It has been clear for some time that Apple intends to properly enter the healthcare space. MobiHealthNews reported in 2016 that Apple was working with the FDA on two “cardiac-related devices.” The Apple Heart Study overtly demonstrated Apple’s interest in the space.
There is clear logic behind Apple’s move. Apple is the first company to reach a trillion dollars in market capitalization. While Apple has consistently outperformed analyst expectations, there are signs that iPhone growth is starting to level out.
While it remains unclear if iPhone sale growth will level out, it provides context for why Apple executives are exploring the healthcare space. The iPhone made up 56 percent of Apple revenue in Q3 2018. If sales growth were to slow, this would have a direct, and potentially significant impact, on Apple’s value. Moreover, because of Apple’s sheer size, there are very few markets big enough that they could sufficiently shift the needle for Apple. Enter healthcare.
The media coverage of Apple’s ECG announcement was predictably Apple-esque. From reading some media outlets’ coverage, you would be forgiven for thinking that Apple has revolutionized healthcare — that they have solved the healthcare problem.This could not be further from the truth.
Here, we distill three important factors in the Apple ECG announcement.
1. It is significant that Apple has been able to release a medical device and gain FDA clearance
Apple, Amazon, Alphabet — all of them have been spending considerable time and resources within the healthcare space. Apple is notable for now having achieved FDA clearance for an over-the-counter medical device. While the Apple announcement appears innovative on first -glance, a deeper analysis shows otherwise.
Regulation is an implicitly opposing force to innovation. That is not to say that the FDA or other medical device regulators have a cultural desire to oppress change, rather change must rightly be treated with a higher degree of scepticism where a patient’s life is at stake. The startup culture of “move fast and break things” is a juxtaposition to the careful, methodical, evidence-driven approach required within medical devices. Unfortunately, this has also historically led to poorer products. Companies who developed once innovative and world-changing products, have largely ceased to change or improve those products due to the perceived regulatory burden.
While there has been significant increase in the number of startups entering the healthcare and biotech space (nearly one third of the YCombinator S18 batch were healthcare-focussed), the entrance of Apple properly to the healthcare space will be a beacon for others (and not just startups). It will demonstrate that a large organization, with no prior experience in medical devices, can successfully build one and have it cleared by the FDA in a reasonable amount of time (while the media are discussing that it took only 30 days for the Apple FDA clearance, it appears that they have been working closely for several years).
That being said, what Apple has done with its new Apple Watch is not particularly innovative. Eric Topol, famed cardiologist, geneticist and Editor-in-Chief of Medscape writes on Twitter:
AliveCor has built a virtually identical product, with the only real differentiation being the now deeper integration with the Apple Watch. AliveCor achieved its first FDA clearance for prescription use in 2012. They followed this up with over-the-counter use in 2014. At this stage, the AliveCor product was built into the back of an iPhone case. Later in 2014, AliveCor added Atrial Fibrillation (AF) detection to its FDA clearance/ Finally, in 2017 AliveCor launched the Kardia Band, building ECG monitoring into the strap of the Apple Watch.
It is also notable that, when comparing the intended use of AliveCor and the Apple Watch FDA clearances, the intended use of AliveCor is significantly stronger. The Apple Watch ECG monitoring function is not intended for those with pre-existing arrhythmias, whereas the AliveCor product explicitly states that it can be used in this patient group. For Apple, the intended use states: “It is not intended to provide a notification on every episode of irregular rhythm suggestive of AFib and the absence of a notification is not intended to indicate no disease process is present; rather the feature is intended to opportunistically surface a notification of possible AFib when sufficient data are available for analysis.” There is no such caveat in the AliveCor intended use.
For startups approaching the regulated healthcare space, it is exciting but it is unclear whether this signals a shift in FDA thinking to be more supportive of innovation or whether Apple have been given special treatment.
2. Large-scale population screening could do more harm than good
AF is an abnormal heart rhythm, characterized by irregular contraction of the atria (two of the heart’s four chambers) and causes increased risk of, among others, stroke and death. The U.S. Centers for Disease Control and Prevention estimate that between 2.7 and 6.1 million people in the U.S. have AF.
Of significance, therefore, in the Apple announcement was the ability to alert the consumer to the possible presence of AF. On the face of it, this sounds like a fantastic idea. AF can be symptomless so by alerting the individual, they can consult their physician and potentially receive earlier treatment. The Apple Watch therefore potentially allows large-scale screening of the population to identify those with diagnosed AF.
However, to determine whether this is valuable for society, we must consider the possible downside. No screening test has 100 percent sensitivity (the percent of patients who have the condition but are not detected by the test) and 100 percent specificity (the percent of patients who do not have the condition but are detected by the test).
