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Global tech giants, including Apple, are driving digital healthcare wave in purpose of helping people in the world be healthier and happier. The idea is simple: Your smartphone and wearables can be your personal doctors which can collect, analyze, and manage your health. Sounds terrific, especially considering the extremely high U.S healthcare cost ($9,024 per capita) , and long wait time for hospital reservation! But the aftermath is not so simple – i.e. No doctor and hospital anymore? – and consumer’s critical privacy in health information.
More importantly, now Apple needs more advanced ‘Digital Transformation’ than before: Big data analysis (Healthcare).
I would like to concentrate on 5 key topics in this blog:
- Apple’s operation model for Digital Healthcare initiative
- Apple’s value proposition of each model
- Expansion opportunities of Apple’s Digital Healthcare initiative
- Huge impact and risk of Digital Healthcare wave (Medical / Insurance industry)
- The Next Step
I. Apple’s operation model for Digital Healthcare
1. Health Kit
Apple Health kit SDK is creating ecosystem for enhancement of the fitness in individual user’s everyday life. Healthkit collects and consolidates health data from iPhone, Apple Watch, and third-party apps that Apple users use. There are four distinct categories for health data collection: Activity, Sleep, Mindfulness, and Nutrition.  These are major areas that people should keep track of daily to keep fit, and Apple helps users to ‘prevent’ (not cure yet!) from disease by offering real-time snapshot of those 4 key critical health indicators.
2. Research Kit
Research Kit is an open-ended medical research platform driven by Apple. The biggest difference from the Healthkit is that Research Kit aims to accumulate big health data for diverse clinical tests for human races rather than users themselves. Apple already built partnership with Mayo clinic , Stanford University health center, and Massachusetts general hospital to conduct medical research for extensive health data collected from Research kit. The impact and progress is huge. For instance, more than 6,000 users already sent personal data for Pakinson disease research and it normally takes 40 years to collect same amount of dataset.
II. Apple’s key Value Proposition
The key value proposition for Health kit is building an integrated ecosystem which can consolidate huge amount of small pieces of data collected from different apps, and transform those to a meaningful health guide to our everyday’s life. To realize this value, Apple creates huge ecosystem and invites key players of other sectors including wearable, medical appliances, and mobile app companies, such as Noom, Runtastic, and Pebble .
The key value proposition of the Research Kit is bigger and higher than Health Kit. Research Kit aims to improve people’s health and make the world healthier. Almost 1 Billion iphone has sold worldwide, and the data that can be collected through iphones or Apple watch will be enormous enough to increase the level of medical research.
III. Expansion opportunities of Apple’s Digital Healthcare initiative
Apple is trying to expand its digital healthcare ecosystem by connecting with other industry leading players. Apple reached an agreement on sharing and co-analyzing more than 50 million people’s health information (coded) with medical device companies including Medtronics and J&J, and IBM Watson division. Huge synergies are expected: Apple can reinforce its B2B business targeting medical industry and gain application fees. IBM Watson can establish more sophisticated PADMIS(patient administration information system), and keep expand into the medical industry.
IV. Huge impact and risk to other industries
1. Medical Industry : Mixed Reaction
– Small and Medium sized hospitals : Hostile
The biggest victims of digital healthcare wave are small-mid sized hospitals. Intuitively, if people rely more on their mobile doctor(smartphone) and become healthier, the number of average patients will decrease hitting hospital’s top line. Maybe some of hospitals go bankruptcies, and some are already finding new ways for survival: tele-medicine, M&A, and specialization.
– Mega medical institutions : Silent welcoming
Unlike our intuition, large cap medical institutions such as Mayo clinic, MGH, were pretty positive about the digital healthcare wave, because they have very different business/profit structure. Unlike small hospitals, most of revenue/profit of mega hospitals comes from two segments: critical disease curement (i.e cancer) and specialized medical research, not normal patients.
2. Life insurance institutions : More than welcoming and eager to invest
Insurance companies like Aetna, Signa, views digital healthcare as a perfect opportunity to lower consumer’s insurance claim amount . Those are very proactive to partner with Apple or google to enroll own health management program and try to change consumer’s lifestyle healthier.
V. The Next Step
Apple’s digital healthcare initiative has strong potential to make people stay healthier at much lower cost. However, to mitigate possible risk and turmoil from it, Apple should put consumer’s privacy first and consider carefully about the negative impact of exisiting medical industry, as a leader.
 World bank, Health Expenditure per capita (2016)
 Bloomberg Technology Article (2016)
 Mayo Clinic Press Release (2014)
 MIT Technology Review (2016)
 CNN Money Article (2016)