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IBM Discloses $1 Billion Merge Healthcare Acquisition


On Thursday, IBM announced a billion-dollar deal in which it will acquire Merge Healthcare Inc. (MRGE.O), a medical imaging company, to merge with its current health analytics unit powered by the Watson supercomputer. Watson’s computing system, which is cloud-based, will harbor the wide array of data and images from Merge Healthcare’s imaging platform, and the supercomputer itself is expected to showcase its new ability to understand pictures and videos in addition to its primary focus of natural language.

Tech Crunch reports that IBM’s acquisition of Merge Healthcare still has to pass shareholder and regulatory approval, but if it does manage to pass, the acquisition is expected to be finalized later this year.

According to IBM, Merge’s imaging technology is currently used in more than 7,500 facilities across the U.S. and over 30 billion images, from x-rays to MRIs and CT scans, have been processed to-date. The New York Times reports that as much as ninety-percent of all current medical data exists in the form of images, according to IBM researchers, and the company’s acquisition of Merge is an excellent opportunity for Watson to help bring health care optimization in this direction.

The alliance will also help physicians and researchers to better collaborate and share medical data for analysis, including patients’ medical and family histories, data of similar patients, and trials and outcomes of clinical experiments and research.

Doughtery analyst Brooks O’Neill was quoted by Reuters as having written in a note that while imaging “is central to effective diagnosis and treatment,” it’s “increasingly important to share these images between providers to deliver high-quality, cost-effective care.”

Imaging is central to effective diagnosis and treatment (…) but it is increasingly important to share these images between providers to deliver high quality, cost-effective care

The Merge acquisition is IBM’s third of the year in the health care IT sector and fifth overall, not to mention the only one which has had its sum disclosed. First came the joining of language processing company AlchemyAPI in March, followed by health care management and analytics companies Explorys and Phytel in April and private cloud service Bluebox in June.

IBM also announced in early August a new partnership with CVS Health to develop “data-driven services” for those suffering from chronic health conditions such as heart disease and diabetes.

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