Dive Brief:
- Officials at IBM’s Watson Health are citing soft product demand for a decision to pare down its hospital business, which produces tools to assist hospitals in managing pay-for-performance contracts, Stat reported.
- Employees were informed of the move during a June 13 meeting to discuss Watson Health’s future following layoffs across the country, according to an unnamed source who spoke to Stat. Executives reportedly cited changes to the Affordable Care Act, but were vague on details regarding what prompted the decision to scale back the hospital business.
- The move marks a turnabout for a company that has invested heavily to get contracts with hospitals making the shift to value-based care. Going forward, Watson Health may focus more on tools that help doctors improve patient care, the source said. An IBM spokesman told the Herald Sun that the company wants to focus on “more technology-intensive offerings, simplified processes and automation to drive speed.”
Dive Insight:
Watson Health scaling back its hospital business is a blow not just to the company, but also to the value-add proposition of AI in the clinical space.
A number of investigations have dampened expectations for Watson Health’s portfolio of products. A 2017 Forbes report found the company’s partnership with MD Anderson Cancer Center was falling short on its goals. A Stat investigation later that year found Watson Health has struggled to learn about different cancer types, with a relatively small number of hospitals actually adopted its oncology system. Foreign providers have also complained that the supercomputer’s recommendations favor American patients and treatment methods.
That said, AI is still going to be used in healthcare, it just might be for different tasks or workflows. For example, an algorithm developed by Google that draws on EHRs, patient notes and other sources of personal data is helping hospitals predict patient outcomes, including a patient’s likelihood of dying. The tool could help doctors save lives and cut down on time spent predicting possible outcomes.
Venture capitalist Vinod Khosla infamously predicted in 2016 that algorithms will eventually replace up to 80% of what doctors do. Already, they are being used to interpret imaging scans and diagnose diseases — reducing medical errors and allowing doctors to focus on their patients’ care. One day, they could be as ubiquitous in healthcare as apps on a smart phone, allowing doctors and other healthcare providers to keep tabs on patients and their treatments on a range of issues and with greater accuracy than is possible manually.