Great Anaysis from Steve Blank on Apple Watch 4
The Apple Watch – Tipping Point Time for Healthcare
Posted on September 26, 2018 by steveblank
I don’t own an Apple Watch. I do have a Fitbit. But the Apple Watch 4 announcement intrigued me in a way no other product has since the original IPhone. This wasn’t just another product announcement from Apple. It heralded the U.S. Food and Drug Administration’s (FDA) entrance into the 21stcentury. It is a harbinger of the future of healthcare and how the FDA approaches innovation.
Sooner than people think, virtually all home and outpatient diagnostics will be performed by consumer devices such as the Apple Watch, mobile phones, fitness trackers, etc. that have either become FDA cleared as medical devices or have apps that have received FDA clearance. Consumer devices will morph into medical grade devices, with some painful and well publicized mistakes along the way.
Let’s see how it turns out for Apple.
Smartwatches are the apex of the most sophisticated electronics on the planet. And the Apple Watch is the most complex of them all. Packed inside a 40mm wide, 10 mm deep package is a 64-bit computer, 16gbytes of memory, Wi-Fi, NFC, cellular, Bluetooth, GPS, accelerometer, altimeter, gyroscope, heart rate sensor, and an ECG sensor – displaying it all on a 448 by 368 OLED display.
When I was a kid, this was science fiction. Heck, up until its first shipment in 2015, *it was *science fiction.
But as impressive as its technology is, the Apple’s smartwatch has been a product looking for a solution. At first, positioned as a fashion statement, it seemed like the watch was actually an excuse to sell expensive wristbands. Subsequent versions focused on fitness and sports – the watch was like a Fitbit– plus the ability to be annoyed by interruptions from your work. But now the fourth version of the Watch might have just found the beginnings of “gotta have it” killer applications – healthcare – specifically medical diagnostics and screening.
Healthcare on Your Wrist Large tech companies like Google, Amazon, Apple recognize that the multi-trilliondollar health care market is ripe for disruption and have poured billions of dollars into the space. Google has been investing in a broad healthcare portfolio, Amazon has been investing in pharmacy distribution and Apple…? Apple has been focused on turning the Apple Watch into the future of health screening and diagnostics.
Apples latest Watch – with three new healthcare diagnostics and screening apps – gives us a glimpse into what the future of healthcare diagnostics and screening could look like.
The first new healthcare app on the Watch is *Fall Detection. *Perhaps you’ve seen the old commercials where someone falls and can’t get up, and has a device that calls for help. Well this is it – built into the watch. The watch’s built-in accelerometer and gyroscope analyze your wrist trajectory and impact acceleration to figure out if you’ve taken a hard fall. You can dismiss the alert, or have it call 911. Or, if you haven’t moved after a minute, it can call emergency services, and send a message along with your location.
If you’re in Apple’s current demographic you might think, “Who cares?” But if you have an aged parent, you might start thinking, “How can I get them to wear this watch?”
The second new healthcare app also uses the existing optical sensor in the watch and running in the background, gathers heart data and has an algorithm that can detect irregular heart rhythms. If it senses something is not right, up pops up an alert. A serious and common type of irregular heart rhythm is atrial fibrillation (AFib). AFib happens when the atria—the top two chambers of the heart get out of sync, and instead of beating at a normal 60 beats a minute it may quiver at 300 beats per minute.
This rapid heartbeat allows blood to pool in the heart, which can cause clots to form and travel to the brain, causing a stroke. Between 2.7 and 6.1 million people in the US have AFib (2% of people under 65 have it, while 9% of people over 65 years have it.) It puts ~750,000 people a year in the hospital and contributes to ~130,000 deaths each year. But if you catch atrial fibrillation early, there’s an effective treatment — blood thinners.
If your watch gives you an irregular heart rhythm alert you can run the third new healthcare app – the Electrocardiogram.
