Apple Inc. (NASDAQ:AAPL) wants to give you a free Apple Watch, but it wants a little something in return-your entire health records. That appears to be the headline in a deal that the firm is trying to make with insurance firm Aetna. The existence of the talks was reported by CNBC on Monday evening.
Tim Cook and his team are still having trouble finding a place for the Apple Watch in the modern world. The $270 wearable is not a replacement for a phone, and it’s a whole lot less useful than one. Despite that, sales are increasing, but it’s just not enough to make a difference for shareholder.
In order to make the Apple Watch a significant part of the business, something dramatic needs to happen. That kind of drama could very well come from a deal with a big insurer like Aetna.
Apple Inc. wants to make insurance cheaper
If Apple Inc. can’t offer something of value in the Watch to consumers, it reckons that health insurers might be an alternative option. According to the sources that spoke to CNBC about the deal, Aetna is looking to supply the devices for free or at a discount to its 23 million insurance customers.
The reason that’s a good idea to Aetna? Knowing the daily biometrics of an insurance patient is likely a good way to detect diseases early. In general prevention is less expensive than the cure, and early intervention could save firms like Aetna a whole lot of money.
As Apple Inc. (NASDAQ:AAPL), and other tech firms, develop monitoring devices that are more sophisticated they could become invaluable not only for patients, but also for the insurance firms that pay for their care. Like an alarm on a car, a sugar level monitor always attached to a diabetes patient could reduce risk and therefore premiums.
That’s the theory at least, though it’s not clear how it’s going to work in practice. The sources who spoke to CNBC did not have the specifics of what a final deal might look like. There are some interesting possibilities going forward. Going with the car alarm analogy, the big difference could be that between a traditional alarm, OnStar, and constant monitoring, the likely future of anti-theft tech.
Apple Inc. may not want your data
In the simplest form, Apple Inc. (NASDAQ:AAPL) may not look for your data at all. Instead the firm may just offer the sensors to insurance firms who work with doctors to make use of them. In this case the Apple Watch would only really be useful for keeping track of specific metrics.
This could be very useful in, for example, allowing patients to monitor weight loss, heart rate and other simple biometrics. As Apple improves the sensors on the device it may be able to offer all sorts of new tech to increase the variety of applications.
In this case, Apple will never see your health data. The insurance provider does, in the “traditional car alarm” model, reckon there’s a greater chance your overall health is being monitored, however.
If we’re looking at the way car alarms have developed over the last couple of decades, very few people are likely convinced that a tech firm, with access to so much data, could possibly stop at that point.
OnStar, or tracking on demand
This is a likely option that balances between the most an least invasive ideas. For OnStar style monitoring, Apple will be taking your data, but only if you’re really sick. This might go for hospital inpatients, or people who are chronically ill. That is those likely at risk of complications are health crises.
This seems like a very likely goal for Apple in the short to medium term. We know that the firm is already trying to get its iPad into hospitals, and that the firm has been nosing around in the medical records world. This sort of application for the Watch has been talked about even longer than the device has been on the market, in fact.
What’s the problem then? Data collection isn’t easy, and hospitals can’t do it reliably on their own. Apple is really bad at supplying big businesses with services. In the commercial software world it’s well behind the likes of Microsoft Corporation. That means that the value actually added by the Watch is pretty minimal. Even the iPhone gets a large portion of its value from Apple software support.
Therefore, the connection with Aetna could be perfect. Insurance companies are already well used to using data and analytics to squeeze out a greater profit. That means they could fill this gap for practitioners and hospitals. On the other hand if Apple really wants to make a difference it could try something a whole lot more dramatic.
Apple Inc. could become a health data goldmine
The future of the car alarm probably involved your provider calling you if you massively change your patterns. This style of “two factor authorization” is already used for email and many other security applications. It’s similar to OnStar, but it differs in one key respect. Your data is always being monitored.
This is the most expansive style of medical data collection Apple could implement. Instead of simply monitoring the sick, this would involve monitoring everyone. With an advanced, and learning, AI behind the data collection, the firm may be able to predict when people need medical intervention.
It’s difficult to predict how successful a program like that might be. What’s clear about it though, is that it’s the way Apple could add the most value to the Watch. If the firm can turn the device into a service that helps insurers save money, it could become a major hit.
The healthcare market makes up about a sixth of the US economy as a whole. Though start ups are ridiculed when they talk about getting “just 1 percent” of a market, Apple Inc. (NASDAQ:AAPL) may actually be in striking distance.
The question for insurance buyers is: are you comfortable handing your health data to Apple? While it’s true that the firm doesn’t really use data for ads, there’s something odd about just handing it over.
There’s likely to be some resistance to the idea, but if it can prove the value, and promise health benefits, it’s almost certain that people will jump at the Watch.