IBM Watson Health Acquires Truven For $2.6 Billion
By Jof Enriquez,
Follow me on Twitter @jofenriq
IBM Watson Health significantly added to its trove of health data by acquiring Truven Health Analytics for $2.6 billion. It’s the fourth major acquisition for IBM’s health-centric subsidiary, which uses Watson’s machine learning capabilities in seeking cost-effective ways to treat a myriad of conditions.
Since being launched in April 2015, IBM Watson has strengthened its own data analytics capacity by buying Explorys, a healthcare intelligence cloud spinoff from Cleveland Clinic; Phytel, a provider of integrated population health management software; and Merge Healthcare, a medical imaging company.
With the addition of Truven, IBM “will be one of the world’s leading health data, analytics and insights companies, and the only one that can deliver the unique cognitive capabilities of the Watson platform,” IBM Watson Health GM Deborah DiSanzo said in a statement.
Truven claims to have 8,500 clients, including government agencies, employers, health plans, hospitals, and clinicians, which use Truven’s cloud-based technology, methodologies, and health claims data to inform benefit decisions for one in three Americans.
DiSanzo told Fortune that Truven has “200 million lives which we can combine with 100 million patient records. We can combine our data sets together, including one of the largest democratized health records with electronic health records from Phytel, Truven, claims data, imaging data, genetics, medical health data and from all of that we can run analysis.”
By analyzing cloud-based health records “through advanced analytics and actionable insights”, IBM Watson Health says it will help providers meet new healthcare quality requirements and reimbursement schedules by achieving evidence-based, quality patient care outcomes, in a value-based care model rather than the traditional fee-for-service model.
“We’re now deeply embedded in the health-care system,” John Kelly, IBM’s SVP of solutions portfolio and research, told the Wall Street Journal. “We’ve been systematically putting together the platform and the underlying data ... to reduce costs and improve outcomes.”
IBM Watson Health is not only compiling large clinical data sets through company acquisitions, though. It’s also partnering with technology firms and medical device manufacturers to acquire health data. This ecosystem of partnerships includes several big names in the sector, including Apple, Medtronic, and Johnson & Johnson (J&J).
For example, in diabetes management, IBM and Medtronic are working on a cloud-based solution wherein Watson will analyze data from Medtronic insulin pumps. Separately, IBM will also pull and study real-time data from Novo Nordisk devices.
IBM Watson Health currently is a fairly small contributor to IBM’s total business. But company executives are bullish on the future, especially regarding a sector that many consider ripe for disruption.
“Healthcare is a new revenue and profit opportunity for us as we change the face of healthcare through our cognitive platform to provide value to providers, payers, and partners,” IBM SVP and CFO Martin Schroeter told analysts in an earnings call last month.
Tech giant Google clearly is thinking the same, as it continues to invest heavily in medtech, biotech, and digital health companies. As is Apple, Microsoft, and Samsung, with their own health-focused initiatives.
Image credit: IBM