IBM has made a sizable new investment in its Watson Health strategy, with the $2.6 billion acquisition of Truven Health Analytics. Here are the key details from IBM's announcement:
Truven will bring more than 8,500 clients, including U.S. federal and state government agencies, employers, health plans, hospitals, clinicians and life sciences companies to the IBM Watson Health portfolio.
Upon completion of the acquisition, IBM’s health cloud will house one of the world’s largest and most diverse collections of health-related data, representing an aggregate of approximately 300 million patient lives acquired from three companies. IBM plans to integrate Truven’s extensive cloud-based data set spanning hundreds of different types of cost, claims, quality and outcomes information with its existing data sets.
Through the Watson Health Cloud, healthcare organizations will be able to take previously disparate data sets, including vast amounts of unstructured data, and combine them together to create unique insights that help inform a broad range of health decisions.
Truven Health Analytics represents IBM’s fourth major health-data related acquisition since launching the Watson Health unit in April 2015. Upon close, IBM will have invested more than $4 billion to acquire and build an unparalleled array of cognitive healthcare capabilities intended to help professionals improve health outcomes, control costs, and advance value-based care solutions.
Value-based care is an emerging healthcare model that aims to improve the quality of care while controlling costs and driving better near- and long-term health outcomes for individuals. While traditional health systems have paid for volume based on a fee-for-service model, value-based care models use payment incentives that aim to advance quality outcomes at lower cost. This payment model requires that providers, payers and other stakeholders have evidence — data and insight — to document how specific elements of care contribute to achieving a target health outcome for a given cost.
A Broad Reach
Truven "in one way or another" is involved in health benefit decisions for one in three Americans, and some of its customers have been with the company for nearly 30 years,Truven CEO Mike Boswood said on a conference call with analysts.
While Truven has a robust services business, IBM doesn't expect much overlap with health care specialists in its Global Business Services division, as those workers bring a broader set of of business transformation and systems integration skills to the table, said Dave Liederbach, GM of Watson Health.
Nor should there be much redundancy between Truven's platform and the assets gained though the acquisitions of Phytel and Explorys, Liederbach said. Phytel provides health population management software while Explorys focuses on big data healthcare analytics. "There's more synergy than overlap," he said.
Initially IBM will use a federated model to tie the three products together, with an eye on eventually moving to a common technology platform. All three have common elements such as Hadoop and Spark under the hood, which should make that work easier, Liederbach said.
Analysis: With Investments Made, Now Its Showtime for Watson Health
Healthcare is already the most mature and well-supported use case for IBM’s Watson cognitive technology, and Truven gives Watson "more assets to drive self-learning, cognitive applications," notes Constellation Research VP and principal analyst Doug Henschen.
Explorys gave IBM one of the largest clinical data sets in the world, with data from 26 healthcare systems—privacy-protected data used to identify patterns in diseases, treatments and outcomes," Henschen adds. "Truven not only brings IBM more data and analytics capabilities, it gives it more healthcare expertise, including hundreds of clinicians, epidemiologists, statisticians, policy experts and consultants expected to join Watson Health."
"We continue to see IBM pour investment into its Watson initiatives," Henschen says. "What we hope to see more of, at IBM’s World of Watson event set for May, is proven deployments with customers pointing to returns on investments and, in healthcare, dramatic differences in care and patient health tied to cognitive capabilities."
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