I covered an overview of trends for 2014 in my last post. I hedged a bit because there are some very broad trends on that list. Hopefully this series of posts will add additional detail to what we’re betting on for 2014. This post covers the not-so-new trend of successful apps evolving into platforms.
Everybody loves platforms. We’re a platform company too, a backend platform for health apps. Platforms can be very powerful and disruptive, but can also be challenging to sell without specific solutions pre-built on the platform. Also, as people build applications they may automate or create reusable components that will later turn into a platform offering. And dogfooding your own platform while building solutions is the best way to test and refine a platform.
The shift from app to platform isn’t unique to digital health. Twitter started as an app that’s now a platform. Facebook is very similar. So is Salesforce. The list goes on and on to include others like Netflix and Spotify. Even the Pebble watch is a wrist-based platform now. There a lots of examples; too many to mention here actually.
Platforms expand the functionality and value by integrating 3rd party apps and data. This is almost always done today with APIs. Once apps grow large enough in terms of adoption and user base, opening up an API and becoming a platform makes sense because 1) it adds value and stickiness for current users, 2) it opens up revenue streams through transaction fees for 3rd party apps (think Apple’s 30% for app purchases in the iOS or Mac App Store), and 3) it’s attractive to 3rd parties because they have a decent base of customers to target.
In digital health the battle to be the platform is usually about aggregating data. Today we see two main buckets of platform players emerging in health and wellness - the electronic medical records (EMRs) and the quantified self companies. There are some exceptions to the rule, but generally these buckets cover the platforms that are leading the way.
On the EMR/EHR side of things, several vendors opened^1 up APIs and app stores last year. The biggest players that made waves were Athena, Greenway, and Allscripts. The value for EHRs is quite clear - EHRs sit on the clinical data for organizations and 3rd party apps can theoretically add value to patients, admins, and providers. In the process EHRs secure their place as the center of the enterprise health IT universe, or the mothership. The biggest challenge is that EHRs store tons and tons of data, and exposing it is a meaningful way is hard. If you look at API documentation for EHRs, it is resource based and very hard for a developer to use.
The other major challenge for EHRs is that they were built for the past, and still mostly current, paradigm in healthcare - episodic care. As more organizations shift paradigms to risk based business models (ACOs, capitation, etc), are EHRs the platforms of choice to serve as the foundation for models of care for which they weren’t intended or architected? It’s a good question, and a debate that will heat up over the next several years.
The one other EHR to note in this discussion is Epic. Epic made some press last fall when it announced the launch of open.epic. The site today simply lists the companies that have integrated with Epic. Going forward, the idea is to enable vendors API access to Epic for writing data to Epic. It is unclear whether APIs will be open to read data from Epic. It’s an interesting departure for Epic as it has stated (I’ve personally heard Epic people say this) that Epic doesn’t have partners, it has customers. It remains to be seen if open.epic will enable partnerships, or just be a new version of the existing model where vendors have to sell to Epic customers, then have those customers get/pay Epic to open up an interface.
The other category of apps, other than EHRs, in heathcare that have evolved to platforms are on the quantified self side, or patient data reporting/collection side. The platforms here are trying to integrate data from as many self reported devices and apps as they can. The major players on that side right now are Fitbit, which keeps raising tons of money for its vision, and Runkeeper with its Healthgraph API. There are others smaller players like Nike, Jawbone, LoseIt!, and MapMyFitness (acquired by Under Armour for $150 million in 2013) that are making similar transitions. Aetna has made a big push into this area with its CarePass platform. Currently this category is primarily used by the motivated healthy, who are not the main drivers of healthcare cost. We are starting to see pilots of some of these apps and platforms with payers and health systems. In 2014 we’ll see more of these pilots, and more 3rd party integrations with these platforms.
The other major platform plays in digital health are 1) Healthtap and Zocdoc on the consumer side and 2) Doximity^2 on the provider side. The major difference with these platforms is the power of the platform is less about health or wellness data and more about the number of users. In certain ways, they are doing what Facebook did in going from a network to a platform.
In 2014 it’s unlikely we’ll see much in the way of cross mingling between these different categories of platforms but we’ll see. All of them will be pushing to get data into and out of other domains (quantified self to EHR and vice versa). And we’ll like see a few more successful apps go the platform route in 2014.
1 Open” is used loosely here. Most EHR vendors with APIs or app stores are not open in the same way that Facebook or Twitter are open. This is usually by design, as the data is much more sensitive and ownership of data can get murky. With EHRs, “open” usually means apply and do a manual review.
2 Doximity started with a clear platform and network vision so it’s not quite the same as an app app, like Runkeeper for example, that evolved to a platform, though it is still early with its API.