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Apple explored buying a medical-clinic start-up as part of a bigger push into health care

  • Apple's health team was until recently deep in talks to buy Crossover Health, the venture-backed start-up that runs its on-site medical clinic.
  • It's not clear if Apple wanted to own and operate a network of health clinics, like its retail stores, or simply partner to sell products with a health-related angle, like the Apple Watch

Apple has considered an expansion into health care clinics, and had talks to buy a start-up called Crossover Health, which works with big employers to build and run on-site medical clinics, according to three sources familiar.

Crossover Health is one of a small number of companies that specialize in working with self-insured employers to provide medical and wellness services on or near to campus. Among its clients are Apple and Facebook.

Crossover also has clinics in New York and the Bay Area, and touts its digital features like same-day appointments via a mobile app.

The Apple-Crossover talks went on for months but didn't materialize into a deal, one of the sources said. Apple also approached nationwide primary care group One Medical, said two other sources.

Crossover Health did not respond to a request for comment. Apple declined to comment.

The discussions about expanding into primary care have been happening inside Apple's health team for more than a year, one of the people said. It is not yet clear whether Apple would build out its own network of primary care clinics, in a similar manner to its highly successful retail stores, or simply partner with existing players.

It's also possible Apple will just decide not to make this move.

Some experts see a move into primary care as a way to build out its retail footprint. Apple's worldwide network of more than 300 stores has been one of its most important sales channels.

Canaan's Nina Kjellson, a prominent health tech investor who has no knowledge of Apple's plans, believes the move is plausible. "It would help build credibility with Apple Watch and other health apps," she explained.

"Apple has cracked a nut in terms of consumer delight, and in the health care setting a non-trivial proportion of satisfaction comes from the quality of interaction in the waiting room and physical space," she continued.

Richard Milani, chief clinical transformation officer at Ochsner Health System in New Orleans, which was one of the first hospitals to use the Apple Watch as a patient health monitoring tool, agrees it might make sense.

"Such a move wouldn't surprise me as Apple has demonstrated that its interest in health care isn't superficial," said Milani. "Primary care is in great need of re-imagining and rethinking."

Apple has a lot of health-related projects going on

Apple is expected to make a big move into health care in the coming years. CEO Tim Cook has said recently that he sees health as a "business opportunity," rather than a philanthropic endeavor.

"There's much more in the health area," he said in an interview with Fortune. "There's a lot of stuff I can't tell you about that we're working on, some of which it's clear there's a commercial business there."

In the U.S., the demand for primary care services is outstripping the supply of physicians. According to some estimates, there could be a shortage of up to 35,000 primary care doctors by 2025.

In recent years, Apple has hired dozens of doctors, health consultants and other medical experts, working on campus. As CNBC recently reported, it scooped up Stanford's rising star in digital health Sumbul Desai for a senior leadership role.

Apple is working with the U.S. Food and Drug Administration on finding better ways to fast-track digital health software through the regulatory approval process. It is also partnered up with researchers at Stanford to determine whether the Apple Watch is accurate and sensitive enough to be used as a tool to screen for a heart rhythm disorder known as atrial fibrillation.

It has other research and development projects, including a team working on a sensor to non-invasively and continuously track blood sugar levels.

The company is also working to make the iPhone the central repository for patient health information. Already, it has developed software tools for health developers to make it easier to recruit patients for clinical studies (ResearchKit) and share health information with third-party developers with consent (HealthKit).

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