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What Does IBM’s Acquisition of Merge Healthcare Say About the Healthcare IT Market?

What Does IBM’s Acquisition of Merge Healthcare Say About the Healthcare IT Market? | Healthcare and Technology news | Scoop.it

As if everyone’s heads in healthcare IT weren’t already spinning like that of Linda Blair in 1973’s “The Exorcist,” here comes yet another acquisition in healthcare IT, this time the Armonk, N.Y.-based IBM announcing on Thursday its acquisition of the Chicago-based Merge Healthcare.


All mergers and acquisitions are interesting, but this one offers particular facets worth pondering. First of all, of course, its timing, less than four months after that giant company had just swallowed up the Dallas-based Phytel and the Cleveland-based Explorys back in April, a move announced during the HIMSS Conference.


That double acquisition is one of the reasons that we editors at Healthcare Informatics made IBM one of our “Most Interesting Vendors” this year, as its trajectory has encapsulated some of the mergers and acquisitions that have taken place in order to give some vendors a particular edge as competition intensifies in the healthcare IT world. As Senior Editor Rajiv Leventhal wrote regarding IBM’s analytics push, “Enter the Watson Health Cloud, which IBM will sell to doctors, hospitals, insurers and patients. That offering will be the centerpiece of a new dedicated, Boston-area business unit, IBM Watson Health, which now includes both Explorys and Phytel.” Leventhal quoted Anil Jain, M.D., chief medical officer (CMO) for Explorys, as saying that “[IBM] is complimenting much of what we do around traditional analytics using machine learning algorithms with some of the cognitive computing and the Watson analytics that Watson Health group will be leveraging. We became the content that will fuel some of the next generation analytics that Watson has become famous for.”


In a blog published today on AuntMinnie.com, staff writer Erik Ridley wrote this: “For IBM's new Watson Health unit, the deal gives the company access to Merge's image management and analysis software and its installed base of more than 7,500 U.S. institutions, clinical research institutes, and pharmaceutical companies. IBM is adding Merge to other recent acquisitions, such as population health firm Phytel and cloud-based healthcare intelligence company Explorys.”

Ridley went on to note that “IBM plans to offer Watson Health Cloud to analyze and cross-reference images against lab results, electronic health records (EHRs), genomic tests, clinical studies, and other health-related sources. In aggregate, these represent 315 billion data points and 90 million unique records, according to the company. This could provide Merge's installed base with a useful consolidated, patient-centric view of current and historical images, EHRs, data from wearable devices, and other related medical data.”


So far, so good. I think that IBM is gaining clear advantage in acquiring Merge Healthcare at this time., as it brings imaging informatics into the fold and potentially will integrate elements of imaging informatics with its already-advancing work in analytics. Indeed, Joe Marion, a Wisconsin-based consultant who blogs regularly for Healthcare Informatics and who is one of the most knowledgeable observers of the imaging informatics sector around, sees clearly the advantages to this pairing. As Joe wrote Thursday in a blog on this site, “Today, IBM is a different company than it was thirty years ago, as is the healthcare industry.  Much of the “big iron” emphasis is gone, and the company has much more of a services focus these days.  Cloud computing was never a factor in the past, and today, coupled with Watson, it offers much more potential for delivery of storage and analytics solutions.”


Joe further noted that, “In the age of past efforts, there were much larger barriers between Information Technology (IT) and clinical departments.  That is why IBM chose to partner with GE to address RIS-PACS [radiology information system/picture archiving and communications system (issues)] previously, as the two complemented one another in terms of hospital administration emphasis.  Today, there is much more IT emphasis on clinical systems and their integration across the enterprise.  And,” he added, “the healthcare environment today is radically different than in the age of past efforts, given increased regulation and greater provider consolidation.  An IBM-Merge combination should have much broader appeal to integrated delivery networks (IDN’s) who might benefit from greater interoperability and better business analytics.”


I agree completely with Joe’s perspective on this. Now, what about Merge Healthcare itself? I’ve been following Merge very closely as a company for several years now. Merge has some very talented senior executives, and solutions that are respected and appreciated by providers. The challenge for the company’s senior management has been facing is the shifting landscape of the imaging informatics market right now. PACS solutions have become almost totally commoditized; I’m sure there are PACS systems that are at last marginally better than others, but, given the accelerating demands facing patient care organizations, the need to move quickly into accountable care- and population health-based arrangements, and clinicians’ demands for always-available computing, even significant solution quality differentiation is simply no longer enough (and let’s not even talk about how commoditized RIS solutions have become).


So, clearly, for senior executives at Merge, a respected company that has been going through some major management changes and has been treading water in a rapidly shifting imaging informatics vendor landscape, this deal makes a lot of sense, too.


The challenge now will be to make this pairing work for current Merge Healthcare customers and for IBM customers—and customers of the former Phytel and Explorys, too. We all know about the trajectories of healthcare IT vendors that have grown too rapidly through acquisition and that have ended up becoming a jumble of unintegrated parts.

IBM’s moves so far seem thoughtful and precisely judged. Only time will tell how everything turns out ultimately—and clearly, that will depend on execution. Skillful execution is to healthcare IT what location is to real estate—a fundamental element of success. And this trajectory for IBM is a fascinating one. So stay tuned—because this is going to be an interesting path ahead.

