Apple Said to Weigh Digital Health Play

For the last five year or so, digital health has been the Rodney Dangerfield of investment sectors, getting more attention than respect, and garnering more page views than dollars.

However, two important events reported in the last several days suggest all this may be about to change.

First, Fortune’s Dan Primack broke the news on Saturday that Castlight Health — a startup co-founded by U.S. Chief Technology Officer Todd Park in 2008, with the intention of providing increased transparency to healthcare costs – has secretly filed an IPO; an astonishing valuation of around $2B is anticipated.

That’s both impressive growth and serious money, and suggests it’s possible to win – and win big – in digital health.

Second, two complimentary reports from last Friday collectively suggest that Apple is starting to take healthcare very seriously.

For starters, the New York Times reported that Apple executives met with the FDA in December 2013 to discuss mobile medical applications.

In addition, 9to5Mac, a website devoted to “Apple Intelligence,” claimed that the next version of the iPhone operating system, iOS8 – slated for release later this year – will introduce an application codenamed “Healthbook” that is “capable of monitoring and storing fitness statistics such as steps taken, calories burned, and miles walked,” according to 9to5Mac.

This operating system is also anticipated to facilitate integration with Apple’s rumored “iWatch,” a device expected to come equipped with an impressive range of health-monitoring capabilities.

Apple’s pursuit of health – and especially FDA-worthy products, if they materialize – has the potential to be game-changing, though a key issue, as Union Square Venture’s Fred Wilson perceptively observed, is “whether Apple will make it easy to get our data out.”

In other words, will Apple emulate Epic, a notoriously closed EMR (seehere and here) that’s earned the enmity of many (including Rock Health’s Co-Founder and CEO Halle Tecco, who pointed out at a recent, exceptional DFJ Entrepreneurial Thought Leader talk that the Epic systems at UCSF and Stanford apparently can’t even communicate with each other), but has built a tremendously successful product and business?  Or will Apple try to build a more open ecosystem, as championed by most other EMR vendors, who tend to celebrate interoperability but often struggle for revenue.

It’s also important to recognize that, gadgets, apps, and breathless tech headlines not withstanding, Silicon Valley hasn’t disrupted healthcare – not even close.   Disruption ultimately requires credible evidence of either improved outcomes, reduced costs, or both, yet turning information into impact is exceptionally difficult.  We should celebrate passion – but not confuse it with the progress we hope it enables.

The promise, however, is unmistakable.  Between Castlight’s anticipated $2B exit and Apple’s enthusiastic embrace, digital health’s robust potential may finally be too tactile for consumers, investors, and even medical product companies to responsibly ignore.

David Shaywitz, MD, PhD is co-founder of the Center for Assessment Technology and Continuous Health (CATCH) in Boston. He is a strategist at a biopharmaceutical company in South San Francisco and regular contributor to Forbes, where this post originally appeared. Shaywitz is also co-authored of recently published book, Tech Tonics: Can Passionate Entrepreneurs Heal Healthcare With Technology, available from Amazon here.

7 replies »

  1. I am dying to see Castlight’s S1

    And while the US fanbois swoon has anyone noticed that the world’s largest, most innovative & biggest revenue producing smart phone company has had a watch and a health app out for nearly a year? No, I didnt think so. So don’t be convinced that the route to mHealth nirvana goes through Cupertino, as it doesnt go through Gangham either…

  2. I hope that Apple takes a different tack with iHealthBook and uses it more as a platform play allowing an aggregation of health & wellness app data, similar to what Aetna is trying to do with CarePass, to help the mHealth market get beyond the multitude of data silos we see today. There is value in that data that APPL could surely leverage.

  3. The idea of Healthbook as bound to the phone has interesting regulatory implications. Physiologic devices such as ECG’s might have a much easier time getting through FDA if the interface provided by Healthbook was already FDA-registered as the ECG interface.

    The other regulatory implication is for multiple devices and apps networked together. Will Healthbook allow the combination of an ECG with a Pulse Oxymeter from two different vendors to trigger an alarm via a third vendor’s Alarm app? How will the FDA handle Healthbook or the Alarm app registration?

    The FDA and the medical device industry are entering the uncharted waters of networking and it’s going to get interesting.

  4. Super interesting, if true — would have major implications for the startups that have been selling digital health gizmos in the Apple store ..

    Would be a logical response to moves by Google and Samsung in this area.