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Watson to gain ability to “see” with planned $1B acquisition of Merge Healthcare
08-07-2015
by Lloyd Dunlap  |  Email the author
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ARMONK, N.Y. & CHICAGO—IBM today announced that Watson will gain the ability to “see” by bringing together Watson’s advanced image analytics and cognitive capabilities with data and images obtained from Merge Healthcare Incorporated’s medical imaging management platform.  IBM plans to acquire Merge, a leading provider of medical image handling and processing, interoperability and clinical systems designed to advance healthcare quality and efficiency, in an effort to unlock the value of medical images to help physicians make better patient care decisions
 
The vision is that these organizations could use the Watson Health Cloud to gain new insights from a consolidated, patient-centric view of current and historical images, electronic health records, data from wearable devices and other related medical data, in a HIPAA-enabled environment.
 
Merge’s technology platforms are used at more than 7,500 U.S. healthcare sites, as well as most of the world’s leading clinical research institutes and pharmaceutical firms to manage a growing body of medical images.
 
Under terms of the transaction, Merge shareholders would receive $7.13 per share in cash, for a total transaction value of $1 billion. The closing of the transaction is subject to regulatory review, Merge shareholder approval, and other customary closing conditions, and is anticipated to occur later this year.  It is IBM’s third major health-related acquisition—and the largest—since launching its Watson Health unit in April, following Phytel (population health) and Explorys (cloud-based healthcare intelligence).
 
“As a proven leader in delivering healthcare solutions for over 20 years, Merge is a tremendous addition to the Watson Health platform.  Healthcare will be one of IBM’s biggest growth areas over the next 10 years, which is why  we are making a major investment to drive industry transformation and to facilitate a higher quality of care,” said John Kelly, senior vice president, IBM Research and Solutions Portfolio. “Watson’s powerful cognitive and analytic capabilities, coupled with those from Merge and our other major strategic acquisitions, position IBM to partner with healthcare providers, research institutions, biomedical companies, insurers and other organizations committed to changing the very nature of health and healthcare in the 21st century. Giving Watson ‘eyes’ on medical images unlocks entirely new possibilities for the industry.”
 
The planned acquisition bolsters IBM’s strategy to add rich image analytics with deep learning to the Watson Health platform—in effect, advancing Watson beyond natural language and giving it the ability to “see.”
 
Medical images are by far the largest and fastest-growing data source in the healthcare industry and perhaps the world. IBM researchers estimate that they account for at least 90 percent of all medical data today, but they also present challenges that need to be addressed. The volume of medical images can be overwhelming to even the most sophisticated specialists. Radiologists in some hospital emergency rooms are presented with as many as 100,000 images a day. Meanwhile, the tools to help clinicians extract insights from medical images remain very limited, requiring most analysis to be done manually. At a time when the most powerful insights come at the intersection of diverse data sets (medical records, lab tests, genomics, etc.), medical images remain largely disconnected from mainstream health information.
 
IBM plans to leverage the Watson Health Cloud to analyze and cross-reference medical images against a deep trove of lab results, electronic health records, genomic tests, clinical studies and other health-related data sources, already representing 315 billion data points and 90 million unique records.
 
Merge’s clients could compare new medical images with a patient’s image history as well as populations of similar patients to detect changes and anomalies. Insights generated by Watson could then help healthcare providers in fields including radiology, cardiology, orthopedics and ophthalmology to pursue more personalized approaches to diagnosis, treatment and patient monitoring.
 
Cutting-edge image analytics projects underway in IBM Research’s global labs suggest additional areas where progress can be made.  They include teaching Watson to filter clinical and diagnostic imaging information to help clinicians identify anomalies and form recommendations, which could help reduce physician viewing loads and increase physician effectiveness.
 
“As Watson evolves, we are tackling more complex and meaningful problems by constantly evaluating bigger and more challenging data sets,” Kelly said. “Medical images are some of the most complicated data sets imaginable, and there is perhaps no more important area in which researchers can apply machine learning and cognitive computing. That’s the real promise of cognitive computing and its artificial intelligence components—helping to make us healthier and to improve the quality of our lives.”
 
