Apple Considers Healthcare Services Crossover

Posted on October 23, 2017 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

Typically, we cover stories describing how technology companies are pitching their products to providers. This time, in a move I predict we’ll see more often in the future, it looks like Apple has been pondering how it can enter the brick-and-mortar primary care business. This should concern both hospitals and primary care organizations, particularly hospitals that own physician clinics.

Apparently, Apple has been thinking about expanding into the clinic business for at least a year, according to an article from CNBC. Sources told CNBC that the tech giant was in talks to buy a startup known as Crossover Health, which helps big employers create and operate on-site medical clinics. The article reports that while Apple and Crossover talked for months, the two didn’t strike an acquisition agreement.

That doesn’t mean that Apple is backing away from buying a provider organization. The story also notes that Apple has reportedly approached national primary care group One Medical, which charges patients an annual fee for concierge-style care. It’s clearly no coincidence that One Medical also pitches its program to employers.

There’s an argument to be made that Apple can pull this kind of deal off. If nothing else, Apple has been very successful with its chain of brick-and-mortar retail centers, which have been a major sales channel for the company. Between Apple’s magic-touch history with the stores, and large medical groups developing increasingly strong retail chops, there’s a lot of potential there. It’s possible that if Apple acquires or partners with the right clinics, it could be the first major tech company to be a roaring success in the sector.

It’s also worth noting that Apple customers are some of the most fanatically loyal buyers in the world, with many having stayed with the company during all of it ups and downs. If it can mobilize these fans, some of whom are also invested in Apple smartwatches and phones, it could invent new ways to enhance their care experiences. And that could set its clinics apart.

That being said, healthcare is far from perfecting the retail experience for its customers, though there are standouts like One Medical on the map. (Full disclosure: I was briefly a patient in its Washington DC office and came away impressed with the way the care was delivered and packaged.) Few hospitals or clinics are getting it right just yet.

Perhaps more importantly, while Apple has been at the margins of the healthcare business, I doubt it has a deep institutional understanding of healthcare mechanics. This might not be a big deal initially, but as the dust settles on an acquisition it could be a culture clash. After all, healthcare delivery is different from retail operations in some very important ways, including but not limited the herky-jerky way providers are forced to collect on their bills.

My feeling is that even if Apple pours endless capital into such a venture, what will matter more is how well it comes to understand healthcare operations. I believe that it might do better if it partners with a health system with plans to expand its clinic presence. After all, working with the health system would provide Apple with much deeper resources, a deep bench of executive talent and the ability to partner directly on rolling out medical groups. Let’s see if things head that way.