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

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.

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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.

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