October 25, 2014

Facebook (NASDAQ: FB  ) could soon follow Apple (NASDAQ: AAPL  ) , Samsung (NASDAQOTH: SSNLF  ) , and Google (NASDAQ: GOOG  ) (NASDAQ: GOOGL  ) into the healthcare field. According to a recent Reuters report, the company is experimenting with online support communities for patients and mulling the development of personal health and fitness apps.

This isn’t the first time Facebook has expressed its interest in the healthcare field. In 2012, the company asked users to specify their organ donor status, which caused average daily online organ donor registrations in the U.S. to soar from 616 to 13,054, according to theAmerican Journal of Transplantation. When Facebook acquired virtual reality headset maker Oculus VR for $2 billion earlier this year, CEO Mark Zuckerberg cited telehealth (virtual doctors’ appointments) as a possible use for the technology.

Although Facebook’s support groups and mobile apps are still in the early planning stages, it’s fascinating to consider how the company could redefine “social healthcare” with its 1.3 billion monthly active users.

The business of social healthcare
Facebook wouldn’t be the first company to create online social groups for patients and doctors.

Back in 2008, Google launched Google Health, an ambitious effort to connect fragmented electronic health records, or EHRs, into a single personal health record, or PHR. That effort was abandoned in 2011 after the service failed to achieve mass adoption among doctors and patients. Last November, Google launched Helpouts, an “expert marketplace” which can help connect patients to doctors via video connections.

Meanwhile, smaller companies like Doximity and Personiform are emulating Facebook andTwitter‘s (NYSE: TWTR  ) networking models to connect doctors and patients to one another. Doximity, which had nearly 300,000 members as of January 2014, allows physicians to connect to each other and share patient data in a HIPAA-compliant manner.

Doximity’s iOS app. Source: iTunes

Personiform’s Project Medyear connects patients and physicians by merging Twitter hashtags with Google+ circles. Patients can actively share their health problems and symptoms on the network with hashtags, which helps them connect with strangers with the same ailment. To protect their privacy, Medyear uses Google+ circles to form “CareRings”, which control exactly who sees their health information. Physicians can join also the network to connect with their patients.

WebMD (NASDAQ: WBMD  ) , which offers support groups via its online communities, lets physicians use its Medscape mobile app to send medical information to patients who use WebMD’s mobile app. Last October, the company acquired Avado, a developer of cloud-based patient relationship management tools, to enhance this system.

Considering all the activity that’s going on in this field, it makes a lot of sense for Facebook to experiment with using its sprawling social connections to link patients and physicians to each other.

The business of preventative care apps
Meanwhile, preventative care apps — like exercise, diet tracking, and calorie counting apps –are a big part of the booming mobile health (mHealth) market, which Grand View Research estimates will grow from $1.95 billion in 2012 to $49 billion by 2020.

Apple, Google, and Samsung are all getting ready to capitalize on that growth. Apple recently launched HealthKit, its unified dashboard for iOS health apps and wearables. Google will soon respond with Google Fit, a similar platform which notably lacks HealthKit’s integration with EHRs. Samsung has S Health, another similar dashboard for Samsung phones and Gear smart watches.

These platforms are all designed with the expectation that sales of smart watches will soar. Current forecasts mostly back that belief — for example, research firm ON World believes that smart-watch shipments will surge from less than 4 million in 2013 to 330 million by 2018.

With these unified healthcare platforms and devices taking over smartphones, it would be wise for Facebook to offer health-tracking features to its 1.07 billion mobile monthly mobile users, who generated 62% of the company’s advertising revenue last quarter.

The Foolish takeaway
Although the healthcare market is a lucrative one, it will also be a challenging one for Facebook to break into.

Facebook’s constant shifting privacy settings, its dependence on targeted advertising for revenue, and its controversial “emotional manipulation” experiment could all hurt Facebook’s chances at evolving into a trusted healthcare network or developer of health-tracking apps. Last year, Reason-Rupe’s survey of over 1,000 American adults revealed that 61% did “not trust Facebook at all” for protecting their personal information and privacy.

Becoming a private social network for patients and doctors is a smart next step for the social network, but we should remember that Facebook couldn’t compete against LinkedIn (NYSE:LNKD  ) for a simple reason — the former was a place for personal posts, while the latter hosted professional profiles. We could see the same problem with asking patients to share health information on Facebook — its reputation as a casual social network could prevent it from ever being taken seriously as a healthcare platform.


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