The *Electrocardiogram *(ECG or EKG) is a visual presentation of whether your heart is working correctly. It records the electrical activity of the heart and shows doctors the rhythm of heartbeats, the size and position of the chambers of the heart, and any damage to the heart’s muscle. Today, ECGs are done in a doctor’s office by having you lie down, and sticking 10 electrodes to your arms, legs and chest. The heart’s electrical signals are then measured from twelve angles (called “leads”).
With the Apple Watch, you can take an ECG by just putting your finger on the crown for 30 seconds. To make this work Apple has added two electrodes (the equivalent of a single lead), one on the back of the watch and another on the crown. The ECG can tell you that you may have atrial fibrillation (AFib) and suggest you see a doctor. As the ECG is saved in a PDF file (surprisingly it’s not also in the HL7’s FHIR Format), you can send it to your doctor, who may decide no visit is necessary.
These two apps, the Electrocardiogram and the irregular heart rhythms, are serious health screening tools. They are supposed to ship in the U.S. by the end of 2018. By the end of next year, they can be on the wrists of tens of millions of people.
The question is are they are going to create millions of unnecessary doctors’ visits from unnecessarily concerned users or are they going to save thousands of lives? My bet is both – until traditional healthcare catches up with the fact that in the next decade screening devices will be in everyone’s hands (or wrists.)
**Apple and The FDA – **Clinical TrialsIn the U.S. medical devices, drugs and diagnostics are regulated by the Food and Drug Administration – the FDA. What’s unique about the Apple Watch is that both the Electrocardiogram and the irregular heart rhythms apps required Apple to get clearance from the FDA. This is a very big deal.
The FDA requires evidence that medical devices do what they claim. To gather that evidence companies enroll volunteers in a study – called a clinical trial – to see if the device does what the company thinks it will.
Stanford University has been running a clinical trial on irregular heart rhythms for Apple since 2017 with a completion date in 2019. The goal is to see if an irregular pulse notification is really atrial fibrillation, and how many of those notified contacted a doctor within 90 days. (The Stanford study appears to be using previous versions of the Apple Watch with just the optical sensor and not the new ECG sensors. They used someone else’s wearable heart monitor to detect the Afib.)
To get FDA clearance, Apple reportedly submitted two studies to the FDA (so far none of the data has been published or peer reviewed). In one trial with 588 people, half of whom were known to have AFib and the other half of whom were healthy, the app couldn’t read 10% of the recordings. But for the other 90%, it was able to identify over 98% of the patients who had AFib, and over 99% of patients that had healthy heart rates.
The second data set Apple sent the FDA was part of Stanford’s Apple Heart Study. The app first identified 226 people with an irregular heart rhythm. The goal was to see how well the Apple Watch could pick up an event that looked like atrial fibrillation compared to a wearable heart monitor. The traditional monitors identified that 41 percent of people had an atrial fibrillation event. In 79 percent of those cases, the Apple app also picked something up.
This was good enough for the FDA.
The FDA – Running Hard to Keep Up With Disruption
And “good enough” is a big idea for the FDA. In the past the FDA was viewed as inflexible and dogmatic by new companies while viewed as insufficiently protective by watchdog organizations.
For the FDA this announcement was as important for them as it was for Apple.
The FDA has to adjudicate between a whole host of conflicting constituents and priorities. Its purpose is to make sure that drugs, devices, diagnostics, and software products don’t harm thousands or even millions of people so the FDA wants a process to make sure they get it right. This is a continual trade-off between patient safety, good enough data and decision making, and complete clinical proof. On the other hand, for a company, a FDA clearance can be worth hundreds of millions or even billions of dollars. And a disapproval or delayed clearance can put a startup out of business. Finally, the rate of change of innovation for medical devices, diagnostics and digital health has moved faster than the FDA’s ability to adapt its regulatory processes. Frustrated by the FDA’s 20th century processes for 21st century technology, companies hired lobbyists to force a change in the laws that guide the FDA regulations.
So, the Apple announcement is a visible signal in Washington that the FDA is encouraging innovation. In the last two years the FDA has been trying to prove it could keep up with the rapid advancements in digital health, devices and diagnostics- while trying to prevent another Theranos.
