Apple wants bigger bite of health care

Tim Cook’s claim that Apple will one day be best known for its contribution to health sounds peculiar. Step trackers and a watch with electrocardiogram features are no match for the iPhone. Then again, the $7-trillion global spend on health care is nearly twice the size of the worldwide spend on IT, so it makes sense for the sector’s largest companies to look for a way in.

Google is betting on artificial intelligence and data. Amazon has returned to the scene of past failure Drugstore.com by buying PillPack for $1bn. A potential healthcare insurance deal is expected to come from its partnership with JPMorgan and Berkshire Hathaway.

Private investment in health tech start-ups is increasing. Seed fund Rock Health estimates that 2018 was a record year for digital health start-ups with more than $8bn invested — up more than 40% on 2017. Yet the biggest digital health unicorn is closer to fitness than pharma. Stationary $2,000 bike provider Peloton is valued at $4bn — about five times forecast revenue — and is considering an initial public offering in 2019. Peloton illustrates the blurring line between health care and wellness.

Wearables range from the Zephyr Anywhere’s BioPatch, used to check a patient’s vital signs, to Beddr’s forehead stick-on to monitor sleep. Most wearables are designed to pair with iPhone apps. Apple’s advantage in consumer health tech therefore relies on its ubiquitous brand and 1.2-billion devices in use. Even if 2018’s $14bn research and development spend was equal to about just 5% of sales, these connections will enable it to build personal health records that can be used by third parties.

Two problems stand in its way. First, this sort of complete sharing of health records does not yet exist. Second, the most enthusiastic advocates of wearable health gadgets are healthy people who don’t need them. To create useful records Apple is going to need less data on jogging and more on medical conditions. /London, January 10