology- based medical devices addressing life and health. In thatregard, it is better to maximize regulatory efficiency from a procedural standpoint rather than eliminating or reducing regulation from a substantive standpoint.

○ Considering the importance of research and development in the area of new technologies, studies for regulatory improvement need to be conducted throughout the entire cycle of research and development in order to secure regulatory flexibility and efficiency, and institutionalizing a public support system is also necessary to meet the legal needs that may arise in the process of research and development. In this vein, this report also reviews the tasks and directions for improvement regarding regulatory issues of new technology-based medical devices, tailoring them to each research and development phase including planning and implementation of research and development and following commercialization.

○ First of all, this study examines what kinds of regulatory improvement activities are necessary for each phase of research and development of new technology-based medical devices including planning, implementation, commercialization, and diffusion. As reasons for regulatory delay differ by area, solutions differ as well. In consideration of such characteristics, this study analyzes new technology-based medical devices before reviewing phase-by-phase improvement tasks and then formulates directions for regulatory improvements based on regulatory impacts.

- At the phase of planning research and development, the first and foremost task should be drawing up a legal framework for regulatory governance based on participation and cooperation of all relevant entities, thereby securing regulatory flexibility. Further, it is necessary to institutionalize legal support activities corresponding to the needs of researchers, developers, and businesses.

- This study views that regulatory issues in the area of new technology-based medical devices can be resolved through regulatory governance such as eliminating overlapping regulation by cooperation and participation between regulatory agencies and between regulators and regulatees, identifying bottlenecks and causes of regulatory delay, formulating and applying flexible regulatory standards, and allowing feedbacks for improvement in legislation in the future.

- Regulatory sandbox or the like, which temporarily eliminates hurdles to market entrance in certain cases where regulatory delay occurs, is hardly seen as regulatory improvement strategies appropriate for the new technology-based medical device industry that is likely to grow rapidly driven by technological innovation and convergence.

- At the phase of implementing research and development, it is necessary to devise improvement strategies for major regulatory issues arising in the commercialization process. Cooperation and participation of all relevant entities should be systematically secured for the purposes of ensuring the clarity of regulatory standards and regulatory efficiency in the area of new technology-based medical devices. Also needed are formulating criteria to apply medical fees for new technology-based medical devices and providing legislative support for standardization in that regard.

- At the phase of commercialization and dissemination, a better legislation should be provided, taking into account the harmonization of norms, and it is also necessary to systemize public support for sales and distribution.

  3. Personal healthcare data

○ The amended Personal Information Protection Act, the amended Credit Information Use and Protection Act, and other statutes came into force in August 2020, paving the way to use data without data subject’s consent for research purposes, as long as the data are pseudonymized.

○ Thanks to the amendment of the Personal Information Protection Act and the like, healthcare data may as well be used without data subject’s consent after pseudonymization for purposes of scientific research, statistics, retention of records, and so forth.

- Ambiguity and inconsistency have arisen in interpreting various individual statutes and regulations and the provisions of the Personal Information, which govern medical information such as medical records that may be dubbed as healthcare data. Such compatibility issues between statutes and regulations give rise to the necessity to analyze where such issues are raised and consider directions for improvement.

○ The Personal Information Protection Act was not enough to provide mechanisms for pseudonumization befitting the characteristics of healthcare data and to ensure the propriety of pseudonumization. As a result, the Guidelines for Utilization of Healthcare Data (“Guideline”) released in September 2020 and January 2021 and the like have been developed.

- The data review board system stipulated in the Guideline lacks legal basis, and thus it is necessary to analyze current or possible issues.

○ Despite amendments to the so-called “Three Data Acts,” which have expanded the possibility of using data including personal information for public purposes, it is yet to actively use healthcare data.

- As a result, there are ongoing discussions over the idea of formulating a special Act regarding the use of healthcare data.

- Such approach, however, seems to be at odds with a series of legislative policies in the direction of unifying legal systems regarding personal information. In particular, the essential parts of legislation regarding the use of healthcare data are associated with personal information included in healthcare data and the protection of privacy, and consequently should a special Act is established, Korea’s legal system for protecting personal information would probably suffer systematic confusion and duplication.

○ It is necessary to eliminate any ambiguity that may arise in statutory interpretation of relevant issues in the overall legal system for protecting personal information, thereby enhancing normative predictability in the use of healthcare data.

- To this end, this study views that enhancing the compatibility of the legal system for protecting personal information both inside and outside the system will provide the healthcare field with more clear normative wills and directions.

- When it comes to the compatibility within the system, it is necessary to clearly systemize concepts, such as sensitive information, pseudonymized information, and pseudonymization used in the Personal Information Protection Act, as well as their legal effects. On the outside of the system, unified and institutionalized legislative approaches are necessary to prevent any confusion between healthcare-related legal systems for protecting personal information. In this manner, it is possible to provide the healthcare field with clear normative wills and directions.

 

Ⅲ. Expected Effects

□ To figure out legal issues of healthcare industry based on new technologies and to suggest remedies so as to draw implications on legal policies for vitalization of healthcare industry 

□ To be used as baseline date for following academic research