Since the appointment of the new head of the FDA, there has been very substantial progress in speeding up mobile and digital device clearances with new guidelines and policies. For example, in the last year the FDA announced its Pre-Cert pilot program which allows companies making software as a medical device to build products without each new device undergoing the FDA clearance process. The pilot programallowed nine companies, including Apple, to begin developing products (like the Watch) using this regulatory shortcut. (The FDA has also proposed new rules for clinical support software that say if doctors can review and understand the basis of the software’s decision, the tool does not have to be regulated by the FDA.)
This rapid clearance process as the standard – rather than the exception – is a sea-change for the FDA. It’s close to de-facto adopting a Lean decision-making process and rapid clearances for things that minimally affect health. It’s how China approaches approvals and will allow U.S. companies to remain competitive in an area (medical devices) where China has declared the intent to dominate.
Did Apple Cut in Front of the Line? Some have complained that the FDA has been too cozy with Apple over this announcement.
Apple got its two FDA Class II clearances through what’s called a “de novo” pathway, meaning Apple claimed these features were the first of its kind. (It may be the first one built *into *the watch, but it’s not the first Apple Watch ECG app cleared by the FDA – <u>AliveCor</u>, got over-the-counter-clearance in 2014 and Cardiac Designs in 2013.) Critics said that the De Novo process should only be used where there is no predicate(substantial equivalence to an already cleared device.) But Apple cited at least one predicate, so if they followed the conventional 510k approval process, that should have taken at least 100 days. Yet Apple got two software clearances in under 30 days, which uncannily appeared the day before their product announcement.
To be fair to Apple, they were likely holding pre-submission meetings with the FDA for quite some time, perhaps years. One could speculate that using the FDA Pre-Cert pilot program they consulted on the design of the clinical trial, trial endpoints, conduct, inclusion and exclusion criteria, etc. This is all proper medical device company thinking and exactly how consumer device companies need to approach and work with the FDA to get devices or software cleared. And it’s exactly how the FDA should be envisioning its future.
Given Apple sells ~15 million Apple Watches a year, the company is about to embark on a public trial at massive scale of these features – with its initial patient population at the least risk for these conditions. It will be interesting to see what happens. Will overly concerned 20- and 30-year-olds flood doctors with false positives? Or will we be reading about lives saved?
Why most consumer hardware companies aren’t medical device and diagnostic companies Historically consumer electronics companies and medical device and diagnostic companies were very different companies. In the U.S. medical device and diagnostic products require both regulatory clearance from the FDA and *reimbursement *approval by different private and public insurers to get paid for the products.
These regulatory and reimbursement agencies have very different timelines and priorities than for-profit companies. Therefore, to get FDA clearance a critical part of a medical device company is spent building a staff and hiring consultants such as clinical research organizations who can master and navigate FDA regulations and clinical trials.
And just because a company gets the FDA to clear their device/diagnostic/software doesn’t mean they’ll get paid for it. In the U.S. medical devices are reimbursed by private insurance companies (Blue Cross/Blue Shield, etc.) and/or the U.S. government via Centers for Medicare & Medicaid Services (CMS). Getting these clearances to get the product covered, coded and paid is as hard as getting the FDA clearance, often taking another 2-3 years. Mastering the reimbursement path requires a company to have yet another group of specialists conduct expensive clinical cost outcomes studies.
The Watch announcement telegraphed something interesting about Apple – they’re one of the few consumer products company to crack the FDA clearance process (Philipsbeing the other). And going forward, unless these new apps are a disaster, it opens the door for them to add additional FDA-approved screening and diagnostic tools to the watch (and by extension a host of AI-driven imaging diagnostics (melanoma detection, etc.) to the iPhone.) This by itself is a key differentiator for the Watch as a healthcare device.
The other interesting observation: Unlike other medical device companies, Apple’s current Watch business model is <u>not </u>dependent on getting insurers to pay for the watch. Today consumers pay directly for the Watch. However, if the Apple Watch becomes a device eligible for reimbursement, there’s a huge revenue upside for Apple*. *When and if that happens, your insurance would pay for all or part of an Apple Watch as a diagnostic tool.
