Apple’s Lack of Focus on Healthcare

On the heels of announcing HealthKit (with Mayo and Epic as partners) and with the launch of its first wearable device, most of us thought Apple would make a splash into healthcare this week. As Lt. Dan covered, the Apple announcement fell short of what most people expected to hear about Apple and healthcare. 

I heard from several people about work they were doing related to HealthKit integration. Most people, like us at Catalyze, were planning on a big week in healthcare for Apple and wanted to take advantage of the press. There was a lot of that, but it was mostly about how disappointed people are that Apple didn’t announce anything big.

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We were wrong about Apple for several reasons. The first is that Apple is still sorting out its healthcare strategy. The company has been quietly meeting with healthcare organizations for a while, but most of those meetings were focused on mobile use by clinicians (think AirStrip). I’ve heard that the relationship with Epic that was announced earlier this summer was new and even Epic’s employees didn’t know anything about until that day. I’m betting Apple is still sorting out how it will work with organizations like Epic and Mayo.

The second reason is that Apple is moving into wearables with its new Watch, but not activity trackers or health wearables. It’s similar to how Apple has penetrated other segments with hardware. When the first generation iPhone was announced, it didn’t have an app store, MMS, iMessage, NFC, advanced motion steps, HD video, etc.

But slowly Apple has added all of these things, and in the process, it now does mobile messaging at scale, is the most popular digital camera, and has millions of active credit card numbers in its app stores. It has also established itself as an ebook reader and a clinical messaging platform (Voalte and PerfectServe come to mind). It didn’t launch the iPhone or iPod Touch to be a clinical communications device, but now they are.

The new Apple Watch is pretty cool as a connected watch completely independent of any health-related tracking. It comes with sport bands, but it also comes with premium bands. It’s not meant for healthcare, so I think Apple is fine that it doesn’t do some of the biometric tracking people were expecting. It’s not competing with Fitbit, Jawbone, Pebble, Basis, or any of the others. It’s trying to compete with all of them at the same time, as a wearable device that is smart (check email, answer calls, auto-reply, run apps) and that tracks certain biometric data (steps, heart rate, etc.).

I’m wearing both a Pebble smartwatch and a Jawbone Up on two different wrists. The Apple Watch would replace both, look better, do more, and cost about $75 more than those two devices combined. Not having to worry about multiple device charging and syncing is worth something. We’ll see how big the market is for the Apple Watch. I’m betting it will do very well.

The last reason we didn’t hear much about healthcare is that Apple wanted to aggressively go after another market – payments (Apple Pay).

Apple had a full day of announcements, more than in a few years. It announced a new phone (iPhone 6), a new phablet (iPhone 6 Plus), a new category of devices for the company (wearables), and a new target market. Adding healthcare would been too much for one event.

Apple has partners in payments as it does in healthcare — Epic = American Express and Disney = Mayo. But I think Apple is better placed to disrupt payments than it is healthcare, or at least it is more clear to Apple how it will do that.

In recently released transcripts from Apple’s meetings with the FDA, the company’s executives are quoted as saying about healthcare, "There may be a moral obligation to do more." I’m not sure Apple believes that, or maybe it also feels a moral obligation to make it easier to buy a giant smoked turkey leg in Frontierland at Disney World using your watch or phone. I’m betting that Apple sees a more clear path to making money in payments than in healthcare.

I don’t think any of this means Apple isn’t going to be doing more in healthcare. It’s just going to take more time for it to figure out what it is doing and how it is going to do it.

TGphoto

Travis Good, MD/MBA, is co-founder of Catalyze. More about me.

  • Mark H. Johnson

    I wear the Pebble (I was Kickstarter) and the UP too. I look forward to rolling those into 1 device, but I will not go for the 1st gen Apple Watch. I think the next gen with improved battery life and advanced app ecosystem will be the best bet – more likely to have a sleep tracker with better battery so I don’t have to charge it at night. I will be getting in on the payments via NFC by replacing my aging 4s with the new iPhone 6 Plus. Now, I just have to find a running belt with a pouch big enough to hold the larger phone on my runs (use iSmoothRun to export to aggregators like Strava, RK and DailyMiles). That’s the best part of the Pebble – iSmoothRun integration and display. This is just the beginning and we will see much more from Cupertino in this space. I agree with your assessment on payments – the “free” U2 album was a smart display of the footprint of that ecosystem and another way to get more folks to sign up for iTunes – requires a credit card…

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