By now, most interested observers are well aware of historical growth in the bring your own device (BYOD) movement, in which businesses permit their employees to bring their own devices to the workplace environment and connect them to corporate networks. With this evolution well underway, we’ve lately been giving some thought to how this “bring your own” type of approach might work in other contexts. Healthcare seemed like a reasonable place to start, particularly in light of the recent frenzy of reports surrounding Apple’s apparent interest in the healthcare space.
Since we broke the news a couple of weeks ago about a meeting in December 2013 between senior Apple and FDA officials regarding mobile medical apps, much has been written about Apple’s potential plans. Of course, Nick Bilton at the New York Times kicked things off (thanks Nick!), followed closely by the folks over at 9to5Mac and others.
As we sifted through the reports and rumors, we became encouraged about the level of discourse about Apple’s possible healthcare play. Much of the discussion has centered around Apple’s assembly of a high caliber team of experts with deep experience in medical sensors and patient monitoring technologies, which gave further credence to reports of Apple’s possible introduction of an “iWatch” that would allow users to track health and fitness data generated by sensors embedded in the wearable. Some even raised the possibility that Apple might be interested in developing medical devices, peripherals or accessories for the iPhone.
We’ve also heard rumors about Apple’s planned release of a software product known as “Healthbook” that purportedly would be a part of an iOS8 release. The potential functionalities to be contained in Healthbook seem to vary by whoever is reporting on it, and include the capability of measuring and/or monitoring a user’s vital signs, blood pressure, hydration levels and glucose levels, as well as tracking data related to certain physical activities like steps taken or miles jogged. Apple, it was said, may be aiming to redefine the already crowded fitness tracker market.
While many of the items seem like interesting projects, apart from the possible introduction of an “iWatch,” the reports speculating about Apple’s rumored plans in the healthcare space seemed…well…unsatisfying.
Particularly for a company that creates categories and is defined by its emphasis on creating an easy, intuitive user experience. There must be more to it, right?
The more we thought about it, we began to piece together a framework of a possible approach that Apple could take in the healthcare space. Most industry observers acknowledge that the healthcare sector is ripe for disruption, and as we’ll see below, our views on this issue are heavily influenced by markets that Apple has created and/or redefined in the not too distant past (hint, think iTunes).
What follows is an attempt to connect dots based upon the state of the healthcare industry, trends affecting the delivery of healthcare, and general technology trends. And the end result is a possible approach that Apple could embrace that would bring it directly into, among other places, the multi-billion dollar turf controlled by a few long-entrenched providers of electronic health record systems (EHRs).
We start with a fairly unremarkable fact: the healthcare industry today is undergoing a major transformation not just in how care is delivered and by whom, but also by the degree to which individuals, as purchasers of health care items and services, are being asked to bear an ever increasing portion of the costs of their healthcare. These trends coincide with the continuing evolution in internet technologies, digital tools and mobile software, to the point where we see transformations in entire industries over a few years (if not overnight) where those types of changes otherwise would have happened over the course of a decade or more.
The introduction of the iPod, iTunes and the iTunes store are very good examples of this with respect to the music industry, and all of those developments dramatically changed not only how digitized music was distributed, but also how millions of people accessed, organized and interacted with that content. It was (and still is in some ways) a distribution system that is fragmented among many players, but iTunes and newer, similar digital media services now provide users with easy to use interfaces backed by digital hubs that make it much easier for users to store, organize, access and consume their data, whether it be music, movies, e-books or television shows.
But what does this have to do with Apple’s foray into healthcare?
Well, we think Apple has a unique opportunity to transform how consumers think about their own health and wellness, how they interact with their healthcare providers, and ultimately, to redefine how healthcare is delivered. Like those other industries that Apple and others similarly upended, (can it really be only a bit more than a decade since the launch of the iTunes store?), these transformations are already well underway in the healthcare space. Apple’s further entry into the industry, however, has the real potential to accelerate these shifts in ways for which many long-entrenched industry players will be unprepared or unable to respond effectively.
