Tech and healthcare: What move should Apple make next?
On Jan. 15, Jim Cramer, host of CNBC’s “Mad Money,” suggested Apple purchase Epic Systems in order to strengthen its standing in the healthcare arena. Responding to intense feedback (which included the point that Epic founder Judy Faulkner intends to keep the company privately held), Cramer followed up on Jan. 23 to say Apple could instead purchase Cerner.
The real question here is not which EMR vendor Apple should purchase, but: Why would Apple purchase one of these vendors now?
The state of the electronic medical record market
The EMR market is saturated, with little room to grow due to two key reasons:
- the Meaningful Use – now Promoting Interoperability – money that spurred much of the spending in this area has dried up; and
- most major health systems have already installed an EMR, converted to a single system, or made a recent change they expect to stick with for some time to come.
Therefore, the EMR business model is quickly becoming a drive to push large health systems to purchase smaller systems and convert them to their EMR.
This is hardly the explosive growth high margin business with which Apple should look to make a splash.
But margins aside, would they even be a good match? I think not.
A consumer-focused company, consumer un-friendly products
Apple is a consumer-oriented (maybe THE consumer-oriented) digital company. Its recent moves in the healthcare space, including its Health app for iOS devices, the Apple Watch’s electrocardiogram app, and its partnerships with many providers and insurers indicate a focus on providing consumers the medical information and tools they need on the Apple devices they already use.
Apple is also all about the design.
Meanwhile, EMRs were designed for the old fee-for-service model – not for the consumer or the clinician. They were never popular among clinicians, and they historically had little to no interest in the consumer – never considering them until portals were added as afterthoughts.
EMR providers exist in the world much like AOL once did. They have an oligopoly of platforms that health systems must have to function in this age.
Unfortunately, these platforms are ill-prepared for the era the healthcare industry is heading toward – one that is consumer/patient-centric, physician/clinician-led, and which blends digitalization into the framework of healthcare. The platforms of the future will focus on bringing the patient and clinicians together, not just bill for services.
Maybe the EMR vendors can pivot, but history is not on their side. When the day comes (maybe 5-10 years, tops) that clinicians are interacting with the EMR via a voice assistant and the health system is pulling data from it via a cloud-based AI-enabled app on Google or AWS, the EMR will likely be relegated to the background.
Alternative Apple moves
If Apple wants to make a splash and be a part of the next wave, they need to own the platform that best connects healthcare consumers and their service providers.
Apple is already looking at building the application environment where patients can download, store, view and share their data. This needs to be an environment that developers can use to build consumer-centric and eventually clinician-enabled tools.
A logical step for Apple would be the purchase of a telehealth/virtual health platform, such as American Well or InTouch Health. As providers continue to integrate virtual health into care operations and link directly to the consumer, this is where the operations will be run.
The telehealth market has many new entrants on both the technology and provider end, and like the EMR market before it, will need larger players to pull it all together, making services easy to buy and sell and integrate into operations moving forward. Apple can do that.