Apple wants to make the iPhone a health databank
SANTA CLARA, California, June 20, 2017 /PRNewswire/ -- Comment by Kamaljit Behera, Industry Analyst, Healthcare, Visionary Innovation Group, Frost & Sullivan:
This is not the first attempt by a tech company - Google Health (now defunct) and Microsoft HealthVault are earlier examples. While Google Health didn't have sufficient traction, it also may have been too early in the game. Microsoft HealthVault is still available as a service - but how successful it has been is arguable.
There are two sides to the story of a tech company attempting to solve the health data interoperability issue:
a) B2B Approach: Getting providers / path labs / health systems / primary care physicians to directly upload medical health data to a patients' health account (which is the more difficult one).
b) B2B2C Approach: Automatically syncing patients' health and fitness devices and other medical devices to upload data to the health account (but given the current tech limitations of most medical devices to do this, patients would manually have to enter data in their health account).
Part 'a' is naturally difficult - key challenge: interoperable formats of data, apart from HIPAA compliance issues, formal processes to upload data (without increasing administrative burden) and resistance to change / low tech adoption rates. Part 'b' is possible with the fitness bands and sundry home health devices such as blood pressure monitors and weighing scales, but with advanced medical devices, this will remain a challenge. Patient engagement, to encourage them to manually enter data is an even bigger issue - one that the entire industry is grappling with in this age of digitization.
Speculating the Apple bet on athenahealth:
Apple has a track record for good engagement (e.g. already acquired personal health data startup Gliimpse), but how it will work with healthcare remains to be seen. As per CNBC's Apple has been hunting for startups in the cloud hosting space that could fit into its bigger game-plan for monetizing health data economy. Another proposed strategy for Apple (by Citigroup analyst Garen Sarafian) is to buy athenahealth. Considering the fact, athenahealth has 83 million patient records and a network of roughly 100,000 medical providers, and a solid track record of integrating with clinical IT systems like Epic and Cerner. This does make sense. However for further growth to increase the patient base, the above challenges would still hold.
On a speculative note, it appears yet another frugal snowball attempt to find an official positioning in the vetted healthcare data economy space. Having said that, lack of defined timelines to demonstrate tangible outcomes has gained negative clout for Apple's health initiatives in the recent past (e.g. medical grade wearables). Further, bringing the competitive equation around wearables and mHealth segments providing limitless potential across healthcare applications, Apple cannot underestimate recent deals by Fitbit and other emerging solutions. This may not be the end to the deal chain. In-line to Apple's reputation, one cloud possibly anticipates the next phase of deal-making around blockchain technology.
What's there for athenahealth?
In the last few years, athenahealth, has been viewed as one of the fastest-growing companies in health-care technology space. However, post going public the company is being subjected to volatility and frequent disappointments. For example, after the company released its Q1, 2017 earnings report in April, it failed to meet its revenue and EPS estimates and further dropped its full-year guidance shares which made its share to fall almost by 20%. Despite these doldrums around its recent financial performance, athenahealth's compelling portfolio of solutions and ever growing customer base makes the $5 billion software company (athenahealth, inc.) one of the most compelling yet frustrating players in the digital health segment. Today the company is giving a tough competition with its large array of solutions around network medical record, revenue cycle, patient engagement, and care coordination and population health services. For the last 2 quarters, industry watchers have been speculating athenahealth being ripe for acquisition. Considering existing working engagements between athenahealth and Apple (e.g. health App/ HealthKit) the proposed deal can be seen as a complimenting win-win for both. However, the timing and volatility around athenahealth's financial performance may not be an ideal time for valuation. Apple seems to have lost its level of innovation compared to before. Companies like Amazon and Google are perceived more innovative than Apple. Is this some kind of a tepid warm attempt to try healthcare again?
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