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.

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  • 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!

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