By Erik L. Ridley, AuntMinnie staff writer

August 6, 2015 -- IBM is moving aggressively to expand the utility of its Watson artificial intelligence platform, inking a deal to acquire RIS/PACS and advanced visualization developer Merge Healthcare for a total of $1 billion in cash.

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.

IBM logo

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.

By being able to compare, for example, new images with a patient's history and populations of similar patients to detect changes and anomalies, Merge customers in radiology, cardiology, orthopedics, and ophthalmology will be able to provide more personalized diagnosis, treatment, and monitoring of patients, IBM said.

IBM also noted that image analytics projects in IBM Research's global labs are working to teach Watson to filter clinical and diagnostic imaging information to help clinicians identify anomalies and provide recommendations. By integrating Merge's technology with its cognitive computing, population health, and cloud-based healthcare intelligence tools, IBM hopes to offer insights that will improve clinical trial design, monitoring, and evaluation. The goal is also to help clinicians efficiently identify options to diagnose, treat, and monitor health conditions such as cancer, stroke, and heart disease, according to the vendor.

The integration would also help providers and payors optimize patient engagement in alignment with meaningful use and value-based care guidelines, as well as support researchers and healthcare professionals in advancing the concept of population health, IBM said.

For Merge, the acquisition would bring to a close a long, roller-coaster run as a large independent PACS firm. After starting out as a niche provider of connectivity technology, Merge grew extensively over the years, bolstered by acquisitions of companies such as DR Systems, Amicas, Cedara Software, Confirma, RIS Logic, and eFilm Medical.

If the deal is completed as expected later this year, Merge shareholders will receive $7.13 per share in cash, representing a premium of approximately 32% over yesterday's closing price. The deal is subject to regulatory review, Merge shareholder approval, and other customary conditions.

The acquisition will have a big effect on the imaging informatics market, said PACS consultant Michael Cannavo of Image Management Consultants.

"This changes the entire playing field in radiology and cardiology as well as with [vendor-neutral archives], interoperability, and a host of other areas," Cannavo said. "This adds a player with incredibly deep pockets and resources into the game and impacts every player, large and small alike."


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