Tech companies have been reluctant to enter the healthcare market. Some of the reasons are that heavily regulated healthcare is tediously slow in terms of innovation, while tech companies evolve in cycles that take months rather than decades. Except for a relatively few traditional companies—like HP and IBM—most tech companies have shied away from healthcare. Indeed, tech companies getting into healthcare seem like an unusual occurrence. Tech giants like Apple, Google and Amazon have not fully embraced ventures into health care tech—yet.
Historically, HP ran its own medical tech division, which was spun off during the late 1990s. IBM, on the other hand, has its Watson Health technology company—which has grown with the acquisition of Truven Health Analytics and Merge Healthcare. Aside from these two giants, other big tech companies have been hesitant about getting into healthcare until recently.
The Discussion in Detail
On the discussion of tech companies getting into healthcare: One of the latest rumors surrounds Athenahealth, which is involved in cloud-based health record-keeping for small hospitals and doctors’ offices. Apple seems interested in the said electronics record-keeping company, mainly due to its existing capabilities. With Apple going into health and fitness wearables, via the Apple Watch, it seems like a natural fit to go after Athenahealth as they can serve as a repository for the health and fitness apps information.
So far, Apple is content in the development of apps for Apple Watch, extending its use to the health and fitness market. Apple already has plans for a wearable which can read vital signs like blood pressure, pulse rate, temperature, and blood glucose levels. This research is ongoing, and it is not yet clear whether it will be integrated into the Apple Watch or utilized in a completely new wearable. Indeed, the healthcare tech industry is one of the most heavily regulated and has shown the slowest adoption of new tech advancements. Among other things, it is not easy to see a fit between companies. This case is also true in terms of culture, company growth and focus.
Giants, Google and Amazon, Enter Healthcare Field?
A Google representative was once asked why the company was not actively buying health tech companies. They replied with: Google is good at building things for billions, but not so great at creating tools for a hundred thousand people. In terms of scope and scale, a more focused approach is needed for healthcare tech, which is not present in these consumer-oriented tech companies.
Alphabet, Google’s parent corporation, already has a health care company called Verily Life Sciences. The wholly-owned subsidiary mainly focuses on life sciences research. Among the projects in their pipeline is a contact lens for those with diabetes, which reads the glucose level of the wearer; a health-tracking wristband; a nanoparticle platform which integrates with the wristband and can detect diseases; surgical robotics (collaboration with Johnson & Johnson); bioelectronics medicine development; and miniaturized continuous glucose monitors.
Amazon has recently bought Whole Foods, and with their stockpile of cash, they can easily go into a bidding war for Athenahealth. Notably, Amazon bought Whole Foods for close to $14 billion, which is substantially more than the current estimated price of Athenahealth, at $5 billion. There is still a lot of room for growth in medical data warehousing. As studies have shown, some small hospitals have not yet fully converted to paperless data-keeping and retrieval.
A Final Note On Tech Companies Getting Into Healthcare
The bigger challenge is the fact that the healthcare companies and the industry itself lag behind in terms of technology. For Athenahealth to move forward, it must attract a larger market. However, it hasn’t not yet automated their document keeping. This step can be a big investment for the hospital or doctors’ clinic. In addition, it can be a big investment for Athenahealth to handle the infrastructure required for all the data migration.
At the end of that day, all tech companies getting into healthcare must make bold moves if they hope to make an impact in the industry.