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IBM Announces Deal to Acquire Both Phytel and Explorys; Goal Is Data Transformation

IBM Announces Deal to Acquire Both Phytel and Explorys; Goal Is Data Transformation | Healthcare and Technology news | Scoop.it

Senior executives at the Armonk, N.Y.-based IBM announced in a press conference held on Monday afternoon, April 13, at the McCormick Place Convention Center in Chicago, during the course of the HIMSS Conference, that it was acquiring both the Dallas-based Phytel and the Cleveland-based Explorys, in a combination that senior IBM executives said held great potential for the leveraging of data capabilities to transform healthcare.


Both Phytel, a leading population health management vendor, and Explorys, a healthcare intelligence cloud firm, will become part of the new Watson Health unit, about which IBM said, “IBM Watson Health is creating a more complete and personalized picture of health, powered by cognitive computing. Now individuals are empowered to understand more about their health, while doctors, researchers, and insurers can make better, faster, and more cost-effective decisions.


In its announcement of the Phytel acquisition, the company noted that, “The acquisition once completed will bolster the company’s efforts to apply advanced analytics and cognitive computing to help primary care providers, large hospital systems and physician networks improve healthcare quality and effect healthier patient outcomes.”


And in its announcement of the Explorys acquisition, IBM noted that, “Since its spin-off from the Cleveland Clinic in 2009, Explorys has secured a robust healthcare database derived from numerous and diverse financial, operational and medical record systems comprising 315 billion longitudinal data points across the continuum of care. This powerful body of insight will help fuel IBM Watson Health Cloud, a new open platform that allows information to be securely de-identified, shared and combined with a dynamic and constantly growing aggregated view of clinical, health and social research data.”


Mike Rhodin, senior vice president, IBM Watson, said at Monday’s press conference, “Connecting the data and information is why we need to pull the information together into this [Watson Health]. So we’re extending what we’ve been doing with Watson into this. We’re bringing in great partners to help us fulfill the promise of an open platform to build solutions to leverage data in new ways. We actually believe that in the data are the answers to many of the diseases we struggle with today, the answers to the costs in healthcare,” he added. “It’s all in there, it’s all in silos. All this data needs to be able to be brought into a HIPAA-secured, cloud-enabled framework, for providers, payers, everyone. To get the answers, we look to the market, we look to world-class companies, the entrepreneurs who had the vision to begin to build this transformation.”

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Apple, IBM announce partnership with Japan Post to improve elderly care

Apple, IBM announce partnership with Japan Post to improve elderly care | Healthcare and Technology news | Scoop.it

Apple Inc and International Business Machine Corp have teamed up with Japan Post Holdings Co to improve caregiver and monitoring services for the elderly in Japan, the companies announced on Thursday.


IBM will work with Japan Post to develop iPad software that will enable Japan's national Post Office Watch service to better monitor elderly clients. Apple Chief Executive Tim Cook, IBM CEO Ginni Rometty and Japan Post Holdings President Taizo Nishimuro announced the initiative at a joint news conference at IBM's Watson New York City headquarters.


Cook touted iPhone and iPad sales in Japan but notably made little mention of the Apple Watch, his first new product since taking over the company after Steve Jobs' death in 2011. He touted the iPad as an integral tool for improving care of elderly family members and patients, and said Apple has seen a "significant uptake" of the iPhone and iPad in Japan.


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IBM wins 'foundation' role for NZ health IT cloud

IBM wins 'foundation' role for NZ health IT cloud | Healthcare and Technology news | Scoop.it

New Zealand's National Infrastructure Platform (NIP) for health is moving to an IBM-managed cloud, enabling a massive consolidation of datacentre facilities in the sector.

Announced on Tuesday by government-owned Health Benefits Ltd (HBL) and IBM, the National Infrastructure Platform will host applications and systems that New Zealand's 20 district health boards (DHBs) use to deliver healthcare.

DHBs will migrate from 40 datacentres to just two IBM-managed facilities -- one in Auckland and the other in Christchurch.

The current datacentres vary in size, age, quality, and adherence to standards, IBM and HBL said in a statement. The two IBM-managed facilities will offer higher security classifications, better reliability, and higher service levels.

Fifteen DHBs have given conditional approval, with four (Northland, Auckland, and counties Manukau and Waitemata) agreeing to use the NIP already.

Director of the National Health IT Board Graeme Osborne said a number of IT outages at DHBs in the last two years had an impact on the smooth delivery of health services.

"The improved resilience and strengthened disaster recovery capabilities of NIP will reduce the risk of IT outages affecting the efficient operation of health services," he said.

Southern DHB chief executive Carole Heatly said patient care is paramount, and the clinical benefits of a more stable and secure IT platform could not be understated.

Last February, Southern DHB's systems were out of action for 36 hours due to human error and a lack of maintenance. An audit report found that the systems were exposed to significant risk.

The IBM solution will aggregate each DHB onto infrastructure as a service (IaaS) aligned to the Government ICT Strategy and Action Plan to 2017. That will allow DHBs to purchase their IT infrastructure on demand without maintaining and owning their own.

IBM was named the preferred supplier last May.

Rob Lee, IBM New Zealand's managing director, said a "best-of-breed team" of global and local partners had been assembled to deliver the project, including Computer Concepts Ltd, Racemi, and Vocus-owned FX Networks.

NIP is forecast to provide financial benefits of NZ$23.9 million total cost of ownership over 10 years across all DHBs.

The transition to NIP will start from mid-2015, and is expected to take three years.


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