'Apple Care'? Apple Aborted Plan To Launch Primary Care Health Clinics: WSJ

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by Tyler Durden
Wednesday, Jun 16, 2021 - 09:12 AM

For years now, Apple CEO Tim Cook and the rest of Apple's corporate leadership have been quietly plotting a pivot into medicine - a pivot that hasn't always gone so smooth.

After Cupertino first introduced the Apple Watch, a group of cardiologists came forward to bash Apple for overselling the gadget's capabilities. Here's a clip from a Politico story published back in March 2019:

Critics are also concerned that the FDA’s unusual celebration of Apple’s new tech — which is central to the company’s move into health care — represents boosterism that distorts the agency’s role of assuring the safety and efficacy of medical devices.

The concerns center on an algorithm accessible through the Apple Watch that detects atrial fibrillation, an irregular heart rhythm that can elevate some individuals’ risk of stroke. In many cases, the watch has given users warnings that led them to get necessary and even life-saving medical help.

In an interview with CNBC's Jim Cramer earlier that year, Cook shared stories about patients who may have died if it hadn't been for warnings about elevated heart rates or other conditions flagged by their Apple Watches: "[Users are] telling me they found a problem with their heart they didn’t know existed, and if they wouldn’t have reached out to a doctor, they might’ve died. These are life changing things,” Cook told CNBC’s Jim Cramer in January."

Still, these objections chastened Apple, which suffered a rare PR flop over its Apple Watch marketing. Since then, the company has been pretty tight-lipped about its health-care ambitions (similar to its approach to launching it own smart car).

Now, for the first time, WSJ's Rolfe Winkler, one of the paper's senior tech reporters n the West Coast, has published a comprehensive report about the company's health-care ambitions, which include offering its own primary-care health service mostly via both telemedicine and physical clinics, along with other efforts to "disrupt" the industry.

At one point, these ambitions included an "audacious plan for healthcare, with Apple offering its own primary-care medical service with Apple-employed doctors at its own clinics, according to people familiar with the plan and documents." One of the company's most audacious plans included offering primary-care medicine. It was conceived in 2016, according to documents seen by WSJ. And an Apple tam spetn months trying to figure out how the flood of health and wellness data collected from patients via the Apple Watch might be used to improve healthcare, the people said.

As a way to test the plan, Apple built its own health clinics catering to its own employees, building a team involving scores of clinicians, engineers, product designers and others.

However, according to Winkler, these ambitions eventually hit a setback, and now Apple is reconsidering the viability of a full-scale assault on health-care providers (something that Amazon may still considering as it builds out its delivery-pharmacy business). Per WSJ, plans to launch 'Apple Care' health-clinics have taken a back set as the company's health-care business focuses on its bread and butter: selling new apps and technologies via the Apple Watch.

One reason for the pull back on health: a digital health app launched quietly this year has struggled to pick up users.

But there's another, more sinister, reason Apple has balked at moving deeper into health care: some WSJ employees have reportedly raised questions internally about the "integrity" of the health data coming from the company’s clinics, which had been used to support product development. Especially with Elizabeth Holmes about to go to trial, tech firms are especially vulnerable to being accused of pulling a "Theranos".

For its part, here's what Apple's comms team told WSJ:

An Apple spokesman said data integrity is the foundation for all of the company’s innovations. He pointed to the accomplishments of its health team and said the company is still in the early innings of its work in healthcare, adding that new technology such as heart-rate notifications in products like the Apple Watch have improved users’ health. He said data gathered by Apple’s devices is enabling new research that has the potential to improve care.

"Many of the assertions in this report are based on incomplete, outdated and inaccurate information," the spokesman said.

While health-care may or may not be on the back burning, one thing's for sure: Apple has increased its R&D budget by 8x under Tim Cook to $20 billion annually. So just because Apple is laying low following its own internal failures (not to mention the more public failure of Haven, the health-care venture put forth by Amazon, Berkshire Hathaway and JPM), doesn't mean it has given up on a more ambitious expansion into health-care.