Any decision to undertake screening is a trade off between improving outcomes and saving lives due to earlier detection with causing harm and mental stress through inappropriate treatment due to false detection.
STAT News obtained a summary from the FDA of the two studies that were submitted as part of the Apple FDA clearance. The first study was completed on 580 people, 50 percent of whom had AF. In this study, Apple had a sensitivity of 98 percent and specificity of 99.6 percent . This sounds great, yes? But methodologically, Apple only considered those who either had confirmed AF or no arrhythmia at all.
In the second study, 266 patients from the Apple Heart Study were included whom the Apple Watch had detected an irregular heart rhythm. In the Apple Heart Study, after the Apple Watch detects a problem the patient is asked to wear the Apple Watch and a gold standard ECG for 7 days. During the subsequent monitoring period of the 266 patients, 41 percent had an irregular heart rhythm. In 71 percent of those cases, the Apple Watch also detected an issue. Thus, simply looking at sensitivity and specificity is insufficient as they hide the potential for significant over-diagnosis. Moreover, given Apple is targeting consumers – consumers who are likely to be younger and at lower risk – it is likely there will be a further bias to over-diagnosis in real use.
This could ultimately lead to further strain on an already strained healthcare system. The Healthcare Cost and Utilization Project (HCUP) shows a 14.8 percent increase in ER visits between 2006 and 2014. One analysis by Truven Health Analytics showed that as many as 71 percent % of ER visits may be avoidable. U.S. hospitals already face static reimbursement rates and extremely tight margins. Cleveland Clinic, for example, reported an 80 percent drop in operating income in Q2 2018. This is a multi-faceted problem and it is not solved by preventing a worried well, nor is it caused by a worried well.
The UK NHS, during the winter of 2017/2018, faced extreme and unprecedented pressure, particularly in the ER. Creating a worried well, may simply serve to tip this system over the edge. Those of us building medical technology surely have a responsibility beyond simple profit and share price. Surely, sustainable enterprise value within healthcare comes from creation of a product that enables sustainable healthcare?
Moreover, it has the potential to place strain on the consumer themselves. Inappropriate treatments may lead to consumers paying higher insurance premiums or other needless healthcare costs. While the opposite is also true, evidenced by the adoption by some health plans of the Apple Watch, it remains to be seen whether this would hold true if over-diagnosis became a common theme.
The U.S. Preventive Services Task Force (USPTF) reviewed the case for ECG screening in low risk adults and recommended against doing so. In medium-to high-risk adults, the USPTF found insufficient evidence to assess whether ECG should be used as a screening test.
This has already caused significant discussion among physicians. For example, John Mandrola, who is a Cardiac Electrophysiologist and writer for Medscape:
Eric Topol is similarly sceptical:
While David Shaywitz, an MD PhD turned VC, offers a more optimistic view:
What does make the Apple Watch announcement different is sheer scale. Apple has now sold over 2 billion iOS devices. No screening study has ever been conducted at the kind of scale possible with the Apple Watch. If Apple were to use this as a research tool, it will likely yield incredible new insights into at-risk patient groups. As such, it may transpire that the benefits do outweigh the risks. The challenge is that that is a significant unknown at present.
3. The consumerization of medical devices and healthcare will continue
Apple’s entrance should be a wake-up call to entrenched industry incumbents. Apple is now widely adopted across enterprise – not necessarily because of a specific enterprise choice, but because end-users forced adoption. They brought the products into the enterprise. This consumerization and flipping of the traditional medical device sales model is overdue and, we believe, will have a positive impact on patients and healthcare professionals alike.
The majority of medical devices and technology products used by healthcare professionals and patients on a daily basis offer poor user experiences. Most physicians feel that technology gets in their way. We find this particularly frustrating as technology should multiply the efforts of a human being, not inhibit their productivity. When a physician feels that the main stress on their job is use of technology products, then it is clear there is a problem that must be addressed.
B2B and B2C tech startups have consistently shown that an outstanding user experience is one differentiating factor in success. It is demonstrably clear that an amazing product can provide a clear advantage, while a poor product can lead to failure. That is not the case in healthcare.
We are seeing a clear and continuing shift in healthcare towards increased consumerization of products that, in the decades prior, were solely the purview of entrenched incumbents. We think this is a very important and necessary trend. User experience should not be a secondary consideration, but a driving focus of product development. User feedback should not be seen as a “complaint,” nor should it be handled solely as part of the regulatory affairs function. That this idea should be seen as a controversial view speaks to the conservativeness of the healthcare space.