IBM’s Watson Health unit plans to bring together Merge’s product and solution offerings with existing expertise in cognitive computing, population health, and cloud-based healthcare intelligence offerings to:
• Offer researchers insights to aid clinical trial design, monitoring and evaluation;
• Help clinicians to efficiently identify options for the diagnosis, treatment and monitoring of a broad array of health conditions such as cancer, stroke and heart disease;
• Enable providers and payers to integrate and optimize patient engagement in alignment with meaningful use and value-based care guidelines; and
• Support researchers and healthcare professionals as they advance the emerging discipline of population health, which aims to optimize an individual’s care by identifying trends in large numbers of people with similar health status.
 
“Merge is widely recognized for delivering market leading imaging workflow and electronic data capture solutions,” said Justin Dearborn, Merge CEO. “Today’s announcement is an exciting step forward for our employees and clients.  Becoming a part of IBM will allow us to expand our global scale and deliver added value and insight to our clients through Watson’s advanced analytic and cognitive computing capabilities.”
 
“Combining Merge’s leading medical imaging solutions with the world-class machine learning and analytics capabilities of IBM’s Watson Health is the future of healthcare technology,” said Michael W. Ferro, Jr., Merge’s chairman. “Merge’s leading technology and proven expertise represent a unique combination of assets that will deliver unparalleled value to Watson Health clients. Together, we will unlock unprecedented new opportunities to improve patient diagnostics and deliver enhanced care.”
 
A leading expert from Frost & Sullivan’s Advance Medical Technology, Nadim Daher, comments on the acquisition.
 
“Its acquisition by IBM Watson Heath is the culmination for Merge Healthcare of a long series of mergers, acquisitions and industry partnerships over the last several decades. Merge’s operation going forward as the imaging arm of Watson Health stands every chance to be synergistic in many ways.”
 
“As a best-of-breed imaging informatics company dedicated to advancing the field of medical imaging, Merge will be able to deliver industry-leading analytics capabilities to its imaging customers and to apply its imaging expertise within the broader context of health IT.”
 
“For IBM, the acquisition extends its access to a large new U.S. customer base, and increases its competencies in drug development and clinical trials. In additional, this provides new avenues of growth for Watson Health through the inclusion of imaging.”
 
“This acquisition should come as great news for the medical imaging community as well, as it reinforces the notion that medical imaging has a lot to contribute to healthcare’s biggest initiatives, such as population health, personalized medicine, IT interoperability and health analytics.”
 
“Indeed, these great challenges that healthcare is bound to face over the next decade, cannot be met unless every specialty, including imaging, stands up to contribute its value, its strength and its insight to the broader effort.”
 
Merge is a leading provider of innovative enterprise imaging, interoperability and clinical systems that seek to advance healthcare. Merge’s enterprise and cloud-based technologies for image-intensive specialties provide access to any image, anywhere, any time. Merge also provides clinical trials software with end-to-end study support in a single platform and other intelligent health data and analytics solutions. With solutions that have been used by providers for more than 25 years, Merge is helping to reduce costs, improve efficiencies and enhance the quality of healthcare worldwide.
 
Watson is the first commercially available cognitive computing capability. The system, delivered through the cloud, analyzes high volumes of data, understands complex questions posed in natural language, and proposes evidence-based answers. Watson continuously learns, gaining in value and knowledge over time, from previous interactions.
 
In January 2014, IBM launched the IBM Watson unit, a business dedicated to developing and commercializing cloud-delivered cognitive computing technologies. The move signified a strategic shift by IBM to deliver a new class of software, services and apps that improves by learning, and discovers insights from massive amounts of Big Data. As part of the unit, the company has increased the number and diversity of cognitive computing services delivered to its partners, adding new beta Watson services in February 2015, and scalable deep learning APIs with the acquisition of AlchemyAPI in March 2015.
 
In April 2015, the company continued to build on its strengths in cognitive computing, analytics, security and cloud with the launch of IBM Watson Health and the Watson Health Cloud platform.  The new unit will help improve the ability of doctors, researchers and insurers to innovate by surfacing new insights from the massive amount of personal health data being created daily.  The Watson Health Cloud allows this information to be anonymized, shared and combined with a dynamic and constantly growing aggregated view of clinical, research and social health data.
 
Code: E08071501

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