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Three Key Issues in Digital Health Contracts

Digital Health Contracts

Technological advances have seen people shift to digital solutions, and the health industry is no exception. Pandemic-related challenges also increased the adoption of digital health solutions by patients, hospitals, and consumers. Digital health includes a variety of technology applications such as telehealth, personalized medicine, health tracking, health information technology, software, and software as a service solutions (“SaaS”) intended to help with patient care, and wearables.

Digital health is a growing and rapidly changing sector. It includes a variety of technologies such as telehealth, personalized medicine, health tracking, health information technology, software, and software as a service solutions (“SaaS”) that can help with patient care. Emerging technologies such as artificial intelligence (AI) and machine learning are assisting healthcare providers to better diagnose and treat disease. Digital health is helping provide more efficient care, assisting patients and consumers to better manage and track their own health and wellness, and creating a more interconnected healthcare system.

Taking advantage of these technologies requires healthcare professionals to use digital health contracts. Digital health contracts cover three critical issues which include intellectual property rights and ownership, data use and rights, and cybersecurity. This post will focus on these issues to better understand how they affect digital health contracts and how service providers can resolve them.

Intellectual Property Rights and Ownership

The first issue in digital health contracts is intellectual property rights and ownership. The paperless office has already led the way for multiple industries to adopt the services of digital medical records. However, doubts persist regarding the ownership of this information. The data collected by these digital systems are highly personal and sensitive, resulting in the need to protect their ownership.

Data ownership is a significant hurdle in the global transition to digital health records. The users who collect and use them must be responsible for their protection and management. Therefore, contractors must incorporate clauses that clarify their ownership of these data.

The lack of agreement on intellectual property rights is a significant concern in digital health contracts. Some of the most important factors that influence these rights include the data collection type, vendors’ use, and who owns it.

Another critical aspect is the level of ownership. It all depends on who owns the data – whether it belongs to the patient or the company. Digital health contracts that protect patient rights require using methods that anonymize the data or limit their disclosure to third parties. This issue is also important since many patients consider their medical records property under US law. Therefore, they can demand more control over their data.

As a result, vendors need to undertake substantial revisions of their client-vendor agreements and include provisions to preserve intellectual property rights, establish a subscription model for their solutions, and ensure they prohibit reverse engineering or the creation of derivative works

Data Use and Rights

Nowadays, most vendors have incorporated artificial intelligence in their daily operations. This technology comes with unique issues around data use and rights, including using customer personal data for product improvement. The risks of data misuse are very high. The use of artificial intelligence technologies is often limited to the collection of aggregate data from extensive monitoring.

Data is precious both for the customer and the service provider. The agreement must provide a mechanism for both parties to preserve their interests and ensure that data is not being misused. The use of data from customers for product improvement enables manufacturers to recognize patterns that help improve their products, which has a side effect of providing better services to customers. However, some customers try to prevent service providers from using customer data for product improvement. However, some customers are concerned about this practice until they are willing to withdraw entirely from specific services to avoid this situation.

To resolve vendors’ and customers’ data use and rights issues, vendors can agree to limit their use of customer data to aggregate data and only collect additional information when there is a need to improve products or develop new features. 


Cybersecurity threats are a significant concern in the healthcare industry because they allow unauthorized access to the private information of patients, doctors, and other health professionals. Hackers are incredibly creative at devising methods of delivering malware into computers and digital systems.

Some health vendors also engage in activities that involve transmitting, creating, receiving, and maintaining Personal Health Information (PHI) on behalf of their clients. These activities are subject to privacy and security considerations from the HIPAA and other laws. They also have to ensure that access is given to the appropriate individuals, for example, the state health department or a specific client in situations involving medical records. The vendors should also ensure that their clients’ PHI is properly stored, transmitted, and safeguarded. They should also implement security measures that protect clients’ information from unauthorized access, use, and disclosure.

Healthcare vendors can undertake several cyber risks. As a result, customers should push medical vendors to adopt detailed security procedures and policies and to reserve security and data audit rights. Customers should also require medical vendors to have cybersecurity insurance to perform their services safely.

The recent breach of the US Office of Personnel Management (OPM) is an excellent example of the risks to which healthcare vendors are exposed. This attack was due to a weak security system and will force the acceptance of new data protection measures.

Other factors that attract attackers in this context include using unsecured devices and weak passwords, which put medical vendors at risk of fraud, identity theft, denial of service attacks, and system failure. For example, if a hacker can access data from a health vendor, they can hold it for ransom. The hacker can also expose sensitive information about people to other companies or competitors for business gains.

The three issues mentioned above are just a tip of an iceberg of what digital health vendors face. Often, healthcare providers are under heightened regulatory scrutiny because there is a high risk of patient fraud or identity theft. These risks pressure clients to incorporate data-protection measures from HIPAA (Health Insurance Portability and Accountability Act).

BlackBoiler Contract Review Software: The Help You Need!

If you’re a Savvy vendor, you will realize digital health contracts are full of legal and commercial pitfalls that require counsel with experience working in the digital health space. BlackBoiler has a patented Automated Contract Markup software that uses powerful AI and machine learning to review and markup digital health contracts.

Patented AI and machine learning technology power BlackBoiler with zero human involvement in the loop. BlackBoiler goes beyond doing the simple replacement, deletion, and wholesale revision of contract clauses, it uses AI to learn directly from your company’s playbook and make human-like changes to your contract.

Are you interested in driving efficiency and reducing risk in your review of digital health contracts? Request a demo today of BlackBoiler to see it in action.

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