As the title to our post suggests, we think the transformation will be based on data.
But more specifically, we think it will be based on Apple’s ability to create the necessary foundation and a user experience that aggregates multiple health data sources and empowers patients to generate, understand, control and manage relevant information about their health and wellness. What’s more, many of the components to embark on such an approach are already in place: the iPhone, the App Store, iCloud, iBeacons and the rumored iWatch, to name a few.
To understand how this shift could occur, let’s take a couple of steps back to examine how and where healthcare data currently exists. Most patient-specific healthcare data historically has resided in paper records and in EHRs, both of which are typically under the control of a patient’s physician or a facility where the patient is seen, like a hospital. And perhaps more importantly, a large portion of the data that resides in these records is generated by a healthcare provider and recorded in a clinical setting, such as your doctor’s office or at a hospital.
We see this paradigm changing. And fast.
Building upon the commercial success of a variety of health and fitness trackers, we, like some other experts, can envision a day in the not too distant future when a significant portion of relevant and actionable patient data is not generated or recorded by a physician or other healthcare worker at the doctor’s office or a hospital, but rather by the individual herself, in her own home, using mobile or wearable technology.
The volume of this patient generated healthcare data is already significant, and we think it will explode exponentially if Apple, as rumored, introduces a commercially successful “iWatch” laden with medical sensors. Such a product, along with Apple’s continued support of third party app developers, will play a critical role in the transformation as well, as the number and complexity of mobile medical apps available on the App Store will enable greater numbers of patients to participate in their own health care through self-monitoring.
Look no further than AliveCor’s launch this week of its mobile ECG Heart Monitor as an over the counter product as evidence of what’s ahead for patients and their healthcare providers. This is the kind of monitoring that previously could be conducted only in a clinical setting.
We interpret all the rumors about Apple’s entry into the healthcare space to point to its development of a health and wellness ecosystem that will allow and encourage individuals to aggregate health and wellness data from multiple iPhone or “iWatch” apps. In fact, there were some reports that Steve Jobs viewed iCloud as serving the role of a digital hub that would allow users to store and manage medical data. Perhaps the latest signals from Apple suggest that it now is gearing up to try to redefine the category, putting in motion concepts that Steve Jobs may have developed several years ago.
But surely this concept of has been tried by others before, no? The short answer is of course, yes, as proponents of Microsoft HealthVault or Google Health can attest.
To be sure, Apple will certainly face challenges. But where others have failed to gain traction, we think there are a number of advantages and trends favoring Apple’s success not only in knocking down the fragmented silos of medical data, but also in taking things many steps further. As an initial matter, Apple’s experience and success in developing an integrated and intuitive hub for the organization, storage and management of digital content – iTunes – demonstrates its seeming ability to implement a uniform strategy and user experience that would allow patients to manage their healthcare data from a variety of sources.
The availability of relevant patient data is another encouraging sign. In particular, the patient generated health data to be organized is already being created and recorded by millions of users of fitness trackers and other health and wellness apps and by mobile medical devices that are currently approved by FDA. Further, self-monitoring patients are already sharing data they generate with their physicians.
In addition, recent regulatory changes will make it much easier for individuals to obtain access to additional heath data that previously had been subject to any number of restrictions. For example, recent changes to the HIPAA regulatory framework now make it possible for patients to obtain lab test results directly from a lab without physician approval. Other recent changes to HIPAA’s privacy rule further enhance a patient’s ability to access their health data in EHRs and direct the transmission of their records to online health records portals.
So while industry trends clearly indicate an evolving view to giving patients greater access to their own healthcare data, to date the data remains fragmented across various repositories, including existing app developers. Further, because in many instances available data may be raw data that is difficult for users to interpret or visualize, general access to that data may be meaningless to the individuals who create it. Against this changing environment, Apple has a real opportunity to leverage its historical design expertise (not to mention the rumored legions of medical experts it has hired) to create a user-friendly interface that provides individuals a meaningful opportunity to review, manage, understand, and most importantly, share their data.
