Big tech’s continued march into the world of commercialized medicine
Armed with over $500 billion combined in cash, top tech companies are continuing a steady march into the healthcare industry, utilizing the same strategies and tools that have allowed them to disrupt other industries.
Amazon has launched its own healthcare business and bought online pharmacy PillPack in 2018. Apple is turning the iPhone into a patient engagement and diagnostics tool. Google recently closed a $2 billion acquisition of Fitbit and is betting heavily on healthcare through its investment arm, AI and analytics. As illustrated below, Big Tech companies are accelerating their pursuit of the healthcare industry.
In April Microsoft announced its $20 billion deal to acquire speech recognition company Nuance Communications. The transaction is the company’s largest acquisition, since its $26 billion purchase of LinkedIn, and provides insight into Microsoft’s healthcare and AI strategy. Microsoft stated that it acquired Nuance to support the expansion of healthcare offerings for its cloud products. It is widely known that Nuance is already integrated into EHR companies like Epic and Cerner. Its AI products include a virtual assistant that integrates into patient health records and enables multi-party conversation transcription service in hospitals and large physician practices, as well as a deep learning language model that is able to convert voice dictation to structured notes that can be added to a patient’s health record. Microsoft’s CEO Satya Nadella recently noted that the acquisition of Nuance could double the company’s total addressable market based on its ability to deliver AI-first solutions for doctors and radiologists and overall clinical decision support in partnership with the rest of the healthcare ecosystem.
Apple has been targeting the healthcare space for a number of years. In 2016 it began by working on a plan (aka “Project Casper”) for its own network of healthcare clinics with Apple-employed physicians. As part of its work on Casper, Apple took over clinics that catered to its employees and hired clinicians, along with technical staff. But the project has largely stalled, and Apple has returned to its focus to selling hardware, with a focus on the Apple Watch. Apple recently announced a number of new healthcare-related features for consumers including the ability to review long-term analyses of their health, receive automated alerts of changes to their family members’ conditions and share health data directly to a provider’s EHR system through the Apple Health app. A new “Trends” feature displays 20 different health metrics such as steps, resting heart rate, blood glucose and sleep longitudinally, the company said. It will also deliver optional automated alerts when there is a meaningful change in any of these metrics. Apple is uniquely positioned to capitalize on its 113 million iPhone users; some analysts have projected that this focus on consumer health could result in additional revenue for Apple in excess of $300 billion.
Amazon’s expansion into healthcare could be one of its most consequential moves to date. Amazon recently announced plans to roll out its telehealth solution, branded Amazon Care, to all 50 states by this summer. Consumers connect with a clinician via video or chat through the Amazon Care app. If the consumer needs to see a healthcare professional in person, Amazon Care can arrange for a doctor or nurse to visit the user's home to perform examinations, such as taking blood, as well as routine primary care, such as giving vaccinations and other diagnostic tests. Amazon Care builds on a number of other initiatives Amazon has rolled out over the past few years. For example, in 2018 Amazon bought PillPack, a company that's the equivalent of Prime for medications, delivering drugs to people who take several medications in a day and refills their prescription when needed. Healthcare has been a focus among Amazon’s hardware products as well. Alexa-powered devices, like the Echo and Dot, already have health-focused features, such as providing breastfeeding advice and helping with first aid. Amazon's strengths in hardware, as well as its vast computing and analytics resources through AWS, could help Amazon Care tackle bigger challenges in the future.
Google’s healthcare division was created by a companywide effort to combine many of Alphabet's disparate health projects under David Feinberg in 2018. Its mission has been to make people's health information broadly accessible and useful in a world where finding a doctor, analyzing clinical data, and diagnosing conditions can be made easier by technology. Google Health has nearly 600 employees focused on research, imaging, clinical tools, health sensors, and more. Earlier this month Google closed the $2.1 billion acquisition of the fitness tracking company Fitbit. According to the company, the transaction is intended to make health and wellness "more accessible to more people." Under a recently announced partnership with HCA Healthcare, Alphabet’s Google Cloud will use patient records to develop algorithms that attempt to improve efficiency and patient outcomes. Like many Google initiatives, it’s essentially an initiative to access more data. Its initiative with HCA is expected to help providers better handle digital medical records or diagnostic data, and it will also serve to implant Google at the center of digital operations for medical facilities all over the country. Previous attempts to disrupt patient care using artificial intelligence (i.e., IBM Watson) has not lived up to expectations. However, industry analysts believe Google’s most recent initiative with HCA could be more successful, largely because the company is working so closely with the largest health system in the U.S.
It's perhaps not surprising that Big Tech is looking to play a central role in the healthcare industry. Aside from being a huge market – healthcare accounts for around 20% of all spending in the U.S. – it's also largely resistant to economic cycles and ripe for change. In addition, it's an industry driven by data, delivered in many different formats (i.e., images, scan results, text, voice) from a wide variety of sources. Most importantly, Big Tech companies have better connectivity to the consumer than traditional healthcare companies. Healthcare organizations can learn from Big Tech’s attempts to meet the changing needs of the consumer, providing better ways to communicate and access the information they need.
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