With Watson Health, IBM bets big on health care
CAMBRIDGE — When Deborah DiSanzo, a veteran Massachusetts health care technology executive, went looking for her next career move, she made what might seem like an unusual choice: IBM Corp.
But IBM’s shift from computer hardware to software and services has taken the New York company deep into the world of doctors, hospitals, and drug companies.
DiSanzo signed on as leader of its new health care division, called Watson Health, and got lucky when IBM decided to plant the unit’s headquarters in Kendall Square: no relocation necessary.
IBM is making a big bet on health care, and it’s doing it here in the technology and life sciences hub of Massachusetts. Since IBM Watson Health was launched in 2015, the company has made four acquisitions worth about $4 billion and forged numerous partnerships with major hospitals, drug makers, and other companies.
Hundreds of employees started moving into IBM Watson Health’s 165,000 square-foot headquarters this summer, with more scheduled throughout the year. Its block on Binney Street is expected to be home to at least 700 IBM employees.
Their ambitious task: to use IBM’s Watson supercomputer to find patterns in vast amounts of health care data and help those who provide care do so more efficiently and effectively.
“I have never seen any company ramp a health care business up this fast,” said DiSanzo, 56, who led Philips Healthcare in Andover before joining IBM.
IBM’s move, aided with $2.5 million in state tax breaks, comes as elected officials and business leaders focus on trying to expand Massachusetts’ digital health industry. This year, business leaders at the Massachusetts Competitive Partnership, a group of big-company CEOs, launched a nearly $26 million venture capital fund to invest in digital health startups, and the state agreed to spend $250,000 on two new accelerator spaces designed to help early-stage companies.
Massachusetts is already home to an estimated 260 companies in digital health — from startups to big firms like athenahealth Inc. in Watertown and Nuance Communications Inc. in Burlington — that develop software used in the health care industry. But many feel the sector is poised to grow as technology becomes more integral in health care. As health care payments continue to change, rewarding doctors and hospitals that keep costs under control while meeting quality scores, it is increasingly important for health care providers and insurers to track and mine patient data.
“Health care payment reform is driving change in the market, and making it so it’s really advantageous for health care providers to purchase technology that can help them control costs and improve health care quality,” said Laurance Stuntz, director of the Massachusetts eHealth Institute, a state agency.
As OptumInsight chief executive Bill Miller put it: Analytics “is not a buzz word anymore, it’s a necessity.”
OptumInsight is the technology and analytics division of Optum, a part of UnitedHealth Group, which opened an office this summer near Fenway Park. Optum has about 1,000 workers in and around Boston and plans to add at least 400 more over the next one to two years.
“Those types of anchor companies are a key piece of any innovation system,” Stuntz said, because they often acquire local startups and have seasoned executives who spin off new companies.
IBM is a relative newcomer to health care. Its Watson computer was celebrated five years ago for something very different: winning the TV game show “Jeopardy.” What makes Watson different from most other data-crunching software, IBM executives say, is that it can read and make sense of unstructured data, such as a doctor’s notes about a patient. The more data Watson reads, the more it learns, so its recommendations get better over time. IBM calls this cognitive computing.
At several hospitals in Asia, Watson is helping doctors stay current on the latest developments in cancer care. New drugs are being approved at such a rapid rate that even the most experienced doctors may find it difficult to keep up. Watson scans the latest medical information and shows physicians the most effective treatment options for a patient’s specific type of cancer.
This doesn’t necessarily save doctors time, because it still requires some manual data entry, but it’s a valuable tool for doctors seeking the latest information about cancer care, said Dr. Mark G. Kris, a medical oncologist at Memorial Sloan Kettering Cancer Center in New York who helped develop the system.
“You get a list of answers, and then a ranking, and the literature supporting each answer,” he said. “You have kind of an instant colleague, and for the patient that means an instant second opinion.”
IBM is also deploying Watson to help care providers interpret medical images, match patients with clinical trials, and monitor the health of groups of patients.
But getting doctors to adopt yet another new technology can be a tough sell, when many are already overwhelmed by learning new medical records and other programs. Companies like IBM still must prove the worth of their new systems, said Dr. John Halamka, chief information officer at Beth Israel Deaconess Medical Center.
“It’s very, very hard to assume that you take data of an unstructured form and a machine is going to be able to provide interpretation of that data,” Halamka said. “As with any new technology and the hype cycle, one has to set expectations appropriately.”
IBM’s bet on health care is critical as the company tries to revive its flagging sales.
DiSanzo, the general manager of IBM Watson Health, said there’s no market better than Massachusetts for IBM to head up its health care efforts. Some of the company’s business partners, including Marlborough-based Hologic Inc. and Boston Children’s Hospital, are located here.
“This is the hub of biotechnology and health care technology in the world,” said DiSanzo, who lives in Andover. “Being in the ecosystem makes it easier . . . You get things done faster. This is where innovation and speed and agility come from.”