Apple health team faces departures as tensions rise over differing visions for the future

Key Points
  • Apple has seen some high-profile departures in recent months from its health team.
  • The company has described health care as one of its focus areas, with CEO Tim Cook saying that he hopes it will someday be Apple's "greatest contribution to mankind."
  • Sources told CNBC that tension is rising internally in Apple's health unit, which is prompting employees to leave for roles in companies including Anthem and Google.
Apple's health team faces trouble amid departures
Apple's health team faces trouble amid departures

Apple's health team has seen a slew of departures in the past year after a series of leadership changes and internal disagreements about direction.

Tension has been increasing within the team in recent months, according to eight people familiar with the situation, although that undercurrent started several years ago. Some employees have become disillusioned with the group's culture, where some have thrived while others feel sidelined and unable to move their ideas forward, the people said.

Four of the eight people said some employees hoped to tackle bigger challenges in the health-care system, such as medical devices, telemedicine and health payments. Instead the focus has been on features geared to a broad population of healthy users.

The eight people requested to remain unnamed as they were not authorized to speak about Apple's health efforts or its departures. They said health does remain a strategic priority for Apple.

Apple has been vocal about its commitment to health. It has been a key driver for Apple Watch sales, which have helped turn Apple's wearables segment into its growth engine as iPhone sales slow. CEO Tim Cook has said he hopes that health will be the company's "greatest contribution to mankind."

It's not clear whether the attrition rate within the health team is higher than in other groups within Apple. But the departures and the internal tension over the group's vision show how tech companies could stumble in the notoriously complex $3.5 trillion health-care sector.

Apple's Tim Cook: We want a 'curated best experience' in services
Apple's Tim Cook: We want a 'curated best experience' in services

Ambitious employees in the field are eager to tackle the biggest problems in the health care system. But that does not always fit in with the more incremental and measured product approach of large tech companies.

Among the most recent departures: Christine Eun, who worked at Apple for almost eight years with a background in marketing and who left this month, according to two people; Brian Ellis, who left the team overseeing AC Wellness, a subsidiary that operates health clinics for Apple employees, and went back to Apple Music in June, and Matt Krey, who left Apple in May and is taking time to focus on his family, according to LinkedIn.

Other recent departures that were previously reported include Warris Bokhari, who went to Anthem this summer, and researcher Andrew Trister, who got scooped up by the Gates Foundation earlier this month.

Apple declined to comment for this story.

How leadership is structured

The health team reports to Jeff Williams, the company's chief operating officer, who has a personal passion for the medical sector. Two people said Williams pushed the Watch team to explore sensors and algorithms in health care in 2016, after it became clear that fashion wasn't moving the needle for users.

This year, an employee morale survey in the health team showed signs of discontent, two people said. After the survey, Williams personally spoke with several employees to figure out the source of the problem and expressed that he remains deeply committed to the health group. As the COO, however, he has many other duties, including overseeing Apple's operations and supply chain.

The health group's leadership includes Kevin Lynch, who oversees software projects, including the group of doctors and engineers working on health records; Eugene Kim, who leads watch hardware, and Sumbul Desai, who oversees the clinical team that runs AC Wellness health clinics, the electrocardiogram app and the Apple Heart Study, and health strategy. There's also a separate business development group under former health consultant Myoung Cha that works with health insurance customers, such as Aetna, as well as pharmaceutical companies such as Eli Lilly and Johnson & Johnson.

Desai, Lynch and Kim all report to Williams. Cha has a different chain of command and reports to Douglas Beck, a vice president of Americas and Northeast Asia. These four leaders manage hundreds of people working within Apple Health, which has been aggressively hiring and expanding in recent years.

At present, there's no single senior vice president dedicated to health.

Most of the Apple Health employees who left the company worked in Desai's group, or left shortly after she was recruited in the summer of 2017 from Stanford University, where she was running many of its digital health efforts.

Desai is a doctor and was brought on to run clinical efforts, including Apple's health clinics, in the summer of 2017. She then expanded her scope to other areas, including the Apple Heart Study and the electrocardiogram app and sensor, one of the people said. Now, former hospital COO M. Osman Akhtar is running day-to-day operations for the clinics, two people said.

Differences over direction

One of the key issues is long-term vision inside Apple's health team. Four people told CNBC that some employees feel the company could be taking on more ambitious projects and doing more in health. Instead, its products and services are mostly confined to wellness and prevention. The people noted these differences of opinion have flared up between the different groups.

Wellness involves helping those who are generally healthy with areas including exercise, meditation and sleep, while medical applications target patients with specific diseases. Wellness is less risky and less regulated than diagnosing and treating disease, but it's not where most of the cost is in the health-care system. Almost 90% of U.S. health-care expenditures are for people with chronic diseases, according to the CDC.

One faction wanted to introduce a telemedicine service and move into health payments to simplify insurance billing, but it was not successful in driving these initiatives ahead.

Others wanted to do more with Beddit, a sleep sensor that a team at Apple spent months vetting before it was acquired in mid-2017.

There are also disagreements over the AC Wellness health clinics and whether they should expand into medical software and eventually produce products for clinicians or remain focused on Apple employees. A small product team led by Apple veteran Jason Fass left AC Wellness in 2017.

AC Wellness is a wholly owned subsidiary of Apple, but Apple employees work there and it advertises jobs on Apple's website.

There was also tension about how much the health team should borrow from the Apple playbook.

When the company announced its electrocardiogram for the Apple Watch in the fall of 2018, some doctors and others in the medical industry outside of Apple reacted negatively to the news. This frustrated some people internally who had argued for a small and focused product launch, which involved the medical community getting to weigh in and ask questions to reduce any potential pushback. The company compromised by secretly convening groups of medical experts, including cardiologists, at its headquarters every six months or so, and by introducing content developed with the support of doctors at Apple specifically for doctors.

Two of the people said there were also disagreements about how transparent the company should be about its work to the medical industry. Apple has previously remained highly secretive about its projects. Yet that level of secrecy is more challenging to maintain in health care because the industry typically runs on published research, clinical studies and keeping an open dialogue with stakeholders in the industry.

Other high-level departures from the group over the past few years are Robin Goldstein, who was at Apple for more than two decades and most recently worked on the regulatory side of health before leaving in late 2017; Anil Sethi, a former Apple Health director who left to form a health-tech start-up in late 2017; Stephen Friend, a top Apple researcher who departed at the end of 2017; Charles Schlaff, who worked on Apple Watch before moving over to special projects and left in November 2018, according to LinkedIn; Craig Mermel, who was in engineering at Apple Health and left to join Google Brain in February; and Yoky Matsouka, who was brought in to lead health but left after less than a year in 2016 and is now a vice president at Google.

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