Google Health was an odd duck. They chose a subset of the ASTM CCR - a simple but nice medical data format - very limited but it was intended to solve relatively straightforward use cases. It had some patient demographics; medications; allergies; and some visit information. The focus of the standard was on patient safety in transfer of patient care between two institutions - it wasn't meant as a complete medical record. Compared to HL7 it was very straightforward - it had a simple XML schema. There were ambitions for extending the scope of the standard over time but what ASTM (and the Massachusetts Medical Society & a few others..) wanted was a simple format that would solve simple problems so that they could learn what some of the real issues would be in practice. They didn't want to replicate the HL7 mess.
But the CCR was killed by the vendors (it didn't cover their use cases and the by-laws of the ASTM for this group excluded vendor from voting on the spec - it was a physician-centric group) and by Google because they only implemented the standard partially. Even though the CCR schema was simple (too simple from the point of view of the HL7 folks) it was too complex for Google and they removed things like identifiers in the elements and the source for the information. So - if you had two blood tests on the same day by different institutions you might not be able to tell which one came from where. The ability to link data within a document was also broken (if I remember correctly) so that if doctor x had ordered a lab test it might be impossible when the result returned for that doctor to see which lab test was theirs from the CCR. If you got two CCRs and you wanted to sync them - you'd have to do something with fuzzy matches. It's been about 10 years since this happened - my memory is a bit fuzzy - but the combination of the vendors opposition, Google's lack of focus and communication, and the hospitals liking things they way that they are basically killed it.
I don't think that Google was being evil here - I think it was a combination of hubris and a lack of engagement with potential allies that wanted to open up medical informatics. If they wanted to jump back in and design something that had strong crypto and privacy protections I'm sure that they could do an excellent job.

Bhutan is very rugged and I've been driven over roads that were washed out in rainstorms. I don't know how practical quadcopters would be but I would be interested to see how it works out.
When I was there I saw a farm near the top of a small hill with no roads going to it. I asked - how does the farmer get their crop to market? The answer was by animals (donkeys I think). But apparently the farmers in this area had asked for a road and they probably would get one. The main limitation was how to pay for it - they didn't want to take on any foreign debt for infrastructure developments so it might take a few decades. But they wanted their independence and were willing to wait.
It's very true (as earlier commenters mentioned) that the per capita income is low. But when I was there 8 years ago I was struck at how prosperous and healthy people seemed. If I remember correctly Bhutan was largely a barter economy until the 1950s so some of the discrepancy might be that the official statistics don't capture some elements of the economic activity. There certainly were poor areas and the Nepalese road workers seemed far poorer than the Bhutanese - but I suspect that reality is complicated here. Maybe because Bhutan was never colonized we're seeing what a culture looks like that hasn't been plundered by outsiders? I really don't know but I'd recommend anyone who wants to find out more they should just visit there :-).
With the drones - I'd worry about noise pollution and general impracticality with the current state of quadcopters. But it might work well & I hope that their experiment goes well. When we were there my daughter was bitten by an insect and had a bad reaction - we couldn't tell if it was an infection or an allergic response. Thimphu was a day's drive away. Something like this might work & it might be more economical than building roads. I wish them good luck.

I don't think that Google Health was a covered entity. They were the patient's proxy. PHRs are not regulated by HIPPA.

I don't think that HIPAA or fees had much to do with it. HIPAA's focus is on healthcare providers and their business associates. Google Health was the patient's repository and there's no restriction on what the patient does with their records after they have been given them by their providers.
I stopped following Google Health a few years ago. I might have the details wrong - it's been a while since I thought about them:

1. I never understood their security model. If I remember correctly - you could give people access to particular results but you couldn't (for example) put in a rule that said "Always share my blood test results and medications with person X". You could share them explicitly after they were added - but it's easy to forget to do this.
2. The mechanisms for input/output were awkward. They supported a subset of the ASTM's CCR. One of the things that they stripped out was the Source element - so a physician would never know the origin of a particular observation. This wasn't very useful. They also stripped out identifiers in the CCR that third parties could have used for synchronization of observations. Perhaps observations could have been matched up by date/time and values - but since they had also simplified how observations could be recorded it just wasn't a very platform-friendly design.
3. The search/sort mechanisms for data were very awkward. It was more of a repository of documents than it was a database for medical observations. This make it awkward to build services on.
4. I don't know anyone that could explain their business model to me. I know that it confused many people at several hospitals that spoke with.

I wish that Google had done something deeper and more interesting here - the healthcare industry certainly could use a shakeup. If they offered something compelling I'm sure they could have charged for it and had a business of sorts.
I suspect (but this is pure speculation) that they really wanted do to the right thing with patient privacy but they couldn't figure out how to structure a system that protected patients while providing a healthcare/business model that hospitals and primary care providers trusted. Anything that was of sufficient power to build a good platform from probably was too complex for patients to handle. By handle here I don't mean that they couldn't use it - but they probably would make mistakes that would be embarrassing for them or that might expose google to some legal liability.
For example - apparently some state laws permit parents to have complete access to their children's medical records. But when the medical treatment starts to have anything to do with the sexual activity of the minor (say - birth control pills) the parent's no longer have automatic access. Suppose that the system was designed perfectly but then the family moved to another state with different rules. I'm not saying that this couldn't be built - but it's not a trivial effort and I don't know how the costs/liabilities get distributed.
I would love Google to jump into medical informatics in a big way but it's a big commitment to something that is outside of the search and advertising industries. A product that could link primary care providers, hospitals, and patients together would be huge. I don't know where the insurance companies would fit in here - I'd prefer single payer (!) - but I think Google would need to build something of at least national scale and there's a lot of interests to be balanced.
I think that Google Health was a test - a small perturbation to the existing system and they wanted to see what would happen. I'm guessing that they learned it was a big mess :-).

I remember the Scientific American with the Mandelbrot set on the cover - it was a huge influence on my life. I was working as a research assistant at the Federal Reserve Board in DC and was losing interest in mathematical modeling as a way to understand anything in the real world. Most of the models I was dealing with were linear or mostly linear. When I read the article at first I thought it was some cheap trick or approximation... but gradually I realized it was different than anything I had seen before. So - being a rational, optimizing actor I then left the field of economics .. the most utility-maximizing decision I ever made :-) Since then I've always viewed fractals as a gateway drug to more complex models of the universe. So many processes unfold over time; fractals are just one of the ways to get a glimpse of what might be going on. Thanks Dr. Mandelbrot!

There is one edge case - what if the mouse is inside the cat? Are you going to deny access until it has passed? Or perhaps the RFID chips should be made to be digestible?