Tech Brew Ride Home - (Bonus) Health Tech With CNBC's Christina Farr @chrissyfarr

Episode Date: January 19, 2019

This week had a lot of health tech news in it… a lot of it broken by CNBC’s health tech reporter Christina Farr. So, I reached out to Christina to chat, and we discussed Amazon getting into healthcare—possibly even getting into health insurance—what Apple’s health strategy is, where health tech might go beyond wearables and how the healthcare industry is responding to Silicon Valley invading their turf. This episode has a full transcript. Sponsor: Squarespace.com/listen Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to a bonus episode of the Tech Meme Right Home podcast. I'm Brian McCullough. This week had a lot of health tech news in it. And a lot of those stories were broken by CNBC's health tech reporter, Christina Farr. So I reached out to Christina to chat this week and we discussed Amazon getting into health care, possibly even getting into health insurance. What Apple's health strategy is, where health tech might be. go beyond wearables and how the healthcare industry is responding to Silicon Valley suddenly invading its turf.

But first, let me tell you about our sponsor. This bonus episode is being brought to you by Squarespace. From websites and online stores to marketing tools and analytics Squarespace is the all-in-one platform to build a beautiful online presence and run your business. You know you can use Squarespace to turn your cool idea into a business, showcase your work, blog, or even sell products, but they also have some cool new features. features. Say more, sell more, stand out in any inbox with Squarespace's email campaigns. Squarespace's all-in-one platform makes it easy to unify your brand voice from your homepage to your emails. The emails are

consistent from your website to someone's inbox. There are powerful editing tools and customizable layouts for any message, just like Squarespace's world-class website templates. And there's even mobile editing so you can send anytime, anywhere. Check out the new email campaigns by going to Squarespace.com slash listen for a free trial. And when you're ready to launch, use the offer code, listen, to save 10% off your first purchase of a website or domain. Squarespace.com forward slash listen and promo code listen at checkout. All right. Let's talk healthcare tech with CNBC's Christina Farr.

Thanks for having me. Let's get started with Amazon. on. The whole healthcare sector seems to be bracing for them to get into this space in a big way. But when we say that, are we imagining that this is going to happen this year, or is this something that is going to be happening over the next several years? That's a really interesting question. And I totally agree with you. There's definitely a lot of fear and anxiety within the healthcare industry right now of just what Amazon could do. I even saw some comments today from the CEO of CVS. You hilariously talked about how they could do anything Amazon

and could, including delivery of medication by drones, which is just a really funny thought. But, yes, so good question on timing. You know, it could be a very quick approach. It depends on what Amazon decides to do first. If they, for instance, if they decided that they wanted to tackle a market of people that increasingly are paying cash for their medicine, they could get into the whole supply chain very quickly through this pill pack acquisition that they made last year. But if they want to start working with the incumbents, with a group of companies called Pharmacy Benefits Managers, with insurers, I think it'll be much longer before they can do anything very meaningful.

Right, because the obvious vector here is just pure retail, you know, selling prescription medications and the like. But is there, do we get a sense? that Amazon has like a deeper goal, like a more ambitious strategy for health care? I honestly think the sky's the limit for them. I could definitely see them saying, well, why don't we form our own insurance company and PBM or pharmacy benefits manager offering? That would be a very big move into the industry. And it's totally plausible. I mean, they can start with their own employee population. Now they also have access to,

more employees through this partnership with Berkshire Hathaway and J.P. Morgan, and from there, they could kind of move on to the rest of the industry through the other large self-insured employers, I would assume. So that's one route for them. Or they could decide that they don't really want to do very much at all, except for continue to sell over-the-counter type pills, which they already do and other products, and try to get Alexa to be more of a health and wellness-focused device. So I think that's kind of at the least that they would do. But I do, I think something more ambitious has to come from Amazon. This is not a company that tends to do things just a little bit.

