Top 10 Healthcare Technology Events of 2018: Big Tech's Moves and Market Shifts

2018 was a pivotal year for the development of health and medical technology.

Over the past year, IT giants have flourished in the healthcare sector: Cerner signed a $10 billion contract with the U.S. Department of Veterans Affairs, and tech companies such as Amazon, Apple, and Google have also made certain progress in this industry.

The company once seemingly destined to disrupt the $3.4 trillion healthcare sector is now teetering: IBM has confirmed multiple rounds of layoffs in its Watson Health AI division, while Theranos, the once-favored blood-testing startup, has permanently shut down.

The following is a summary of the key events in 2018 highlighting the intertwining of IT and healthcare, as reviewed by Becker’s Hospital Review, aiming to provide insights for readers to forecast the development direction of IT in the healthcare industry in 2019.

In November 2018, private equity firms Veritas Capital and Elliott Management, through its subsidiary Evergreen Coast Capital, acquired Athenahealth for approximately $5.7 billion in cash.

In May 2018, the activist investment firm Elliott Management launched an unsolicited takeover bid for Athenahealth.

Before making the decision, Athenahealth, a healthcare software provider headquartered in Watertown, Massachusetts, engaged in months of internal debate over whether the company should remain independently operated or be acquired. Shortly thereafter, Jonathan Bush, co-founder and CEO of Athenahealth, stepped down from his role as president.

Veritas Capital and Evergreen Coast Capital are proceeding with the planned merger of Athenahealth and Virence Health. Virence Health, a value-based healthcare services company, was acquired by Veritas from GE Healthcare in July 2018.

In May 2018, the Department of Veterans Affairs (VA) signed a 10-year, $10 billion agreement with Cerner. The two parties agreed to integrate the VA into the same electronic health record system used by the Department of Defense.

Sena has assembled a team of 24 technology companies to support its Electronic Health Record (EHR) modernization initiative, which is scheduled to launch at pilot sites in 2020.

However, an investigation published by ProPublica in August 2018 revealed that in March 2018, an informal committee at President Trump’s private club, Mar-a-Lago, in Palm Beach, Florida, orchestrated the removal of former VA Secretary David Shulkin, M.D., from the Department of Veterans Affairs.

A subsequent series of investigations by ProPublica revealed that the so-called “Mar-a-Lago Crowd” had reviewed the VA’s contract with Cerner and encouraged the agency to adopt an application developed by insiders within the committee.

In 2018, Amazon appeared to touch upon every niche within the healthcare sector. Early that year, the e-commerce giant signaled its continued interest in developing healthcare tools by filing an application with HIPAA compliance officers.

Subsequently, the company announced its plan to acquire the startup pharmaceutical company PillPack, sell software that mines patient data from EHRs (Electronic Health Records), and launch exclusive-branded home medical devices through a partnership with the health brand consulting firm Arcadia Group.

In addition, the healthcare venture jointly established by Amazon, Berkshire Hathaway, and JPMorgan Chase was launched in January 2018, with the aim of reducing healthcare costs for U.S.-based employees within these companies.

At a company event in September 2018, Apple Chief Operating Officer Jeff Williams announced that the latest Apple Watch would include an app capable of helping wearers identify signs of atrial fibrillation by reading electrocardiogram (ECG) data from the wrist. Apple stated that this app is the first over-the-counter ECG device to receive FDA approval.

Although this claim remains controversial, it is undeniable that the app has made cardiac data accessible to a broader population. Only time will tell whether the application can successfully detect undiagnosed atrial fibrillation or serve as a routine screening tool for the general healthy population, without leading to potential misdiagnosis or overtreatment.

In January 2018, as part of the iOS 11.3 beta, the iPhone manufacturer announced plans to integrate patient health records—including data on allergies, immunizations, and laboratory results—into its Health app.

The project was launched at 12 pilot hospitals, including leading healthcare providers such as Geisinger in Danville, Pennsylvania, and Johns Hopkins Medicine in Baltimore. Since 2018, more than 100 hospitals and clinics have added this feature.

In addition to medical devices, Apple has partnered with national clinical testing laboratories such as LabCorp and Quest Diagnostics to directly import patients’ diagnostic results into the iPhone Health app as part of its health records feature.

In November 2018, David Feinberg, M.D., confirmed his plan to resign as CEO and President of Geisinger Health System in Danville, Pennsylvania, and to assume a new leadership role at Google in January 2019.

It is reported that Dr. Feinberg will focus on consolidating Google’s various fragmented health initiatives, including projects such as Google Cloud, Google Brain, Nest home automation, and Google Fit wearable devices.

As part of the integration of the company’s healthcare strategy, Google will also take over the marketing of certain products from DeepMind, the artificial intelligence division of its parent company, Alphabet.

Throughout 2018, Google continued to strengthen its leadership in the healthcare industry by recruiting Toby Cosgrove, former CEO of the Cleveland Clinic, and Michael Howell, former Chief Quality Officer at the University of Chicago, into its cloud computing and artificial intelligence teams, respectively.

IBM Watson Health ran into trouble in May 2018, when the company laid off a large number of employees (the exact number is unknown), including at least 40 employees from the Cleveland Clinic. A former employee who wished to remain anonymous stated that IBM’s artificial intelligence healthcare project had failed.

A STAT investigation revealed that issues such as internal competition and a chaotic operational structure have plagued IBM Watson Health since its establishment in 2015, with these contradictions becoming increasingly acute in the summer of 2018.

According to a STAT investigation, IBM Watson Health recommended “unsafe and incorrect” cancer treatments in the field of oncology. In August 2018, the company refuted negative media reports, stating that they distorted and overlooked facts, and asserted that “IBM Watson Health has merely failed to make ‘sufficient’ progress in bringing the advantages of AI to the healthcare sector.”

According to reports, UnitedHealth Group is one of the second-round bidders interested in acquiring Athenahealth.

Although UnitedHealth Group ultimately failed to win the bid, the healthcare company continues to pursue its health IT ambitions and plans to launch an electronic health record (EHR) system for its members and providers in 2019.

According to Steve Nelson, CEO of UnitedHealth Group’s health insurance division, the product is designed as a personal health record that can connect numerous electronic medical records, aiming to provide “a unified, secure source of truth for consumers and healthcare providers.”

Currently, UnitedHealth Group’s personal health records have been tested in three ACOs.

Allscripts was among the first healthcare organizations to fall victim to the SamSam ransomware incident in January 2018. Additionally, at least five other healthcare institutions were affected by this incident: Kansas Heart Hospital in Wichita, Hollywood Presbyterian Medical Center in Los Angeles, the clinical laboratory network LabCorp, MedStar Health in Columbia, Maryland, and OrthoNebraska Hospital in Omaha. Meanwhile, several cities, including Atlanta and Newark, New Jersey, were also targeted by hackers.

In late November 2018, a grand jury in New Jersey indicted two Iranian hackers involved in the incident. According to the indictment, the SamSam hackers extorted more than $6 million from victims, who collectively suffered losses exceeding $30 million due to their inability to recover their data.

Theranos was founded in 2003, promising to revolutionize blood testing technology. The company claimed to have invented a device that could rapidly provide diagnostic results using only a single drop of blood, thereby garnering widespread attention. At its peak, Theranos was valued at $9 billion.

However, a 2015 report by The Wall Street Journal stated that Theranos’s devices were flawed and inaccurate, triggering a series of federal investigations into the startup.

In early 2018, Theranos and its founder and CEO, Elizabeth Holmes, were charged with fraud. In April 2018, Theranos was forced to lay off approximately 80% of its employees, and the company shut down completely in September.