IBM Acquires Truven In $2.6 Billion Patient Data Deal

In a move designed to bolster its Watson Health subsidiary, IBM has bought Truven Health Analytics for $2.6 billion. Truven maintains a record of cost and treatment data of over 200 million patients.

Truven is the fourth company purchased by IBM since they launched their Watson Health business last year. IBM has spent over $4 billion on the acquisitions, which also included Phytel – a Dallas-based software developer for patient care management – and the Cleveland Clinic spinoff company, Exploris.

According to IBM, Watson Health has amassed mostly US health data on “approximately 300 million patient lives.” Watson’s artificial intelligence software will be used to analyze the data, to identify ways to help physicians and other healthcare-providers improve care and reduce costs.

Despite declining revenue and lower-than-expected profits, Virginia M. Rometty – CEO of IBM – seems intent on transforming the artificial intelligence technology into a thriving business. IBM has started selling off its less profitable businesses – including semiconductor fabrication and industry-standard server computer manufacturing – which could admittedly explain some of the revenue decline.

Even so, IBM is still finding it challenging to replace some of its older businesses with newer technologies – including mobile software, cloud computing and data analytics – and still see financial growth. Watson Health is a member of IBM’s data analytics division, whose sales topped $18 billion in 2015.

According to John E. Kelly III, IBM’s senior vice president of research and new initiatives, the Truven acquisition, shows “we’re serious, and spending serious money to move fast in a whole new industry (healthcare) for IBM.” Kelly added that the Truven purchase complements Watson Health, as Explorys and Phytel contributed patients’ electronic medical record data.

Merge Healthcare – a software company focusing on medical imaging – was IBM’s other $1 billion acquisition. Kelly said the strategic buy provided Watson Health with health image data management knowledge. The payment records acquired from Truven include in-depth details including diagnosis, coding on disease types, prescribed medications and patient response to treatment data.

“It’s a very key cog to give us one of the most complete data sets on patients and health care in the world,” said Kelly. Many countries – including the US – are moving away from a fee-for-service model, and moving towards a reimbursement based on outcomes systems to improve healthcare.