“For the past 10 years, we have been working on that area,” Ebadollahi said. “We have very advanced machine learning, pattern recognition, on imaging and video in general, most especially in medical imaging. Now, this intent to acquire Merge will bring a conduit to attach those technologies coming out of our research.”
Merge received about 85% of its roughly $212 million in sales last year from its mainline healthcare business unit, which sells imaging and interoperability software systems in radiology, cardiology, orthopedics, ophthalmology and laboratories, according to its Securities and Exchange Commission filings. Its data and analytics unit, which specializes in data-capture software for clinical trials, accounts for the remaining 15%.
Ebadollahi said IBM expects its first new solutions in Merge's product areas to hit the market in 2016.
The goal, however, is to combine imaging analytics with Watson's ability to analyze electronic health-record data and the most current clinical information gleaned from research, medical literature, best-practice guidelines, mobile wearable devices and any other available source that “will provide better and more in-depth insights into the patient,” Ebadollahi said.
IBM is buying a formerly troubled and money-losing company that's managed to claw its way back to profitability.
Merge lost money in 2013, nearly $39 million, but lost only $403,000 in 2014 after rigorous cost cutting and despite an 8.4% reduction in net sales from 2013 to 2014, according to its SEC filings. For the first six months of 2015, Merge reported net income of nearly $13.3 million.
In recent years, IBM has entered into a number of high-profile alliances with leading academic medical centers to help “teach” healthcare to Watson, which gained fame by defeating human contestants in the TV trivia game show "Jeopardy."
In 2013, the Cleveland Clinic entered into a partnership with IBM to use Watson in a number of pilots, as a diagnostic support tool and to analyze data in EHR systems.
Last year, IBM introduced Watson to the New York Genome Center, a consortium of 16 healthcare organizations doing genetic research.
Mayo Clinic, Rochester, Minn., has teamed with IBM to use Watson in a pilot project this year to identify cancer patients for appropriate clinical trials.
Despite the hype around Watson, there is plenty of room for real solutions in image-reading automation and support, according to Dr. William Bria, a critical-care pulmonologist, a specialty that routinely uses images as a diagnostic tool. Bria, as physician informaticist, worked with Watson as the former chief medical officer for systems integrator Dataskill.
At one time, a “fantastic X-ray reader” was venerated among clinicians, but “there's a lot more data inside our imaging technology today than there ever was before,” said Bria, now executive vice president of medical informatics and patient safety for the College of Health Information Management Executives, a professional association for hospital chief information officers. “Radiologists will hate to hear me say this, but things have gone to a state where they could use an aid,” he said.
A computerized decision-support tool to help read an image could pick up what a specialist might miss because they're focused on their own perspective, he said. A pulmonologist could be focused on an image of the lungs, and miss something unrelated on the scan, Bria said. “It probably happens more than we want to admit.”
For example, a scan of the lungs might catch a piece of the patient's arm and the computer might pick up that “there's a bulge on it,” Bria said. “Why wouldn't we want to have that? Let's do it. It's past time.”
