Apple products will be pushed under Christmas trees across the country over the next few weeks, but many are wondering about an item that might be on Apple’s wishlist: a play in the healthcare market.
It’s certainly a valid question. Healthcare makes up about one-sixth of the U.S. economy and Apple is the world’s largest IT company by revenue. And Apple has made moves recently that inch closer and closer to a footprint that goes beyond giving people their basic health stats.
Apple has a history of disruption, and if the company moves toward the personal health record (PHR) market or begins developing medical devices for clinical use, it could make some serious waves. But the evidence for that is still scattershot. For now, at least, it seems like Apple won’t be changing hospitals or doctors’ offices the way the iPhone fundamentally changed personal communications.
Still, the notoriously secretive company could have a few tricks up its sleeve to make a mark on the healthcare industry. Leaders at Apple are certainly not giving any details, but they are clear about the company’s overall interest in healthcare. Apple CEO Tim Cook told Fortune a few months ago the company is “extremely interested” in the area while adding there is “a lot of stuff I can’t tell you about that we’re working on.”
Apple's footprint in healthcare
Apple’s first major foray into the healthcare space came in 2014 when it launched the HealthKit platform that brings health statistics tracking to iPhones. That became particularly relevant when it launched the Apple Watch about a year later. Apple then opened up some opportunities for app developers that allow medical researchers or patients to make use of health data.
This year, Apple laid the groundwork for a productive 2018, a make-or-break year for the company in the space, according to Christina Farr, a CNBC reporter covering the intersection of technology and healthcare. She told Healthcare Dive most of this year’s healthcare activity centered around the Apple Watch.
Farr’s reporting has revealed that the company is secretly working on noninvasive blood sugar tracking sensors and was in talks to purchase its onsite clinic operator Crossover Health, a signal of potential interest in primary care.
What’s been made known to the public — including a heart study with Stanford Medicine using Apple Watch data that was announced alongside the launch of an enhanced heart monitor app — shows the company’s continued positioning for its watch to act as a healthcare device by getting more into health and fitness features.
Apple has also discussed plans to let iPhone users access their medical records on the smartphone. It follows, then, that Apple could be exploring the area of EHRs as well. However, there is some debate over whether that makes sense for the company. A little more than a year ago, the Silicon Valley behemoth bought EHR startup Gliimpse, but as of the time of this writing, developments on the purchase have not been made public.
For now, a gambler would probably place a short bet on the device play. Cook told Fortune his company will make healthcare products that are more pure. “The focus has been on making products that can get reimbursed through the insurance companies, through Medicare, or through Medicaid,” he said. “And so in some ways we bring a totally fresh view in this and say, ‘Forget all of that. What will help people?’”
Key Developer Products
- HealthKit (access and share health data from apps)
- ResearchKit (pulls personal health data)
- CareKit (to create personal care apps)
Recent healthcare acquisitions
- Gliimpse (PHR)
- Beddit (sleep monitoring)
- SMI (eye-tracking)
Programs to watch
- FDA’s Digital Health Software Precertification Program
- Stanford Medicine research collaboration to identify irregular heart rhythms using Apple Watch data
Would Apple actually be disruptive?
Rumors cropped up throughout the past year over whether Apple is flirting with EHR aspirations. Some were considered runaway analyses of Farr’s reporting, and athenahealth CEO Jonathan Bush later quashed rumors that Apple was interested in acquiring the Watertown-based health IT company, stating “it must have been a really slow news day.”
Just this week, the rumors reignited after Healthcare IT News reported Apple obtained a patent in August for a device that uses sensors to compute voluminous health data.
The healthcare business media loves to speculate and pontificate on these rumors (we’re no strangers to that ourselves) but by and large, the rumors and speculation of Apple disrupting the healthcare space are still just that — rumors. So why does the industry continue to play lip service to these reported whispers?
“It offers hope that things can be fixed and different,” Brian Eastwood, an analyst at Chilmark Research, told Healthcare Dive. From information blocking and siloed data borne out of proprietary platforms to an opaque pricing system, much is left to be desired from the patient experience. The allure of Apple — a brand with a strong reputation for customer service — entering the space is enough to work up a fever dream that the company could pull it off.
However, some are not so sure. For starters, Apple products have gotten pricier and the iOS platform has historically lagged well behind Android’s market share, calling into question whether lower-income populations will be priced out of Apple’s products. In addition, the margins in healthcare are not what the company is used to, Dan Munro, author of the book Casino Healthcare, told Healthcare Dive.
