Tech giants in healthcare: friend or foe?

Team Zorg Enablers
Published on

In the past decades, technology has been playing an increasingly important role in our everyday lives. Today, almost everyone carries a powerful computer in their pocket. And those are connected to a wristwatch more and more often. We have a computer at home and a tablet on the sofa. And if we need something, we can order it online within minutes. Such developments are partially driven by ever-expanding technological capabilities with a prominent role for technology giants. Some of the most famous ‘tech giants’ include Alphabet (Google), Amazon, Apple, Facebook and Microsoft. In 2020, these ‘Big Five’ generated over $1 billion in combined profits while employing around 1.6 million staff. Other tech giants include IBM, Alibaba, Samsung, Sony, Tencent, Huawei and Nvidia. Their applications can be found in all aspects of our society, such as in IT, (tele)communications, consumer electronics and e-commerce.

Tech giants are increasingly interested in healthcare

As interest and adoption of digital applications in society increases, so do opportunities for healthcare. More and more consumers and patients use digital applications to promote their health. And an increasing amount of (medical) data is being generated and information digitally collected, processed, stored and exchanged. The outbreak of the COVID-19 pandemic accelerated the digitisation process in healthcare. In addition, the global healthcare industry is one of the fastest growing and largest markets with a revenue of $8.5 trillion and a profit of $1.9 trillion in 2018. The revenue is expected to exceed $10 trillion by 2020 [1]. Healthcare costs are expected to be reduced by around $100 billion a year due to technological developments [2]. And tech giants are trying to claim their place in the healthcare market with all their might [3].

Alphabet, Amazon, Apple, Microsoft and others use their knowledge and skills in data and technological solutions to become an appealing partner. They focus on specific components, as illustrated in the infographic. Microsoft focuses mostly on cloud solutions for healthcare systems to help create ‘smart healthcare institutions’. They are getting fierce competition from Amazon and Alphabet [4]. Apple collects medical data for research through its wearables and Alphabet focuses on its AI expertise to make precision medication a success. Amazon spreads its efforts all across the board: from the pharmacy to delivery of medical equipment and telecare [5]. Every tech giant chooses its own strategy and develops a different services and product portfolio to distinguish themselves within the healthcare market. But the four largest tech giants are not the only players out there. Other tech giants such as IBM, Nvidia and Alibaba have their own strategies and portfolios to capture a share of the market.

Computer hardware giants IBM and Nvidia developed super computers called Watson and Cambridge-1 respectively. Over 10 years ago, super computer Watson even beat the ‘Jeopardy!’ champion, showcasing the potential of artificial intelligence. But the towering promises turned out to be over the top and IBM has failed to realise the intended impact with ‘Dr. Watson’ so far. A study by The Allen Institute did show that Watson performs at the same level or even better than the three major AI giants, Amazon, Google and Microsoft [6]. Nvidia launched its supercomputer in July 2021. Together with five major healthcare partners including GSK, AstraZeneca and the NHS, Nvidia wants to use the computational power of Cambridge-1 to gain a better understanding of dementia, drug development and genetics [2]. Samsung is also gradually trying to conquer its place in the healthcare market. The pulse meter in their new Galaxy Watch was FDA approved to make ECGs and has now been included in the Samsung Health Monitoring app [7]. Finally, more and more Asian tech giants are entering the healthcare market. Alibaba, the Asian e-commerce giant, and JD Health, the largest Chinese online health platform, are battling for market leadership in the Asian market. JD Health has its own pharmacies and physicians while Alibaba’s AliHealth is making concrete steps in healthcare by offering online health services [8].

Potential opportunities and threats posed by tech giants

The entry of tech giants into the healthcare industry offers both potential opportunities and threats. Healthcare is largely a logistic process where the patient travels to the physician or the other way around. Or data to the physician and the other way around. Services that made the tech giants could bring added convenience to the patient. And with the accelerated adoption of digital applications in society and healthcare, the growing mountain of (health) data and increased interest in the deployment of technologies such as artificial intelligence, big data and blockchain, the knowledge and skills of the tech giants on these topics may be of great added value.

