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IBM adds to healthcare capabilities with Truven buy

Strikes $2.6bn deal for US healthcare analytics firm

IBMIBM has continued its push into the healthcare sector with a $2.6bn agreement to buy Truven Health Analytics, its biggest acquisition for several years.

The deal gives IBM and its recently formed Watson Health division access to more than 8,500 clients spanning hospitals, employers and government agencies, along with four petabytes of healthcare claims and administration data.

It is the fourth and largest acquisition in healthcare since IBM formed Watson Health just under a year ago - having already snapped up Merge for $1bn as well as Phytel and Explorys for an undisclosed amount - and takes its total spend to date in this area to around $4bn.

"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", said Martin Schroeter, IBM's senior vice president and chief financial officer.

The company's aim is to apply machine learning at scale - using the Watson supercomputer's cognitive capabilities - to gather new insights through the analysis of 'big data' and help deliver effective - and cost-effective - healthcare.

That approach has already won Watson Health some partnerships with pharma companies, including a project with Novo Nordisk on a digital platform to help manage diabetes, an eHealth alliance with Teva and a clinical trial recruitment collaboration with ICON.

IBM said that when the Truven deal closes later this year its healthcare cloud will incorporate data on 300m patient lives. This will be added to Watson's dataset and will be used to shift payments for healthcare away from a fee-per-service model and towards 'value-based models' - in other words paying for positive health outcomes that - hopefully - come with a lower price tag.

"With this acquisition, 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", said Deborah DiSanzo, general manager for IBM Watson Health.

IBM is not the only tech giant with aspirations in health settings. Apple's Verily unit is investing in a string of health-related projects, including an NHS project in telehealth.

Meanwhile Qualcomm has signed deals with Novartis for a connected asthma inhaler - part of what it describes as the Internet of Medical Things - and has a deal with Roche on remote health monitoring. It is also rumoured to be on the brink of forming a $1bn joint venture with GlaxoSmithKline (GSK).

Article by
Phil Taylor

23rd February 2016

From: Sales

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