Apple (NASDAQ:AAPL) recently announced its iOS 8 operating system, replete with new features that continue the proliferation of the Internet of Things. One new built in feature, HealthKit, will enable users to compile data from all of their wearable devices and fitness trackers into one single view of their health and wellness. Those data can then be uploaded or synced with electronic health records from Mayo Clinic or Epic Systems, the privately-held market-leading distributor of electronic health records software, giving doctors a more complete picture of their patients' lifestyles.
The feature has the potential to be hugely successful as wearable technology explodes with FitBits, FuelBands, smart watches, and smart contact lenses. That's right -- smart contact lenses. Not surprisingly, Google (NASDAQ:GOOG) (NASDAQ:GOOGL) has dug its feet into the wearable health care tech industry, with an investment in contact lenses capable of testing blood sugar in real time. With 25 million Americans suffering from diabetes, a convenient, continuous, and comfortable solution to blood sugar maintenance could greatly improve patient compliance.
In the short term, the big unknown for investors will be the adoption of wearable tech and health apps by the public. It seems likely, at first, that these healthy living tools will only be adopted by those that are already health conscious, and therefore not make a huge impact on our health care economy. Adoption by the general public will require some proactive engagement on the part of health care providers to encourage their use in high risk patients.
That's the vision laid out in Jonathon Bush's new book Where Does it Hurt?. It's also the market opportunity for his cloud-based health IT company, athenahealth (NASDAQ:ATHN). While some might disagree with his right-leaning vision for a competitive health care market, Bush's model is grounded in an apolitical belief that technology can improve the health care economy. Technology -- from wearable devices to electronic health records and cloud-based insurance reimbursements -- has the power to slash health care costs by disrupting the expensive hospital-centric model, placing a renewed focus on primary and preventative care.
Athenahealth empowers small medical practices by providing back office operations and electronic health records through several cloud-based applications. Unlike Epic, which sells software systems that are "siloed" within closed networks, athena's records and services are accessible from any internet connection, and don't require expensive hardware. Leveraging its athenaNet, athena can facilitate the seamless exchange of information between payers, providers, and patients, and earns a cut of each practice's savings. As athenaNet grows, Bush hopes it will become a primary backbone of health care information exchange, where developers can design applications to upload, source, and distribute data throughout the network.
I remain torn on the impact of Apple's personal health apps on athenahealth's business. On the one hand, the apps promote an interconnectedness of health data that empowers patients and primary care providers. That's great for Bush's vision of disrupting the reactionary hospital model. On the other hand, Apple's cloud prowess and developer-friendly platform could undermine the utility of athenaNet, the crowning achievement of the company's future. After all, one goal of athena is to serve as the app store of a health care internet, and I'd rather not compete with Apple in app development.
The bottom line
For Apple and Google, the sky is the limit. Healthcare sits at the nexus of wearable technology, the Internet of Things, and cloud computing, and both tech behemoths are poised to revolutionize the industry.
It seems for athenahealth the best course of action is to embrace Apple's new contribution to health care. The market for athena's offerings is still in its infancy, and while Apple's HealthKit may evolve into its own health care ecosystem, it may well precipitate the expansion of athena's market as well.
Apple's next smart device may be even more shocking
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!
Seth Robey owns shares of Apple. The Motley Fool recommends Apple, Athenahealth, Google (A shares), and Google (C shares). The Motley Fool owns shares of Apple, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.