Apple Launching Clinics to Provide Employees Medical Care, Test Health Tech Products

Apple Launching Clinics to Provide Employees Medical Care, Test Health Tech Products

Apple is in the process of establishing a network of clinics near its California headquarters to provide primary health care services to its employees, CNBC reports:

This new primary care group — a group of clinical staff that is run independently from Apple but is dedicated to Apple employees — will initially only serve Apple’s employees in Santa Clara County, where its headquarters are located. Initially, it has two clinics in the county. Development appears to be well underway.

The initiative, called AC Wellness, will “offer a unique concierge-like healthcare experience for employees and their dependents,” according to its website. In addition to health care professionals, AC Wellness is hiring designers and analysts to help build and implement a preventive and behavioral health program, according to CNBC.

Part of the rationale for this project is undoubtedly to better manage health care costs at Apple, which has thousands of employees in California and 123,000 worldwide. The clinics appear to have a secondary purpose, however, as proving grounds for Apple’s consumer-facing health products:

Sources said the company will leverage its medical clinics as a way to test its growing range of health services and products, which it is starting to roll out to consumers at large. It is currently working with Stanford to study whether its Apple Watch can detect irregularities with the heart’s rhythm, an effort that would benefit from a huge population of healthy and sick patients.

Apple CEO Tim Cook recently told shareholders that it could make a “significant contribution” in health care.

AC Wellness, which is expected to launch this spring, comes at a time when major US companies are experimenting with innovative approaches using data and technology to help hold down the growing cost of health care. In January, Amazon, Berkshire Hathaway and JPMorgan Chase announced the establishment of a nonprofit entity dedicated to lowering health care costs for these three companies; if this initiative succeeds, other organizations may join the partnership in the future. The details of this experiment remain hazy, but the announcement hurt the stock prices of several major pharmacy benefit managers, health insurance companies, and biotechnology firms, all of which would stand to lose revenue if these large health care buyers took greater advantage of their bargaining power or even moved some of their health care services in-house.

Meanwhile, the enterprise health and wellness technology market is expanding, so it makes sense for Apple to try to grab a piece of the growing pie. Fitbit, the leading manufacturer of wearable fitness trackers (and the Apple Watch’s chief competitor), recently signaled its focus on the enterprise market with the acquisition of Twine Health, a cloud-based health coaching platform for employers.