IBM Watson Health Announces Plans to Acquire Truven Health Analytics for $2.6B, Extending Its Leadership in Value-Based Care Solutions

IBM Watson Health announced plans to acquire Truven Health Analytics, a leading provider of cloud-based healthcare data, analytics and insights for $2.6 billion. Truven will bring more than 8,500 clients, including U.S. federal and state government agencies, employers, health plans, hospitals, clinicians and life sciences companies to the IBM Watson Health portfolio.

Upon completion of the acquisition, IBM’s health cloud will house one of the world’s largest and most diverse collections of health-related data, representing an aggregate of approximately 300 million patient lives acquired from three companies1. IBM plans to integrate Truven’s extensive cloud-based data set spanning hundreds of different types of cost, claims, quality and outcomes information with its existing data sets.

Through the Watson Health Cloud, healthcare organizations will be able to take previously disparate data sets, including vast amounts of unstructured data, and combine them together to create unique insights that help inform a broad range of health decisions.

Truven Health Analytics represents IBM’s fourth major health-data related acquisition since launching the Watson Health unit in April 2015. Upon close, IBM will have invested more than $4 billion to acquire and build an unparalleled array of cognitive healthcare capabilities intended to help professionals improve health outcomes, control costs, and advance value-based care solutions.

Data and insights from Truven inform benefit decisions for one in three Americans. Upon close, the acquisition of Truven will bolster Watson Health’s global talent footprint to more than 5,000 employees, including hundreds of clinicians, epidemiologists, statisticians, healthcare administrators, policy experts and healthcare consultants who will join the IBM business unit. Truven’s cloud-based technology, methodologies and health claims data will be integrated into the Watson Health Cloud over time.

“With this acquisition, IBM will be one of the world’s leading health data, analytics and insights companies, and the only one that can deliver the unique cognitive capabilities of the Watson platform,” said Deborah DiSanzo, general manager for IBM Watson Health. “Truven’s impressive team, extensive client roster, and expansive data sets complement Watson Health’s broad-based team, capabilities and offerings. Together, we’re well positioned to scale globally and to build first-in-class offerings designed to help our clients apply cognitive insights in a value-based care environment.”

“The Truven Health Analytics team is eager to combine our capabilities and expertise with the Watson Health portfolio,” said Mike Boswood, President and CEO, Truven Health Analytics. “This will help catapult the industry forward to transform healthcare and to save and improve lives.”

The deal is projected to close later this year, subject to satisfaction of customary closing conditions and applicable regulatory reviews.

Watson Health Offerings Optimized for Value-Based Care

Value-based care is an emerging healthcare model that aims to improve the quality of care while controlling costs and driving better near- and long-term health outcomes for individuals. While traditional health systems have paid for volume based on a fee-for-service model, value-based care models use payment incentives that aim to advance quality outcomes at lower cost. This payment model requires that providers, payers and other stakeholders have evidence — data and insight — to document how specific elements of care contribute to achieving a target health outcome for a given cost.

Watson Health offerings will be optimized to help clients succeed in this environment by helping them achieve better patient outcomes at reduced cost through advanced analytics and actionable insights.

Truven Health Analytics is IBM’s fourth major health-related acquisition since launching its Watson Health unit in April 2015, following Phytel (population health), Explorys (cloud-based healthcare intelligence) and Merge Healthcare (medical imaging). In that time, Watson Health also has quickly compiled a marquee roster of partners and clients, including Apple, Medtronic, Johnson & Johnson, Novo Nordisk, and CVS Health.

Truven Health Analytics is headquartered in Ann Arbor, Michigan, with offices in Denver, Chica-go, Raleigh-Durham, and a center in India. Upon completion, IBM will purchase Truven from its current owner Veritas Capital.