Blog

[SINGAPORE] Tech startups typically receive some leeway from regulators, so as not to snuff out innovation. But for those operating in highly regulated sectors such as healthcare and finance, there should certainly be a higher bar. And technology providers in these sectors should not hope to be shielded from the regulators’ gaze.

A case in point is the Ministry of Health’s (MOH) recent admonishment of telemedicine platform MaNaDr. MOH had stripped MaNaDr of its clinic licence in December last year, after investigations uncovered short teleconsultations of a minute or less and case notes that were sparse and brief. MaNaDr would go on to close its clinic on Dec 24, 2024.

But in a briefing on Apr 2, MaNaDr sought to distance itself from its clinic business and instead focus on its role as a tech platform.

Downplaying its clinic as a subsidiary, MaNaDr claimed that chief executive Siaw Tung Yeng and co-fonder Rachel Teoh, who are executives in the parent company, were not privy to the day-to-day operations of the clinic. The duo would also go on at length about the use of artificial intelligence (AI) tools to help diagnose patients, take case notes, and prompt doctors to ask further questions.

In addition, MaNaDr said that doctors on the telemedicine platform will now have to teleconsult with patients for a minimum of one minute before they can issue a medical certificate (MC). To his credit, Dr Siaw during the briefing admitted to the lapses. However, he stopped short of explaining how they happened.

The comments by MaNaDr’s management triggered a response from MOH, which on Apr 9 issued a number of “clarifications” regarding the company’s statements.

First, MOH emphasised that all licensees in the provision of telemedicine and their key office-holders are ultimately responsible for ensuring compliance with regulatory requirements, regardless of the licensee’s corporate structure. In other words, whether MaNaDr’s clinic was a subsidiary is moot.

Further, the ministry warned that while the use of AI in clinical settings can enhance efficiency and has the potential to improve patient outcomes, it also brings about inherent risks and ethical concerns.

Even if AI tools are used on the platform, MOH said, MaNaDr must continue to be responsible for ensuring compliance with licensing requirements. It added that the AI tools must be registered with the Health Sciences Authority as a medical device. MaNaDr will also need to ensure that fair and non-biased data was used to train the AI tool.

As for ensuring that teleconsultations last at least a minute before an MC is issued, MOH reiterated that the emphasis is not on a minimum duration for consultations. “Ultimately, the quality and adequacy of the medical care, and not just duration of the teleconsultation, matter,” it noted.

Far-reaching consequences

Despite MOH’s rebuke and revoking of MaNaDr’s clinic licence, it has to be noted that the group’s main business – as a telemedicine platform – remains operational. MOH only regulates the clinics and physicians utilising the platform.

But perhaps MaNaDr should have also gotten the regulator’s nod before proposing its new guard rails and tools, which were packaged as solutions to prevent future lapses. It must bear in mind that it is no longer a startup, but a publicly listed company – it was listed on Nasdaq in April 2024. Regardless, even if the clinic was operated as just an innovation test bed, MaNaDr should still be in compliance. Similarly, fintech startups must understand the need for regulation, especially when financial regulators are swift and merciless in punishing any non-compliance.

When operating in regulated sectors such as healthcare and finance, being compliant should be seen as mandatory – even for startups looking to disrupt the sector. After an infraction is discovered, the excuse of being unsure or not knowing rarely flies.

Apart from penalties from the regulators, compliance lapses will also affect the reputation of a company. In some instances, the loss of confidence from customers could result in more damning impact for a business than the temporary suspension of its licence.

For public companies, a lack of investor confidence could also tank a stock.

The attempt by MaNaDr to distance itself from the lapses of its clinic subsidiary and subsequent MOH enforcement actions may not have been the right steps to take. This is especially so when dealing in a sector such as healthcare, where some decisions are literally a matter of life or death.

Moving forward, perhaps MaNaDr should tread more cautiously in seeking to disrupt the healthcare sector; life without a regulator’s blessing can be a difficult one.