(After running cost outcome studies, insurers believe that preventative measures like staying fit brings down their overall expense for a variety of conditions. So today some life insurance companies are *mandating *the use of an activity tracker like Apple Watch.)
The Future of SmartWatches in Healthcare Very few companies (probably less than five) have the prowess to integrate sensors, silicon and software with FDA regulatory clearance into a small package like the Apple Watch.
So what else can/will Apple offer on the next versions of the Watch? After looking through Apple’s patents, here’s my take on the list of medical diagnostics and screening apps Apple may add.
Sleep Tracking and Sleep Apnea Detection Compared to the Fitbit, the lack of a sleep tracking app on the Apple Watch is a mystery (though third-party sleep apps are available.) Its absence is surprising as the Watch can theoretically do much more than just sleep tracking – it can potentially detect Sleep Apnea. Sleep apnea happens when you’re sleeping, and your upper airway becomes blocked, reducing or completely stopping air to your lungs. This can cause a host of complications including Type 2 diabetes, high blood pressure, liver problems, snoring, daytime fatigue**. Today diagnosing sleep apnea often requires an overnight stay in a sleep study clinic. **Sleep apnea screening doesn’t appear to require any new sensors and would be a great app for the Watch. Perhaps the app is missing because you have to take the watch off and recharge it every night?
Pulse oximetry Pulse oximetry is a test used to measure the oxygen level (oxygen saturation) of the blood. The current Apple Watch can already determine how much oxygen is contained in your blood based on the amount of infrared light it absorbs. But for some reason Apple hasn’t released this feature – FDA regulations? Inconsistent readings? Another essential Watch health app that may or may not require any new sensors.
Respiration rate Respiration rate (the number of breaths a person takes per minute) along with blood pressure, heart rate and temperature make up a person’s vital signs. Apple has a patentfor this watch feature but for some reason hasn’t released it – FDA regulations? Inconsistent readings? Another essential Watch health app that doesn’t appear to require any new sensors.
Blood Pressure About 1/3rd of Americans have high blood pressure. High blood pressure increases the risk of heart disease and stroke. It often has no warning signs or symptoms. Many people do not know they have it and only half of those have it under control. Traditionally measuring blood pressure requires a cuff on the arm and produces a single measurement at a single point in time. We’ve never had the ability to *continually monitor *a person’s blood pressure under stress or sleep. Apple filed two patents in 2017to measure blood pressure by holding the watch against your chest. This is tough to do, but it would be another great health app for the Watch that may or may not require any new sensors.
Sunburn/UV Detector Apple has patented a new type of sensor – a sunscreen detector to let you know what exposed areas of the skin of may be at elevated UV exposure risk. I’m not big on this, but the use of ever more powerful sunscreens has quadrupled, while at the same time, the incidence of skin cancers has also quadrupled, so there may be a market here.
Parkinson’s Disease Diagnosis and Monitoring Parkinson’s Disease is a brain disorder that leads to shaking, stiffness, and difficulty with walking, balance, and coordination. It affects 1/% of people over 60. Today, there is no diagnostic test for the disease (i.e. blood test, brain scan or EEG). Instead, doctors look for four signs: tremor, rigidity, Bradykinesia/akinesia and Postural instability. Today patients have to go to a doctor for tests to rate the severity of their symptoms and keep a diary of their symptoms.
Apple added a new “Movement Disorder API” to its ResearchKit framework that supports movement and tremor detection. It allows an Apple Watch to continuously monitor for Parkinson’s disease symptoms; tremors and Dyskinesia, a side-effect of treatments for Parkinson’s that causes fidgeting and swaying motions in patients. Researchers have built a prototype Parkinson’s detection app on top of it. It appears that screening for Parkinson’s would not require any new sensors – but likely clinical trials and FDA clearance – and would be a great app for the Watch.