We will leave it to the medical experts to determine how best to portray or display health data in ways that are most meaningful and actionable to patients, but we think one critical aspect of such an undertaking is that the structure of the data to be collected and managed must be standardized. From Apple’s perspective, this could serve two important purposes: first, by standardizing the format of patient generated health data, it sets the criteria for all mobile medical app developers who wish to sell their apps through the app store, and thereby sets parameters for how that app data relating to an individual could be transmitted to and stored in Apple’s digital hub (iCloud?); and second, a standard data convention also could ensure that it can be transmitted and integrated into an EHR system.
And EHR integration may be Apple’s real opportunity to transform the healthcare space.
While the volume of patient generated health data continues to grow with the launch of each new wearable or other mobile medical app, patient data will continue to be created by physicians and other healthcare providers in clinical settings and maintained in EHR systems. As many are aware, the federal government has financially incentivized healthcare providers to implement EHR systems, and as of October 2013 had paid almost $17 billion in incentive payments to physicians and hospitals to implement EHR systems meeting certain criteria (i.e., meaningful use). In HHS’ view, greater deployment of EHR technology will lead to improvements in patient care through, among other things, better care coordination.
But that view is not shared by many in the healthcare industry, including physicians who are challenged by certain aspects of the EHR systems on a daily basis, as well as by some hospital personnel who bristle at the significant prices charged by a few entrenched incumbents (up to $700 million for an Epic implementation). Typical complaints include a poor user experience, limited flexibility to use third party applications within the system, and limited ability to navigate the systems.
But the view underlying many of these issues seems to be that the dominant EHR providers have failed to innovate, and continue to market decades-old legacy systems with limited functionality, and which are generally closed to integration with third party developers or applications. In short, the view is that the technology underlying the EHR systems has not kept pace with similar content management systems used in other industries.
If Apple’s play in the healthcare industry is based upon the creation of a digital hub to support the aggregation and storage of patient generated healthcare data, we think that approach could lead to major innovations – and disruption – in the EHR industry. Specifically, it seems to be a good bet that Stage 3 of the Meaningful Use requirements will require EHRs to integrate patient generated health data. In other words, in order for the hospitals and others that have deployed EHR systems to continue to receive billions of dollars in incentive payments from the federal government, those EHRs will be required to accept data transmissions of patient generated health data.
If that is the case, it makes sense, from a hospital’s perspective, to allow only one point of entry to its EHR system, as opposed to creating separate interfaces or APIs to allow potentially thousands of mobile medical app developers to transmit user generated data to, or pull patient data from, an EHR. The same may hold true where a patient wishes to provide her physician access to certain data that may reside in an Apple data hub: it would be much easier for physicians to access one centralized data repository than for the physician to access data libraries for each medical app that the patient may utilize. In our view, Apple is best situated to capitalize on these trends, particularly given the already deep penetration of Apple products like iPhones and iPads among healthcare providers and healthcare facilities.
To be sure, there may be additional, potential hurdles along the way, such as HIPAA concerns and possible FDA regulation of an EHR connectivity solution or API, but we think these issues can be effectively managed, particularly in light of other file sharing services’ (like Box) ability to manage those issues in the healthcare space. We will try to address those potential issues in a later post.
In the end, if Apple’s entry into the healthcare space proceeds toward developing a healthcare data hub parallel to the solutions offered by EHR systems, it may not be too far of a reach for Apple to work more closely with healthcare providers to create a more user friendly and fully integrated records framework, particularly given the incumbent EHR providers’ reported inability to create a meaningful mobile experience.
Given Apple’s history of competing with entrenched incumbents that fail to innovate, we will be watching these developments closely.