Just last month, I spoke about the underwhelming efforts of Big Tech in the healthcare space. In my Jan./Feb. editor’s letter, I mentioned the shuttering of Haven, Apple’s lackluster performance (regarding medical efforts), and IBM Watson’s overpromises for the healthcare space. It wasn’t all that long ago, many—myself included—were fascinated by the wonderous impact this industry could have on healthcare and how these “outsiders” could, one day, be among the leaders in the space. Now, it seems they can’t figure out how to make heads or tails of it. Or, at least, how to do it profitably.

And while the pursuit of better healthcare for all of mankind is noble, businesses exist to make money; if that isn’t happening, they don’t last.

Unfortunately, recent news provides yet another example of Big Tech’s potentially waning interest in the healthcare technology space. Or perhaps it simply signals a change in strategy in how the technology giants can best serve the sector.

The latest news has reports of IBM considering the sale of its Watson Health unit. According to a Wall Street Journal article, the firm’s new chief executive is seeking to “streamline the company and become more competitive in cloud computing.” According to the Journal’s report, the unit generates approximately $1 billion in annual revenue, but is not currently profitable.

IBM Watson Health is a collection of data-analytics based firms that were acquired and assembled together to form the unit. It includes companies such as Merge Healthcare, Phytel, and Truven Health Analytics, all of which play a role in helping hospitals, pharmaceutical firms, and insurance companies manage their data. Some point to IBM’s inability to form a truly cohesive unit from the multiple entities as a primary cause for the challenges it is experiencing with the business segment.

There’s also the issue of artificial intelligence in medtech and healthcare being still very much at the early stages. In the WSJ article, Bob Kocher said, “I believe that we’re many years away from AI products that really positively impact clinical care for many patients.” Kocher is a partner at venture-capital firm Venrock who focuses on healthcare IT and services investments, and who was a White House health adviser under President Barack Obama.

Whether IBM Watson Health is sold or not, it may reflect a change in Big Tech’s role in the healthcare space. Apple, IBM, Google, and Amazon may ultimately not become competitors to the likes of Medtronic, Boston Scientific, and Abbott. Rather, through partnerships, joint commercialization efforts, and collaboration in development, we may get a better view of the future of Big Tech and its relationship with traditional medical device manufacturers.

“If you look at where there’s been a lot of success in medical, it’s been around using AI to analyze an MRI or an X-ray,” Stephen Messer, co-founder and vice chairman of Collective—an AI company focused on optimizing the sales process in a range of markets—told the WSJ. Once the AI is trained, he said, “it’s very good at whatever it needs to find. It’s repetitive. These are the places where you’re having huge wins.”

This type of cooperation needs to occur, but it’s unlikely to happen in a siloed approach by either a medical device firm or a technology entity. True value will only be realized—in the near term, anyway—when both sides collaborate to improve a process, such as what’s happening in diagnostic imaging. the real value will be demonstrated when traditional medtech firms’  regulatory and clinical expertise is coupled with the analytics and data management skills of companies like Google and IBM.

There are other areas where both companies will benefit from the other’s specialized talents. As home healthcare grows, many medical device manufacturers lack experience in developing technologies used by an untrained population (as opposed to providing products for doctors and nurses). Bringing a firm like Apple to the development meeting can only benefit any company seeking to create healthcare products for the consumer, even if they don’t couple with the iPhone.

Similarly, we’ve seen successful implementation of clinical trials leveraging the iWatch to help monitor patient activity and compliance with trial instructions.

Cybersecurity is another area where Big Tech is well-equipped to aid device makers. As more medical products become connected, they will continue to be targets for hackers. As recent headlines have proved, this type of activity will only grow if not addressed by developers. Medtech needs to look to Big Tech for answers to this problem and incorporate the solutions available to them.

Hopefully, the medtech industry finds Big Tech to be a welcomed development partner rather than a potential competitor to be feared. That will ultimately enhance the care afforded to all. 

Sean Fenske, Editor-in-Chief
sfenske@rodmanmedia.com