Paradise Lost…or At Least, On Hold

For years, we’ve heard about how major technology companies and other industry powerhouses were entering the medical device and healthcare space. They were heralded as disrupters who would create a more affordable healthcare system, using techniques, technologies, and strategies learned serving other markets. In an age when the patient is taking more control of their healthcare, who better to provide them the tools to do so than companies accustomed to serving their needs in other ways?

Big tech’s promise of a better healthcare system seems to be more elusive than expected. Unfortunately, this seems to be the case when it comes to the aspirations of many of the tech giants and their ventures into the care delivery space. Sure, some progress has been made, but for the most part, the lofty goals of firms like Google, Apple, IBM, and others seems to be coming up short.

When I was first writing years ago about this influx of “outsiders” into the medtech community, I expected the regulatory hurdles to be the primary barrier to entry. Their success would be contingent on convincing the FDA they were quite familiar with the level of quality required to produce a product the agency would approve. I heard about strategic hires of regulatory professionals from major medtech firms who would help guide these companies’ efforts, helping ensure a successful pathway to market.

Unfortunately, we haven’t seen the forecasted big splashes. In fact, more headlines have been made highlighting the lack of success by these firms.

At the end of 2019, Verily—the healthcare arm of Google (i.e., Alphabet)—sold its stake in Verb Surgical to partner Johnson & Johnson. The firm exited the robotic surgery space after only four years.

Another much-ballyhooed effort by disruptive forces came to an end earlier this year. On Jan. 4, it was announced Haven—a joint venture between Amazon, Berkshire, and JPMorgan Health to overhaul employee healthcare—would cease operations. The effort produced few results and was little more than a test center for new ideas.

While IBM and its Watson artificial intelligence platform were destined to defeat cancer, reality tells a different tale. Some are saying the firm overpromised and underdelivered, while other articles have noted instances of incorrect “advice” Dr. Watson has provided regarding the disease.

Surely, the FDA can’t be to blame for these dramatic missteps; so what’s the issue? In reading a Forbes article from contributor Robert Pearl, M.D. (coincidently published on the same day as the Haven announcement), I may have found at least one substantial reason.

In discussing Apple’s lackluster impact on healthcare in 2020, Dr. Pearl said, “Apple has the technical knowhow, the AI expertise, and the physician-created algorithms to make chronic disease management a continuous, at-home thing rather than an intermittent, at-the-doctor’s-office thing. But the company offers no such device—not because they’re incapable but because they’re unwilling to assume the medical liability (risk) involved.”

Risk. Liability. Use whatever name you like, but I think Dr. Pearl nails it. I’m not sure these companies fully understood the regulatory hurdles they would face when making grand announcements about new innovations they would develop for the healthcare space. Further, and perhaps more importantly, I don’t think they fully comprehended the concept of risk as it relates to medical technologies. As a result, their grandiose innovations have not come to fruition.

In the Forbes article (Healthcare Report Card: Companies That Failed To Meet Expectations In 2020), Dr. Pearl goes on to give unimpressive marks to Amazon for its less-than-stellar efforts in Haven and Amazon Pharmacy, noting not much is expected from either in 2021 (and we now know why in the case of Haven). He also called out Walmart for its retail clinics, which he pointed out offer many services that could be handled via telehealth solutions—a more innovative initiative—but would allow patients to avoid browsing the store’s shelves.

Unfortunately, patients are the real losers in all of this. The promise of affordable healthcare driven by technology solutions is something everyone wants, from doctors to patients. The lack of success is a setback for these companies and their lofty goals, but moreso, it’s disappointing for anyone who may have benefited from real innovation in this space. Hopefully, the slow start by many of these “disrupters” is just that—an unexpected delay before we gain access to the true, promised innovations. Perhaps these firms will make a more significant mark on healthcare by partnering with the experts in the field, leveraging the experiences of both organizations to benefit all of us. 

Sean Fenske, Editor-in-Chief
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