Will Apple’s Strategic Beachhead Be Doctors, Not Patients?

Last week Apple held a huge media event to announce forthcoming products, including the iPhone 6, 6+ and Apple Watch.  Many of us in the healthcare world had been sitting on the edge our seats, hopefully awaiting news detailing Apple’s broader strategy in entering healthcare.  We were disappointed — no mention of Apple HealthKit, no doctors on the main stage, only a few teasers about how the Watch might be used in fitness and health monitoring.

Apple is a consumer technology company, and it’s natural to think that their efforts in healthcare will be aimed directly at patients.  However, I’ve been pondering whether that’s looking at Apple’s opportunity through the wrong end of the telescope.

Are physicians — 85% of whom own an iPhone — a much more natural and powerful strategic beachhead for Apple to focus on?

Apple’s Lack of Leverage with Patients

Dr. Natalie Hodge tweeted about the dominance of Android smartphones among her middle America Kentucky medical office patients:

Apple products have always been viewed as upscale — targeting the digerati, those who want the best, the latest, the coolest, damn the price.

Apple’s positions itself as elite, and in turn the stats show that iPhones aren’t a mass market product. A recent Business Insider article documents that Apple iOS has 12% market share and is falling, while Android has 85% market share and is growing.

As a footnote, Apple and Android both had 0% (zero!) market share in smartphones in 2007. Shift happens!

As someone who advises companies on business strategy, I’ve been scratching my head as to how Apple might gain a foothold with average healthcare consumers — Apple has no critical mass here. A direct route will be difficult, given their low penetration in the overall smartphone market.

But that shouldn’t stop them…

Apple’s “In” with Physicians

Dan Diamond notes in the Forbes blog that as many as one-third of doctors might buy an iPhone 6 by Thanksgiving. He asks “Why do they love Apple so much?”

This afternoon I had a pleasant and rapid Twitter and email exchange with Emily Peters, VP Marketing Communications at Doximity. She provided me with recent data on Apple’s overwhelming market penetration among physicians:

85% of physicians on Doximity are Apple smartphone users compared to Android. Doximity has nearly half of all US physicians as members on our LinkedIn-style professional network today. ” Dr. Nate Gross, co-founder, Doximity

A 2011 survey from Manhattan Research had a similar finding: 75% of physicians own at least one Apple device.

Apple has plenty of critical mass among doctors. A 75-85% penetration among physicians suggests they already will have strong network effects with this pivotal audience.

In turn, it makes me think that physicians are a much more natural and powerful strategic target on which Apple could develop a beachhead business strategy.  Start with the docs…leverage that beachhead to other healthcare stakeholders.

There are many advantages to a physician-centric strategy:

• Concentration. There are only about 800,000 doctors in the US, a highly focused audience. Compare that to an overall population of 330 million people.
• Prestige and Influence. Medicine remains one of the most respected professions. Physicians are influential in many spheres of American life.
• Trust. Despite general mistrust about just about everything in America today, all the poll data I’ve seen shows that patients still trust their individual doctors.
• Influence Over Costs — The Power of the Pen. Remember the metaphor that the most expensive medical instrument is the doctor’s pen — that 80% of health care costs flow through a pen (or mouse, or fingertip) because doctors must prescribe pills, hospital admissions, medical procedures, tests, etc.

Although I’ve written previously about how the iPad could be viewed as Apple’s Trojan Horse for entering healthcare markets through physicians, my main objective today is much simpler, albeit speculative.

Let’s look at Apple’s opportunity in healthcare through the other end of the telescope. Recognize that Apple will have a hard time getting the attention of mass-market patients, but they already have the attention of a much more strategic group — physicians!