IBM WATSON HEALTH - The rise and fall

Author.   Ron Miller

IBM Watson Health Begins To Take Shape

Mike Rhodin, senior vice president of IBM's Watson Business Group, announced Watson Health at the HIMSS conference Monday.

During 2015 at the HIMSS conference IBM announced a new business unit, Watson Health, that will offer cloud-based access to its Watson supercomputer for analyzing healthcare data.  The Watson Health Cloud will be an open source but secure platform on which care providers and researchers can share and analyze health data for greater insights into trends to improve individual and overall patient outcomes. IBM, which made the announcement at the Healthcare Information Management Systems Society (HIMSS) conference in Chicago, also said it has acquired big data healthcare analytics providers Phytel and Explorys, whose software will be used in concert with Watson Health.

The Explorys platform enables healthcare systems to collect, link and combine data from hundreds of disparate sources across their enterprise and clinically integrated networks. This data will be derived from clinical, claims, billing, accounting, devices, community and patient information.

Phytel develops and sells cloud-based services that help healthcare providers coordinate care in order to meet new healthcare quality requirements and reimbursement models.

"Their data sets represent 90 million lives, primarily in this country," said Mike Rhodin, senior vice president of IBM's Watson Business Group.

Additionally, IBM announced three new partnerships with Apple, Johnson & Johnson, and Medtronic to optimize consumer and medical devices. 

IBM reportedly shopping Watson Health just as healthcare gets hot

IBM could be looking to sell the Watson Health division for a mere $1 billion, according to an Axios report. The question is why is IBM running away from the healthcare vertical just as it seems to be heating up, and for such a low price?

Just last month, Oracle spent $28 billion to buy digital health records company Cerner. Last spring, Microsoft spent close to $20 billion to buy Nuance, which is used heavily in the medical industry, boasting 10,000 healthcare customers. That’s huge money, suggesting that enterprise companies are looking to embrace the healthcare vertical and willing to spend big bucks to do it.

IBM launched Watson Health in April 2015 to much fanfare. It was supposed to take Watson, IBM’s artificial intelligence platform, and put it to work on healthcare problems. The argument went something like this. Even the best doctor can’t read all of the literature out there, but a computer can do it quickly, and could come up with suggested courses of action to augment the doctor’s expertise and produce better outcomes.

Francisco Partners scoops up bulk of IBM’s Watson Health unit

IBM is making this sale just as the healthcare vertical is heating up. Last year, Oracle bought health records company Cerner for $28 billion and Microsoft bought Nuance Communications in a deal valued at nearly $20 billion. While both deals are pending regulatory approval, it shows how much large companies value the health vertical. It went on to spend $1 billion on Merge Healthcare and wrapped up its spending, buying Truven Health Analytics the following year for $2.6 billion. Although the company had high hopes that Watson Health would help drive its artificial intelligence push, the unit failed to produce the results it was hoping for and when Arvind Krishna replaced Ginni Rometty as CEO in 2019, he had different priorities.

Despite much hype and hope AI is just not yet living up to it's potential. Most big players have invested large sums of money and after more than five years, willing to absorb losses and cut bait, moving on to bigger fish. In health care much consolidation has eliminated the small fry and even middle sized fish to go after fewer entities, not related to health care. Electronic health records, telehealth ventures and remote monitoring companies are next in the feeding frenzy.

As in the past large corporations who have little or no experience in health care, nor have any interest in the ethics of healthcare are seizing control and playing 'business as usual'

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