Glucose Monitoring More than 100 million U.S. adults live with diabetes or prediabetes. If you’re a diabetic, monitoring your blood glucose level is essential to controlling the disease. However, it requires sticking your finger to draw blood multiple times a day. The holy grail of glucose monitoring has been a sensor that can detect glucose levels through the skin. This sensor has been the graveyard of tons of startups that have crashed and burned pursuing this. Apple has a patent application that looks suspiciously like a non-invasive glucose monitoring sensor for the Apple Watch. This is a really tough technical problem to solve, and even if the sensor works, there would be a long period of clinical trials for FDA clearance, but this app would be a game changer for diabetic patients – and Apple – if they can make it happen.
Sensor and Data Challenges With many of these sensors just getting a signal is easy. Correlating that particular signal to an underlying condition and avoiding being confounded by other factors is what makes achieving medical device claims so hard.
As medical grade data acquisition becomes possible, continuous or real time transmission will store and report baseline data on tens of millions of “healthies” that will be vital in training the algorithms and eventually predicting disease earlier. This will eventually enable more accurate diagnostics on less data, and make the data itself – especially the transition from healthy to diseased – incredibly valuable.
However, this sucks electrons out of batteries and plays on the edge electrical design and the laws of physics, but Apple’s prowess in this area is close to making this possible.
What’s Not Working? Apple has attempted to get medical researchers to create new health apps by developing ResearchKit, an open source framework for researchers. Great idea. However, given the huge potential for the Watch in diagnostics, ResearchKit and the recruitment of Principal Investigators feels dramatically under resourced. (It took three years to go from ResearchKit 1.0 to 2.0). Currently, there are just 11 ResearchKit apps on the ITunes store. This effort – Apple software development and third-party app development – feels understaffed and underfunded. Given the potential size of the opportunity, the rhetoric doesn’t match the results and the results to date feel off by at least 10x.
Apple needs to act more proactively and directly fund some of these projects with grants to specific principal investigators and build a program of scale. (Much like the NIH SBIR program.) There should be as sustained commitment to at least several new FDA approved screening/diagnostic apps every year for Watch and iPhone from Apple.
The Future Although the current demographics of the Apple Watch skews young, the populations of the U.S., China, Europe and Japan continue to age, which in turn threatens to overwhelm healthcare systems. Having an always on, real-time streaming of medical data to clinicians, will change the current “diagnosis on a single data point and by appointment” paradigm. Wearable healthcare diagnostics and screening apps open an entirely new segment for Apple and will change the shape of healthcare forever.
Imagine a future when you get an Apple Watch (or equivalent) through your insurer to monitor your health for early warning signs of heart attack, stroke, Parkinson’s disease and to help you monitor and manage diabetes, as well as reminding you about medications and tracking your exercise. And when combined with an advanced iPhone with additional FDA approved screening apps for early detection of skin cancer, glaucoma, cataracts, and other diseases, the future of your health will truly be in your own hands.
Outside the U.S., China is plowing into this with government support, private and public funding, and a China FDA (CFDA) approval process that favors local Chinese solutions. There are well over 100 companies in China alone focusing in this area, many with substantial financial and technical support.
Let’s hope Apple piles on the missing resources for diagnostics and screening apps and grabs the opportunity.
Lessons Learned
- Apple’s new Watch has two heart diagnostic apps approved by the FDA
- This is a big deal
- In a few years, home and outpatient diagnostics will be performed by wearable consumer devices – Apple Watch, mobile phones or fitness trackers
- Collecting and sending health data to doctors as needed
- Collecting baseline data on tens of millions of healthy people to train disease prediction algorithms
- In the U.S. the FDA has changed their mobile and digital device guidelines and policies to make this happen
- Insurers will ultimately will be paying for diagnostic wearables
- Apple has a series of patents for additional Apple Watch sensors – glucose monitoring, blood pressure, UV detection, respiration
- The watch is already capable of detecting blood oxygen level, sleep apnea, Parkinson’s disease
- Getting a signal from a sensor is the easy part. Correlating that signal to an underlying condition is hard
- They need to step up their game – money, software, people – with the medical research community
- China has made building a local device and diagnostic industry one of their critical national initiatives