Right. Well, you mentioned Alexa and, you know, CES just happened, and it was all about, you know, smart gadgets and assistance and things like that. So that's another interesting vector here is the whole Alexa platform, how it can play into this as well. I mean, again, obviously they want you to buy things. using the smart speaker. But, I mean, when we're talking ambition,

are we also talking ambition like smart, like smart home diagnostics and testing for diseases at home too? Do we think that they've got their eye on that? Yeah, absolutely. And I actually did report that prior to buying Pillpack, the pharmacy delivery company, they were in talks to look at some diagnostics companies that do at home tests for basic,

things. And that would have fit into a really interesting strategy. You know, they, so imagine you got an Alexa home speaker and they filed a patent for Alexa to pick up on cough. So you're, you're coughing in your home and Alexa turns on and there's some way that through Alexa you can communicate with a physician about the fact that you're having this horrible cough. And, you know, perhaps they even then send something to your home or you can do a basic test. If the results come back immediately and they're positive, then, you know, through this whole system, you could have a prescription sent to your home. And really, I mean, I think that that is a vision for healthcare that means you do not even need to leave your home to access at least basic primary care services.

I do think that's very plausible that Amazon has a vision like that, and it's totally doable. Well, and then you did already mention that sort of whatever partnership it is with J.P. Morgan and Berkshire Hathaway. So health insurance obviously is a whole other kettle of fish. Everything in health care is complicated in terms of, you know, regulations and things like that. But so that was interesting what you said, that the obvious way for them to dip their toe in that water is to just begin with their own employees, learn what they can from that and then expand outward. Is that what we think they might be trying? Absolutely. And I was really interested to learn, and I also reported that they've got, they've decided to do a primary care clinic for their own employees. So they're actually going to get into the business of providing medical care if that plan rolls out.

So they would learn a lot from that, just in treating their own employee population. You could also use that as a space to potentially test devices and different medical software, all of which they've expressed interest in. So I think, you know, they will certainly do that with their own employees. And then they may start thinking in very innovative ways when it comes to health benefits. They could also try to offer things that are different than what their sort of insurance company that manages that population would traditionally do. And they have said, you know, with the other two companies that they're working with, that they want to improve healthcare quality while lowering costs. And I think the key to that,

technology. Do we know who the key executives are inside of Amazon that might be driving this push into healthcare? Like, has there been any key hires from, say, insurance companies or pharma or something like that that we're aware of? Oh, yeah, absolutely. They've been, you know, they've hired people, they've hired physicians. They've hired people like Missy Krasner, who, and healthcare investor, who went on

on to run all the health initiatives at Box. they've hired people out of insurance companies. They've been in talks with hiring people out of pharmacy and the pharmacy. I would guess that they're in the realm of dozens of people now with the healthcare background who work at Amazon. And they're across all sorts of different teams. Unlike some of the other tech companies, I don't see there being a very centralized strategy at Amazon of one person who's leading healthcare and telling everyone else what to do.

I think right now they've got lots of different groups who all have a different mandate within the space, and I think that will actually help them move more quickly. So that's a typical approach that Amazon employees when it's looking into a new area. Let's jump over to Apple because we're recording this on Wednesday. You broke the news this morning that sources are telling you that Apple is in talks with private Medicare plans about subsidizing the Apple Watch and bringing it to more at-risk seniors. They've done deals like that with other insurance companies before. When we talk about Apple moving into health care, do you think that they look at health features as something more than just a cool feature that will help sell additional watches and lock people into the ecosystem? Do you think that they're actually, again, envisioning a meaningful standalone business here? Yeah, I mean, I think that's something I'm still grappling with.

I'm sure there are some people within Apple who see it really as just a way to sell more devices. But at the very high levels among the executive team, I do sense a very real passion for the space. Jeff Williams, the company's CEO is the one who's really been leading the charge. And you see him out there saying, you know, we think that people should be empowered to have access to their health data, which is an important statement. And I think, you know, some of the things they've been doing around their sort of health. record service on the iPhone where you can get all your charts and your labs and so on. You know, that feels like a passion project from where I fit. And then going all the way back to then, you know, the former late CEO, Steve Jobs,

who was very sick in the last years of his life. And everything I've learned about him during that period is that he became very passionate about healthcare, so a lot of opportunities to improve it. And having spent his life dedicated to consumer experience and then to have to have this chapter of being very much involved in healthcare and seeing that really the consumer experience is no one's priority. I think that was a real wake-up call for him. And that kind of set the train in motion for Apple, you know, both to see the business case here,

but then also the reason to do it for just, you know, the good of mankind. On the gadget front, you know, again mentioning CES and there was a lot of wearables and things like that debuting. From the hardware and gadget site, is it all about wearables? Like, I think I read, you know, you think that blood pressure trackers are coming soon. Is that the interesting space in terms of hardware for the next 18 months or so? Absolutely. So within the biomedical space, there are two holy grail opportunities that people talk about a lot.