With the steps taken by tech giants in the healthcare industry, they are significantly accelerating the development of data sharing technologies. As a result, much more useful data is available for the entire market. Examples include pharmaceutical companies that want to improve drug development and production. And the arrival of tech companies stimulates other (healthcare) players to innovate and refrain from relying on fixed (income) streams. In the United States, pharmacists are now looking for ways to keep attracting customers following Amazon’s introduction of a delivery service for prescriptions. And Alphabet is developing an ecosystem that can compete with the large players in the EPD industry [5].

The arrival of tech giants in healthcare also involves gigantic injections of capital intended to disrupt, something they have accomplished in industries such as retail and telco. They use their huge financial power to continue to grow horizontally as well as vertically. Figures show that the five largest tech giants (Alphabet, Amazon, Apple, Facebook, Microsoft) acquired a total of 869 businesses between 1987 and 2021, with the majority of these transactions taking place after 2010. In addition, tech giants invest in start-ups to keep a finger in the pie. The big five tech companies made over 1,500 such investments between 2010 and July 2020. Alphabet accounts for the vast majority: the company participated in at least 1,056 investment rounds, largely via their Google Ventures fund. An increasing proportion of these acquisitions and investments take place in the realm of healthcare [9]. This is just another example of the immense power wielded by these tech giants. Something that is also expressed in the degree to which we have come to depend on their digital services. This goes way beyond shiny phones, quick search queries or efficient meal delivery. All of society now runs on a digital infrastructure owned by just a couple of technology companies who are also its gatekeepers. If you want to build a health app that is actually being used, there is no way around Google and Apple: together, they supply the operating systems of around 99% of all smartphones and determine what apps are allowed on the platform. For example, Apple and Google found the French, British, German and Dutch corona apps to be insufficiently privacy-friendly and refused to support them. Google and Apple were imperturbable, even after a mediation attempt by the European Committee. So, Great Britain, Germany and the Netherlands built a new app to meet the ‘Gapple’ conditions [9].
Their data collection, management and analysis expertise has made tech giants into interesting collaboration for data-driven and personalised healthcare. In part because the tech giants’ consumer products collect a lot of (health) data about consumers. These new forms of collaboration can benefit things like medical research and can make healthcare more efficient, preventive and predictive [10]. But are these tech giants actually the right partners in this regard? For example, Amazon and Google fought a tough battle to become the hosting provider for Cerner and store 250 million medical files. Amazon ended up winning the battle [11]. In the past years, healthcare institutions and providers concluded various agreements with tech giants for storage, access and analysis of medical data. In some cases, depending on the terms of the agreements, tech giants have access to personally identifiable health information without the patient’s or physician’s consent. The prospect of tech giants collecting enormous amounts of medical files is cause for concern among legislators, patients and physicians. They fear that tech giants can use this personal data without the consumer’s knowledge or consent or in ways that they cannot anticipate. One example is the revelation of Google’s Project Nightingale, a partnership for data storage with Ascension health, which caused public outrage due to potential privacy violations. In short; trust in tech giants can be shaky when it comes to administering health data, though various studies come to different conclusions in this regard [12, 13].

In addition, these partnerships carry risks beyond data protection and privacy alone. Will these companies become gatekeepers of valuable health data sets that they themselves compile? What new biases may sneak their way into healthcare because certain technologies, such as iPhones, are only used by certain socio-economic segments of the population? What role will these companies, already so powerful in other sectors of society, play in shaping the agenda for the future of healthcare [15]? Examples of counter-movements to the tech giants’ power include the emergence of federated data models, something we wrote about last year [16]. The European Health Data Evidence Network (EHDEN) and its partners administer health data in 12 European countries for over 200 million patients in order to use patient data at large scale to generate new insights in healthcare, disease, treatment, medication and medical procedures [17].

Tech giants in healthcare: friend or foe?

Tech giants bring an enormous amount of innovative power to the table consisting of knowledge, skills and capital to accelerate the digital transformation of healthcare. The growing healthcare demand, staff shortage and changing social context and healthcare needs demand innovation, new healthcare supply and smart solutions. But the arrival of tech giants in healthcare is also associated with threats. Healthcare is complex and incomparable to the world of tech. But the fact remains that tech giants are making their mark. It is now up to the healthcare industry to either compete or collaborate and co-create with these new players.


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