Top executives of IBM’s Watson Health division told employees at a meeting on Wednesday that they are scaling back the part of their business that sells tools to help hospitals manage their pay-for-performance contracts, citing softening demand in the market, according to a source who attended the meeting.

This represents a major shift in business strategy for Watson Health, which has invested billions of dollars to win lucrative contracts from hospitals seeking to reform their payment systems to focus on patient outcomes, instead of the volume of care they provide. The effort was central to Watson Health’s efforts to help realize the promise of personalized medicine and improve the efficiency of care.

Unlock this article by subscribing to STAT Plus and enjoy your first 30 days free!

GET STARTED

What is it?

STAT Plus is STAT's premium subscription service for in-depth biotech, pharma, policy, and life science coverage and analysis. Our award-winning team covers news on Wall Street, policy developments in Washington, early science breakthroughs and clinical trial results, and health care disruption in Silicon Valley and beyond.

What's included?

  • Daily reporting and analysis
  • The most comprehensive industry coverage from a powerhouse team of reporters
  • Subscriber-only newsletters
  • Daily newsletters to brief you on the most important industry news of the day
  • Online intelligence briefings
  • Frequent opportunities to engage with veteran beat reporters and industry experts
  • Exclusive industry events
  • Premium access to subscriber-only networking events around the country
  • The best reporters in the industry
  • The most trusted and well-connected newsroom in the health care industry
  • And much more
  • Exclusive interviews with industry leaders, profiles, and premium tools, like our CRISPR Trackr.

Leave a Comment

Please enter your name.
Please enter a comment.

  • Interesting how many important details are here. Everyone is interested how will clients react on this shipwreck painted with flowers and will they stay believing that now it will be even better (better from what?). Only correction is that decreased demand is for a value based care, but generally entire WH was betting on “outcomes” and helping businesses with improving outcomes. Now we are trying to refocus from entire outcomes (value based care) business to something else and no one knows precisely what that is except vague “analytics”. Our data acquisition and processing is still in very early stage. All employees are invited to start learning AI so based on that I would not guess that anyone can expect some deliverables soon. AI is generally in our thoughts and here and there implemented with a lot of issues. For that reason it is very important for our clients to continue paying indefinitely and we will always find some excuse why we are not yet there. All of us remained after this very impactful resource action severed high percentage of our coworkers (many in key technical positions) are expecting new resource actions and everything else is just PR, and I can tell you: a brilliant one!

Sign up for our Daily Recap newsletter

A roundup of STAT’s top stories of the day in science and medicine

Privacy Policy