Apple has the most popular health wearable on the planet. Google bought Fitbit. Amazon just released the Halo Band. All now have a fitness and health subscription service.
Why are all the big tech companies attacking health?
“The context is that in the U.S. it’s a $3.6 trillion industry,” former Apple CEO John Sculley told me on a recent episode of the TechFirst podcast. “I think it’s maybe about $9 trillion if you look at a global number for healthcare.”
That highlights one of the major reasons why big tech is getting into health. Frankly, it’s the same reason that infamous bank robber Willie Sutton was (falsely) reported to have picked his career: because that’s where the money is.
But more that that, it’s also where the opportunity is, Sculley says.
Sculley knows healthtech, as he’s made it his preferred area of investment for much of the last two decades. He’s invested in dozens of healthtech startups, from RxAdvance to Zedsen to MD Live to Celularity. He’s also the chairman and CMO of RxAdvance, a pharmacy benefit management company for customers like Amazon.
One of the bigger opportunities Scully is talking about is eliminating waste, which makes up as much as a quarter of all healthcare spending.
Listen to the interview behind this story:
“McKinsey Global Institute has estimated in the U.S. that there’s $900 billion of fraud, waste, abuse, misuse, and avoidable medical costs,” Sculley says. “Now that’s $900 billion out of $3.6 trillion.”
That waste lies in excessive regulation. Massive lobbying from special interests — almost $400 million worth. Bureaucracy. Complexity. And a general failure to adopt new technology, resulting in ongoing uses of ancient technology like fax machines and paper documents.
Fixing that $900 billion worth of waste could potentially provide healthcare for all Americans at the same overall cost.
And fixing it is a particular opportunity for healthtech startups right now, because the giants are initially focusing on…