CNBC'S CHRISTINA FARR: HEALTH RECORDS GIANT EPIC TEMPORARILY HALTS ADDITIONS TO ITS APP STORE BECAUSE OF PRIVACY CONCERNS

Health records giant Epic temporarily halts additions to its app store because of privacy concerns

  • Epic Systems is the largest medical record software vendor in the United States.
  • The company has its own equivalent of the Apple App Store, called App Orchard.
  • The store halted enrollments to third-party health developers in December, citing concerns about the privacy and security of patient data.

Christina Farr

Epic Systems, the giant medical records software vendor, created an app store two years ago so that companies including Apple, Oscar Health and other providers of health apps could sync their services with patient data from large hospitals and clinics.

The Store, called App Orchard, became the major way for dozens of developers of health software to reach patients who visited some of the largest medical centers like Mayo Clinic, Cleveland Clinic and Massachusetts General Hospital, as well as the doctors that work there.

But in December, Epic froze enrollment in App Orchard, according to three people familiar with matter who asked not to be named because of the sensitivity of the issue. In an email to CNBC, Epic confirmed the move and indicated that it was temporary and related to security and privacy concerns with some third-party developers.

"Over the last few months we updated our App Orchard policies to help assure that apps operate in ways that keep patient data safe, private, and secure," an Epic spokesperson said in the statement. "During that time, the App Orchard remained open, registrations were received, but new enrollments had to wait until our policies were completed. New applications are currently being reviewed and approved."

Epic, along with rivals Cerner, McKesson and AthenaHealth, are critical partners for outside developers because health data is so heavily protected and those companies own the keys to that valuable information. AthenaHealth and Cerner both offer their own app stores.

App Orchard is "the only easy way to get access to their (health) systems in a somewhat above-board and consistent way," said Jon Pearce, CEO of digital health company Zipnosis.

There are 119 apps currently enrolled in App Orchard, according to its website. They include Apple Health, which helps Apple Watch and iPhone users pull together health information from all their clinics and hospitals, as well as the appointment booking apps from Zocdoc and Oscar Health. Others are building apps for medication reminders, and hundreds more are currently in the process of developing apps for App Orchard, said a person familiar with the matter.

Epic charges fees for health developers that integrate with App Orchard, though it recently lowered the price for start-ups. One sources said the reduction opened the floodgates to smaller developers, prompting Epic to take steps to better police health apps on concern that some would take privacy and security less seriously than others.

More companies are seeking access to Epic's app store as start-up funding increases. According to Rock Health, a research and early-stage venture firm, investors poured $8.1 billion into health-tech companies in 2018. Big tech companies like Apple and Alphabet are also working more closely than ever with the top medical record vendors, as they look to access clinical data.

"Think of it as a safe sandbox for developers to build without breaking anything," said Yumin Choi, a health-tech investor at Bain Capital Ventures.

Epic was recently proposed by CNBC's Jim Cramer as a potential acquisition target for Apple. CEO Judy Faulkner later said she had no intention of selling.

About CNBC:

With CNBC in the U.S., CNBC in Asia Pacific, CNBC in Europe, Middle East and Africa, and CNBC World, CNBC is the recognized world leader in business news and provides real-time financial market coverage and business information 410 million homes worldwide, including more than 90 million households in the United States and Canada. CNBC also provides daily business updates to 400 million households across China. The network's 15 live hours a day of business programming in North America (weekdays from 4:00 a.m. - 7:00 p.m. ET) is produced at CNBC's global headquarters in Englewood Cliffs, N.J., and includes reports from CNBC News bureaus worldwide. CNBC at night features a mix of new reality programming, CNBC's highly successful series produced exclusively for CNBC and a number of distinctive in-house documentaries.

CNBC Digital delivers more than 52 million multi-platform unique visitors each month. CNBC.com provides real-time financial market news and information to CNBC's investor audience. CNBC Make It is a digital destination focused on making you smarter about how you earn, save and spend your money by zeroing in on careers, leadership, entrepreneurship and personal finance.

CNBC has a vast portfolio of digital products, offering CNBC content to a variety of platforms such as: CNBC.com; CNBC PRO, a premium service that provides in-depth access to Wall Street; a suite of CNBC mobile apps for iOS and Android devices; Amazon Alexa, Google Assistant and Apple Siri voice interfaces; and streaming services including Apple TV, Roku, Amazon Fire TV, Android TV and Samsung Smart TVs. To learn more, visit https://www.cnbc.com/digital-products/.

Members of the media can receive more information about CNBC and its programming on the NBCUniversal Media Village Web site at http://www.nbcumv.com/programming/cnbc. For more information about NBCUniversal, please visit http://www.NBCUniversal.com.