One of them is non-invasive and continuous blood pressure. And the other one is blood glucose. or blood sugar. And Apple and all the other companies are all looking at these. Apple's been working on blood sugar, you know, I've learned for a number of years. And I think that would actually catapult these devices from just kind of wellness, kind of entertainment products to must have tools for people with chronic disease. Because just imagine that, you know, for instance, blood pressure, we've never been able to really track blood pressure when you're asleep, which is a really important time, especially if you have hypertension. And the reason for that is because all we have

is a cuff that inflates. And can you imagine that just inflating every 20 minutes when you're trying to sleep? So, you know, a device like this that can do it in a way that wouldn't bother you, where it's fairly continuous, I think that's, you know, we haven't even begun to imagine what the implications are for that. It would be a very big deal if anyone could achieve it. Is there beyond wearables, is there something more, I don't know, maybe the word is invasive or something? Like in terms of actual hardware tech, like how far away are we from, you know, putting smart bots and stuff into our bloodstream and things like that? I mean, hopefully not too soon. That kind of thing freaks me out.

I'm sure, I mean, there have been people talking about this for a long time. You know, maybe one of the sort of themes that's popped up around wearables is they, I think was Sunny Vue from Misfit, who famously said they either need to be beautiful or invisible. And so people have talked about tattoos and things that you can swallow that could track, you know, you're all kinds of different things. One of the use cases that people have talked about is just making sure that people are taking their medicines and maybe there's a way to use a wearable that's quite invasive to do something like that. To me, that seems more in the realm of science fiction, and I'm just not sure who exactly that would help and why it would be used beyond being kind of an interesting biohacking experiment.

We haven't talked about another big player here from the tech world, which is alphabet and, you know, their verily, you know, big bet arm or whatever, however they describe those sorts of things. They just got a huge, I think, almost billion dollar outside investment infusion. Where is Alphabet trying to play in this space? Yeah, I mean, Alphabet also has massive designs for healthcare. And similarly to Amazon, it has teams scattered everywhere across the organization from this brain group that's looking at machine learning to Verily, which is basically their life sciences R&D group and many others. So I think this recent hire, a hospital CEO called David Feinberg, who's going to come into Google, I think the idea behind that is they want to consolidate a lot of these different teams and really figure out a strategy for what they want to do and how should they be using their resources most effectively.

Verily, as you pointed out, just raised a lot of money from Silver Lake. So I wouldn't be surprised if Verily became a bit more independent from the mothership. And I think they did imply that in the press release, that the money will give them more flexibility, more options. So I could see them kind of being operating a bit more kind of to the sidelines. Well, Google proper defines a strategy under one singular leader with a strong vision for what the company could do. Final question. I've been asking you all these questions about tech getting deeper into healthcare. but what about the existing players, you know, big pharma insurance companies?

What about them in the sense? It's sort of like when tech started getting into transportation and self-driving cars and EV, you know, the big three Detroit had to respond with their own plans and they have is a similar thing happening to the existing players, the legacy players, these huge players in this huge industry as the tech guys are trying to come play on their turf? It's absolutely what's happening. And last week I was at a big healthcare conference, the JP Morgan Conference, and everyone was talking about the patient experience, the customer experience, using digital tools

to engage. I mean, this was just not a topic that anyone particularly cared about a decade ago. So I think they, you know, even just the faint whisper of potential disruption from a technology player is forcing these incumbents to react. And you're seeing massive consolidation now across the industry with insurance companies teaming up with pharmacy benefits managers and so on. And I think, you know, that for them is a way to sort of protect their margins. and you will continue to see them react with their own plans to make sure that a company like Amazon or Google can't come along and do anything that might potentially dress in their own bottom line.

So what I'm hoping is that this is all going to ultimately be good for consumers because what these tech companies are known for is really putting a focus on the user experience and we could really use that in healthcare, a space where, you know, no one knows what the how good their doctor is or how much anything costs. I think there's just plenty of room for improvement there.