3 Key Building Blocks Of Apple's Health Care Quest

Apple Inc AAPL has forayed into the healthcare sector in a small way, with health features in its products and apps.

On Wednesday, a report in Wall Street Journal said an internal project of Apple, codenamed Casper, is exploring the possibility of setting up an Apple primary care network.

Apple analyst and Loup Ventures Managing Partner Gene Munster sees this as unlikely and instead sees Apple's health ambitions anchored on devices and data that can be leveraged by clinicians for care.

Apple's health initiatives, Munster said, will be made of three building blocks: data capture, data sharing and delivering care.

FDA-grade Accuracy Key to Data Capture: Apple's primary health offering is data capture through the Watch, which measures heart rate, atrial fibrillation, blood oxygen levels, ECG, and fall detection.

Watch is likely to evolve as a data collection device with blood pressure and blood glucose monitoring being the next logical features. Munster also sees scope for increasing Watch adoption.

"We estimate around 13% of iPhone users are Watch users, and believe this can rise to more than 40% over time," Munster said.

Watch, the analyst said, has a Class II designation from the FDA for its atrial fibrillation feature. Class II certifications have yet to be secured for other Watch features, including general heart rate and blood oxygen monitoring, he added.

"The core question is whether Apple engineers can deliver FDA-grade data accuracy across the spectrum of Watch features," Munster said.

Related Link: 5 Features From Apple WWDC's First Day That Stand Out To Gene Munster

Apple's Expertise Should Help In Data Sharing: Data sharing, which is analogous to APIs and middleware, is an essential layer between the data capture device and third-party healthcare providers, such as physicians, insurers, and the broader primary care network, Munster said.

Apple's expertise in devices, software, privacy and security makes this opportunity well within the company's reach, he added.

Care Delivery: The final layer in an integrated health stack, according to Munster, is delivering care itself. This essentially is the interaction with a physician, he noted, and what Apple's Casper project aims to accomplish.

It's unlikely Apple ultimately offers a primary care network, given it rests outside the company's hardware-software-services purview, Munster said.

If it does decide to take a plunge, Apple has the resources, but there is an opportunity cost in going down the road of providing lower-margin services, he added.

At last check, Apple shares were up 0.85% at $131.23.

(Photo: Apple)