Why are companies like Apple and Amazon creating medical clinics for their employees?

Posted on September 10, 2018

CNBC health and tech reporter, Christina Farr, published a great piece over the weekend that looks into the wave of tech companies creating their own medical clinics for employees. 

We've written about Apple creating clinics, but didn't dig into the reasons why tech companies are doing it. Farr did. 

Here's a summary of her report:

1. To control health costs

"Employers generally have become extremely frustrated about the enormous expense of the healthcare system as well as the inconsistent, at best, quality experienced by their employees," explains Micah Weinberg, president of the Bay Area Council Economic Institute, a think tank focusing on local policy issues. "So seeing our two 'trillion dollar' companies making this investment is not shocking." (Both Amazon and Apple recently reached the elusive trillion-dollar market cap).

"If you want something done right," he said, "you have to do it yourself."

2. To test new products without risking leaks

"If Amazon and Apple had considered these clinics for internal use only, they would have likely outsourced to any of the number of clinics that offer on-site clinic services," said Nikhil Krishnan, a health-focused analyst with CB Insights, a market research firm. "The fact that Apple and Amazon are testing it in-house means they want to test the model with employees, iterate, and eventually release this product to their respective customers."

Jami Doucette, president of Premise Health, a company that helps run employer medical clinics, agrees. "Both groups are using themselves as a test group to learn more quickly, work out the kinks more rapidly, and bring a solution to market in a shorter timeframe," Doucette said.

3. Money, money, money

According to Micah Weinberg, health care is "devilishly complicated." In his experience, those that do succeed will be richly rewarded, while having an opportunity to make a difference. And one of the best ways to get there, says Weinberg, is to get into the business of both patient care and population health management, which includes tools to keep a population of patients as healthy as possible.

Farr put out a poll on Twitter to find out what healthcare and tech enthusiast think:

Clearly controlling costs is the most obvious answer, but while these companies are helping their bottom line, they are also getting the opportunity to better understand healthcare costs and potentially use that information to create healthcare tech to solve the issues they uncover. 

One thing remains clear, tech and health are on a collision course and every major tech company is looking for ways to improve the system and monetize opportunities they uncover along the way. 

In case you haven't, give Christina Farr a follow on Twitter.