“Barriers exist across the supply chain of healthcare,” he said. While bringing a consumer sensibility to healthcare is naturally appealing because many use the products daily, a space like healthcare, where the “product” is often unexpectedly needed, could be the wrong fit for Apple as a brand-conscious company. That's especially true if its not able to have full control of that product.
About those EHR rumors
While Apple may want to act as hub for health data, those aspirations point more to PHR territory than EHRs, a largely tapped-out market.
Farr recounted that a source said about a year ago they thought a battle for the medical record space was brewing between Amazon and Apple. “It’s really borne out to be quite true,” Farr said. “The signs are pointing toward both companies being interested in the PHR.”
Google infamously bowed out of its PHR product in 2011, leaving the industry to question whether patient-generated data could become a reality in care plans. In the past six years, more emphasis has been placed on consumerism and social determinants of health while users continue to interact with and feel comfortable putting sensitive data into proprietary platforms.
Farr doesn't think Apple’s interest will equate to spinning out medical record companies. For Apple, the idea isn't interoperability, it’s portability, she said. With siloed health information being a persistent problem in the industry, whichever company — be it Amazon, Apple or another less well-known company — that solves the problem will be welcomed to the delight of users, and could be rewarded with a large customer base.
The patient data management market is a sensible bet for Apple, which enjoys a loyal, trusting customer base, according to Eastwood. “That built-in customer base is something that current PHR, EHR vendors don’t have,” he said. “That could give [Apple] an in here, especially when the bar is set so low.”
That plan — embracing user-generated patient data — falls in line with plans major EHR vendor Epic has revealed. It’s Share Everywhere interoperability platform aims to put the patient in charge of their medical data, with the power to send it to any provider regardless of the type (or existence) of that provider’s EHR. Following the announcement, Epic CEO Judy Faulkner said she is attempting to switch from an EHR company to a comprehensive health record (CHR) company. Shortly thereafter, Epic’s competitors were also moving to CHR with an eye on data types reflecting population health and social determinants of health.
With that, we’re off to the health record races.
Looking into Apple's crystal ball
One of Apple’s advantages is capital other Silicon Valley startups don’t have, which allows them to wait and see how the market moves. Currently, wearables are pushing as far as they can into the healthcare space without FDA clearance, and companies like FitBit are pivoting to employer wellness to stem flat wearable sales, Eastwood said. He added that the critical point in the wearables/tracking industry will be if such devices go from diagnostic purposes to being able to inform care plans. If these devices reach that level, Eastwood believes vendors will figure out whether they want to go into the clinical setting with such products.
"They're taking their sweet time but they have that luxury that other digital health startups don't have."
Brian Eastwood
Analyst at Chilmark Research
If Apple was to move toward diagnostic devices, Farr believes it would buy a company like AliveCor, an event she predicts will happen in 2018. AliveCor is a ripe opportunity given Thursday’s news the company launched Kardia Band, the first FDA-cleared medical accessory for the Apple Watch. The EKG fits into the watch’s band and, according to the company, can record clinical-grade EKGs in 30 seconds and show the results on the watch’s screen. Priced at $199, the band may be a device for the “worried well” for now.
One area Eastwood believes Apple can truly disrupt is clinical trials — via ResearchKit, which could allow for smaller and quicker trials. The platform could allow researchers to study smaller cohort sets and/or rarer conditions in near real-time. A recent CB Insights analysis of Apple in the healthcare space showed 11,000 individuals signed up for a heart disease study in one day. ResearchKit eases the ability to sign up for a clinical trial though, as CB Insights noted, authenticity questions can arise with such a streamlined platform.
Patients as consumers
Apple could take a number of tracks in the space. Currently, it looks poised to explore PHR and medical device opportunities. If Apple is successful in creating a large and loyal customer base for a PHR platform, it could end up leaving a lasting impact on healthcare by functioning more alongside the broader healthcare market than within it.
That customer base is ready to be engaged. Patients are becoming more and more like consumers, demanding more convenient locations, better customer service and enhanced feedback — all of which Apple already knows how to do. Imagine a Genius Bar at the mall where you can learn about how to use the health data from the Apple products you carry around with you all day. That may seem like a long shot today, but consumers are clearly eager for more user-friendly healthcare.
Apple will continue making moves in 2018, but the healthcare market is a tough nut to crack. A long-game approach with patients as consumers at the center seems more like Apple’s style. As Eastwood said: “They're taking their sweet time but they have that luxury that other digital health startups don't have."
