IBM Acquires Truven Health Analytics: Here's Why It's Spending $2.6 Billion


IBM has agreed to buy data company Truven Health for $2.6 billion in cash in a move that would allow the American tech company to expand its repository of medical data for the Watson Health unit.

It is the fourth major purchase that IBM has made in less than a year since directing its focus on acquiring health-related data.

"We're now deeply embedded in the health care system," John Kelly, senior vice president of IBM's solutions portfolio and research, said.

As part of the purchase, Truven will turn over its library of health industry data collected from more than 8,500 insurers, hospitals and government agencies to IBM, which in turn will be included in Watson Health's own database. The deal is expected to wrap up later in the year.

IBM's acquisition of Truven is the largest deal the tech company has made in three years since Ginni Rometty took over the reins as chief executive.

During the period, IBM has focused on investing in the data and technology sectors to help improve its products and services related to the health care industry, particularly its Watson Health unit.

Watson is the tech company's AI-based computing machine capable of interpreting, analyzing and even predicting patterns in various data. By adding information gathered from data firms such as Truven, IBM will help Watson perform better and provide more valuable insights on certain matters.

"Most of the data in health care is in disparate databases," Watson Health general manager Deborah DiSanzo explained. "The strategy of IBM is to bring this data together and democratize it so that both IBM and our ecosystem of partners can build health solutions on top of it."

IBM's Watson unit is considered to be one of the company's major efforts to bounce back from the recent declines it has experienced for the past 15 straight quarters.

Last year, the tech company acquired Merge Healthcare's medical imaging technology and data for $1 billion. It has also bought population health technology vendor Phytel as well as big data analytics firm Explorys.

IBM hopes to use all of the health-related data it has amassed in these separate deals to develop insights into value-based care. This is in response to U.S. government's decision to shift its focus toward such programs and allow patients to pay based on the outcomes of health care services provided to them.

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