Watson Health Sale Signals More Pragmatic AI for Healthcare

Healthcare artificial intelligence is entering a more pragmatic era following IBM's sale of the parts of its Watson Health assets to a private equity firm.

Jessica Davis, Senior Editor

January 27, 2022

5 Min Read
x-ray film of the head computed tomography
Georiy Datsenko via Alamy Stock Photos

At one time IBM Watson Health was featured in articles that claimed it might cure cancer. But the splashy coverage of IBM’s artificial intelligence brand aimed at the healthcare industry was maybe an instance when the hype about a particular technology -- AI -- got ahead of that technology’s actual capabilities.

After a few high-profile public failures over the past several years, IBM has announced that it is selling the parts of its Watson Health business to private equity firm Francisco Partners -- a sale that many in the industry had expected for the past year. 

The assets sold include data sets and products from the many acquisitions IBM completed to roll into the Watson Health brand including Health Insights, MarketScan, Clinical Development, Social Program Management, Micromedex, and imaging software. Francisco Partners will employ key members of the Watson Health team and stand up its own business in the future, the companies said in the announcement of the deal. IBM will retain its Watson brand, which includes many other vertical industry offerings, as well as continuing to support its existing healthcare clients and partners with its many other products.

Watson Tackles Cancer

Coming off its Jeopardy! victories in 2011 -- both in the game itself and in turning a corporate software into something of a celebrity -- Watson may have seemed poised for solving the world’s bigger problems, like predicting the weather and curing cancer. 

“This is just the story of the hype cycle playing itself out again,” says Gartner research VP Jeff Cribbs. “What happened is the marketing got ahead of the research and engineering, and that eventually caught up with the execution.”

Right out of the gate IBM chose a moon-shot type of problem for Watson Health -- cancer -- partnering with flagship customer and reference partner MD Anderson Cancer Center to use Watson Health to expedite clinical decision-making and match patients with clinical trials.

Can Watson Win Oncologists' Support?

There are some tasks in healthcare that AI does very well -- image classification and natural language processing, for instance. But the project called for Watson Health to perform tasks such as treatment decision support, says Cribbs.

“Those are not just perceptive tasks, those are executive tasks that require a lot of steps and rules-based in between the perceptive pieces,” Cribbs says. “That was a lot of scope to take on with the state of AI today.”

Paddy Padmanabhan agrees. He is the founder and CEO of Damo Consulting, a growth strategy and digital transformation advisory firm that works with healthcare organizations and other tech companies.

“One of the challenges with oncology is to be able to come up with insights that an oncologist will find useful or valuable,” he says. “Cancer care is very complex, and human judgment and intuition is very important. If the technology can’t enable the humans to perform better, or if the recommendations don’t seem right, the oncologists won’t use it. If they don’t use it, it’s a downward spiral for the technology.”

Brand Troubles

The issues MD Anderson faced with Watson Health were very public, and that may have led to damage to the reputation of the Watson Health brand, Padmanabhan says.

“The negative press from the MD Anderson relationship raised a lot of questions in people’s minds about whether they should go with Watson Health because ‘they didn’t seem to have a good time at MD Anderson’” he says. “‘Maybe the technology is not ready? Not to mention all the costs. Do we know what that will deliver?’”

Padmanabhan compares this health care solution and partnership to other big tech/ healthcare partnerships such as Google and the Mayo Clinic, announced in September 2019. The strategic partnership combines Google’s cloud and AI capabilities with Mayo’s clinical expertise to improve the health of people and communities by understanding insights at scale, according to a blog post announcing the deal. Sounds like another moon shot, but this one had five more years of R&D behind it.

Microsoft this month announced the Artificial Intelligence Industry Innovation Coalition, bringing together several healthcare and academic institutions “to advance health by identifying and addressing significant societal and industry barriers,” according to the announcement.

Clearly healthcare is a field where big tech companies believe artificial intelligence can make a difference. Just what that will look like in the future is a different question.

Healthcare AI Gets Pragmatic

Cribbs says the use cases he is seeing for artificial intelligence in enterprise organizations including healthcare have become more practical in the past few years.

“The healthcare artificial intelligence market is moving rapidly from vision to execution,” Cribbs says. “Three or four years ago it was quite easy to walk into a healthcare executive board room and really wow people with some blue-sky thinking -- innovative use cases and new approaches to novel data sources -- the big data shotgun.”

But the market is different today.

“That is not the buying market or the market need today,” he adds. “Today it really comes down to what near-term results can we achieve by utilizing this new tool.”

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About the Author(s)

Jessica Davis

Senior Editor

Jessica Davis is a Senior Editor at InformationWeek. She covers enterprise IT leadership, careers, artificial intelligence, data and analytics, and enterprise software. She has spent a career covering the intersection of business and technology. Follow her on twitter: @jessicadavis.

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