Google (GOOG) is betting big on health care – so big, that the tech giant has confirmed it is collecting health data on millions of Americans through a partnership with Ascension, the nation’s second-largest non-profit health provider.
Now, maybe that’s not much of a surprise to investors, but what is raising eyebrows is the fact that Google and Ascension are collecting this data without the knowledge of patients.
“Obviously, it’s not a great look for Google, but fundamentally it’s tricky,” Dan Ives, managing director of equity research at Wedbush Securities, tells Yahoo Finance’s The First Trade.
“I think there are gray lines right now being crossed because you see more of the tech companies getting further entrenched in health care,” Ives says.
It’s all legal
The partnership, codenamed "Project Nightingale," was first reported by the Wall Street Journal. Google’s Cloud division is working with Ascension to analyze patient data by developing AI-based services for medical providers.
Existing health privacy laws, HIPAA, allow this kind of data collection, and Google says “patient data cannot and will not be combined with any Google consumer data."
Still, Google is tackling broader data privacy concerns. It’s currently the subject of two separate government antitrust probes that are examining whether the massive amounts of data Google collects gives the company an unfair advantage over the competition.
Health care arms race
“If you look at it from a mining data perspective, it’s a balancing act,” says Ives. “I think Google needs to walk gingerly, but health care – right now, it’s an arms race.”
Google’s parent company, Alphabet, recently announced it will pay $2.1 billion for Fitbit, as it tries to play catch-up with Apple in the wearables market.
“I think this is just the first step,” says Ives. “I think they’re trying to get more entrenched in the consumer ecosystem.”
He sees artificial intelligence and analytics as major opportunities for big tech in the health care space.
“I can see more smaller acquisitions to build upon what they’ve done with Fitbit as well as just their core initiatives,” says Ives. “I also see that happening with Apple, IBM and others, because right now you look at big tech – and that’s sort of the next frontier in terms of health.”
Alexis Christoforous is co-anchor of Yahoo Finance’s “The First Trade.” Follow her on Twitter @AlexisTVNews.