Apple's health plans and the apps changing our lives

Your smartphone will make you healthy, wealthy and wise. Well, I am not sure about the wise bit, but one of the fascinating economic stories this week is the new iPhone health app announced by Apple at its annual Worldwide Developers’ Conference in San Francisco.

It is called Health, and according to CNN, “the app will monitor users' heart rates, sleep, weight and blood pressure among other health-related information. HealthKit will allow clinicians at the Mayo Clinic to send health information to a user's app, which can in turn send that data to a user's primary physician. It also syncs with third-party fitness devices and apps.”

So there you are. For those of us who would prefer not to have our vital functions reported 24-hours to the Mayo Clinic, this is all a bit depressing. The scales in the bathroom, plus an apple and a couple of glasses of red wine a day, are a less earnest and probably just as effective a way to keep functioning.

But – and this is the big point – the stream of apps is not only changing our lives but also becoming a vital way in which we improve our standard of living and quality of life. This is an economic story, not just a technical one.

For the past half-century, probably longer, it has proved much easier to increase productivity in manufacturing than it has to increase in services. In very round numbers, in a typical developed country the former goes up by about 3 per cent a year, the latter by 1 per cent. Factories find they can make better-quality things with fewer people, whereas schools and hospitals find that if they cut people they lose quality of service.

As a result, the price of goods relative to services has fallen everywhere. Manufacturing is a much smaller proportion of the economy (in the US about 13 per cent, Germany about 18 per cent) than it used to be, so in future increasing productivity will have to come mainly in services.

The principal tools enabling us to do so are the new communications technologies.

This is where apps come in. It always takes a while for any new technology to deliver increases in productivity because it takes time for producers to apply it and consumers to discover how to use it.

Think of booking airline seats online. That was largely top-down – airlines developing a system both to cut costs and nudge customers in such a way as to increase seat usage of the planes. But apps are largely bottom up. You don’t know what people want until you develop something and see if the punters queue up to use it. From an economist’s perspective this is important in two ways: increasing productivity (which shows in the statistics) and increasing human wellbeing (which may not show up).

Health care is an industry ripe for revolution. It is about 18 per cent of GDP in the US – much bigger than manufacturing – and about 10 per cent here. Improving health is as much a responsibility of individuals as the service-provider. People and health care systems (be it tax-based or insurance-based) have the same aims: to keep people healthy and care for them if they are not. But the interface between the individual and the health care industry even in the best systems is clunky, and it has proved very difficult up to now to improve it.

We don’t know whether this new app, or the others on Android, or the ones round the corner, will deliver more seamless health care and better health outcomes. But the prize, if they can do so, is almost unthinkably huge – a healthier Western world.

It this cuts the cost of health care it will appear in the standard of living statistics as well as the well-being ones. But many of the apps that improve our quality of life do not. A Google map on the phone that saves you traipsing around trying to find a restaurant, or taking the wrong path in a Scottish forest, can make a big difference to our lives. But it comes free, or at least virtually free, and barely shows up in the GDP stats.

This applies to a lot of the stuff that is happening now. There is a tidal wave of new apps and people will have their own favourites. For example, Citymapper in London has a “get me home” function that I am assured is really useful when you have been over-served. Look at what the minicab website Uber has done for getting around London and Manchester.

We don’t know what people want until they are offered it. What we do know, though, is that a tiny number of the stream of apps that are hitting the market will utterly change our lives, and change them for the better.