“Turns out that story was a lot more provocative than I actually anticipated,” Cramer said Wednesday. “It’s kind of exactly what I was going for, though. The whole point was to start a discussion, to figure out how Apple’s stock can get its mojo back and possibly put its technology to work to revolutionize and innovate the health-care industry on behalf of you, the customer.”
The feedback to Cramer’s suggestion ranged from supportive:
To downright negative:
But with Apple clearly making moves into health care — as demonstrated by its talks with Medicare, its research collaboration with Johnson & Johnson and CEO Tim Cook’s goals for the company — Cramer thought the topic was well worth revisiting.
One of the main arguments against an Apple-Epic tie-up was that Apple’s not as trustworthy as it seems. Consumers balked at the thought of sharing their information with the tech giant, but Cramer didn’t exactly share their worries.
“I get where this is coming from, but I think this criticism is way off-base,” he said. “Sooner or later, some gigantic tech company will make itself into a repository for medical records that’s compatible with the many different software systems used by doctors and hospitals. […] Apple seems like the obvious and logical choice.”
The “Mad Money” host pointed out that most Apple customers already trust the company with their credit card information, photos and other identifying data, adding that “Apple’s not a Facebook in disguise” and doesn’t sell user data.
Others wondered why Apple would even want to break into the fragmented electronic health records business. But if it has an enterprise software platform like Epic’s (or competitor Cerner’s) under its belt, it could reshape the space, Cramer argued.
“Right now, this industry is a mess because the companies involved have no incentive to cooperate, so your hospital’s system may not be able to communicate with the system at your doctor’s office,” he explained. “[It’s] wasteful. It’s inefficient. There’s a huge unmet need for an outside player to come in and create a universal repository for your health-care records, like, say, the iPhone or the Apple Watch — that’s the opportunity.”
He added that integrating Epic — another sore point among the Twitterati — would be easier for Apple than people expect given its resources, including its $123 billion cash hoard. He estimated that folding Epic in would cost roughly $20 billion.
But the most common feedback by far was that Epic Systems’ founder, CEO and controlling shareholder, Judy Faulkner, would never sell her company. She has reportedly created a foundation to eventually inherit nearly all of her Epic stock.
Cramer’s riposte? “Let’s not miss the forest for the trees here. Epic doesn’t want to sell? OK, fine. Then Apple should go buy their biggest competitor, Cerner, a publicly traded company worth $17 billion. The point is that they could revolutionize the electronic medical records space and give their own service business a major boost.”
But his favorite response came from health-care blogging guru John Lynn, who wrote an entire piece in response to Cramer’s call.
In it, he wrote: “If Judy was to sell, Apple is an interesting acquirer. Apple has created more trust in how it handles data than most technology companies and that’s something that would be valued by Judy and Epic. Is it enough? Probably not today. I think Judy still trusts herself and Epic to protect their clients’ data 1000 times more than she would trust Apple to do so.”
Still, for Cramer, that doesn’t strike Apple off the list of “ideal” partners for these digital health-care record-keepers. At the end of the day, their business doesn’t work the way it’s supposed to, and Apple’s trust with consumers and wide array of resources could fix that, he said.
“One way or another, Apple is uniquely positioned to revolutionize the electronic health records business. They could make an acquisition like Epic — yes, if Judy would sell — or Cerner, they could build out their own system, they could focus purely on the iPhone as a repository of data,” he said. “There are a lot of ways to approach this, and I think any of them would be a win for both patients and for Apple’s shareholders, and it’s a huge cudgel against those who claim that Apple no longer innovates. That’s hogwash. If coming up with a brand new device that can save millions of lives isn’t innovation, what the heck is?”
Disclosure: Cramer’s charitable trust owns shares of Apple, Johnson & Johnson and Facebook.
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