The Economist Asia - 03.02.2018

The EconomistFebruary 3rd 2018 53

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1

T

HE past decade has seen the smart-

phone become a portal for managing

daily life. Consumers use their pocket com-

puters to bank, buy and befriend. Now this

array of activities is expanding into an

even more vital sphere. Apple has spent

three years preparing its devices and soft-

ware to process medical data, offering pro-

ducts to researchers and clinical-care

teams. On January 24th it announced the

result. The next big software update for its

iPhone will include a feature, Health Re-

cords, to allow users to view, manage and

share their medical records. Embedded in

Apple’s Health app, the new feature will

bring together medical data from partici-

pating hospitals and clinics, as well as from

the iPhone itself, giving millions of Ameri-

cans direct digital control of their own

health information for the first time.

Apple’s fellow tech giants are also on

the march into medical services. On Janu-

ary 30th Amazon announced a partner-

ship with Berkshire Hathaway and JPMor-

gan Chase to create a not-for-profit

health-care company for their own em-

ployees that promises to employ technol-

ogy to provide cheaper care than conven-

tional health insurers offer. For the past

year, the e-commerce giant has also been

exploring a venture to use its logistical pro-

wess to start selling drugs online.

Alphabet, Google’s parent, has just

launched a third health-care firm, City-

block Health, to operate alongside Verily, a

$178bn respectively in 2016. That is more

than any tech firm except Apple. Shares in

the two insurers fell by 4% on the news of

the new Amazon-led health venture.

Apple and Alphabet, however, are like-

ly to have the biggest impact in the near

term. Amazon’s three-headed health-care

venture will cover roughly 1m employees

in the first instance, whereas Apple and Al-

phabet have the potential to generate or

enable valuable health insights for hun-

dreds of millions of users, collecting a

small slice of that value in return.

There are two broad routes into health

care. The first is doing business with hospi-

tals and health-care companies in the exist-

ing system. Alphabetprovides software

services to hospitals, for example; Apple

sells smartphones, tablet computers and

wearables to medical professionals and

hospitals. A second route is for tech firms to

use their variousplatforms to create entire-

ly new channels through which medical

care can be delivered to patients. Such

channels include watches that use mach-

ine-learning algorithms to monitor the

wearer’s health, phones through which

clinical trials can be run and apps that pro-

vide medical-grade care to people manag-

ing chronic conditions such as diabetes.

Deploying bedside manner

Start with the existing system. Alphabet’s

business here comes through Verily and

DeepMind, and has focused on Britain’s

National Health Service, which offers a sin-

gle, standardised market. DeepMind has

partnerships with four large hospital

groups, to which it provides an app called

Streams. This usesthe hospitals’ data to

generate alerts that draw doctors’ attention

to the potential deterioration of patients.

In May, meanwhile, Verily switched on

data processingfor a hospital—the NHS

Heywood, Middleton and Rochdale Clini-

subsidiary based in San Francisco, and

DeepMind Health, an arm of its London-

based artificial-intelligence (AI) firm (a

fourth company, Calico, is working to ex-

tend human lifespans, but does not pro-

vide health-care services). Alphabet al-

ready claims to be able to use AIto predict

possible deaths of hospitalised patients

two days earlier than current methods, for

instance, allowing more time for doctors to

intervene. Facebook and Microsoft are pre-

paring to add health care to their core busi-

nesses of social networking and software.

Until now the tech giants’ foray into

health care has not gone much beyond

wearable devices to track fitness or the pro-

vision of cloud-computing services to in-

cumbent providers. In future they aim to

deliver real medical services that directly

affect individual patients. All five firms

have secretive health-care skunk works,

are hiring medical talent and are buying or

backing external health-care startups. Un-

deterred by recent claims that their own

products may be harmful to mental health,

they want not only to be indispensable in

customers’ lives but to prolong them, too.

The revenues ofthe industries they

could disrupt are enormous. Health-care

costs make up about a tenth of any coun-

try’sGDPon average, worth in total $7trn

in 2015, according to Deloitte, a consultan-

cy. Two insurers, UnitedHealth Group and

CVSHealth, are among America’s largest

firms by revenue, bringing in $185bn and

Digital health (1)

Surgical intervention

The world’s biggest technology firms are poised to transform health care. That

could mean empowered patients, better diagnoses and lower costs

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