Bloomberg News

IBM Enlists Watson Supercomputer Ahead of Pentagon Health Effort

April 24, 2014

International Business Machines Corp. (IBM:US) will add technology from its Watson supercomputer, known for beating humans on “Jeopardy!,” to its federal health unit before the Pentagon seeks bids on a $11 billion health-records project.

The world’s biggest computer services provider also is hiring Keith Salzman, a former chief medical information officer at the Army hospital in Tacoma, Washington, where the Pentagon plans to test the new health records project, for its U.S. federal team. Salzman will become the division’s chief medical officer, IBM said in a news release today.

IBM, whose U.S. agency contracts have slipped over the past two years, is making the changes as companies prepare to compete to deliver a new electronic medical-records system for the Defense Department. The lifecycle cost of the project may be as much as $11 billion, Jonathan Woodson, assistant secretary of defense for health affairs, said in testimony before a U.S. House appropriations subcommittee this month.

“You have to bring a lot to the table in federal health care,” Andrew Maner, IBM’s managing partner for its U.S. federal division, said in a telephone interview. “Watson is not going to implement an electronic medical-records solution, but it can be used to make clinicians better or more efficient.”

The Armonk, New York-based company, which had $1.2 billion in U.S. agency contracts during the fiscal year that ended Sept. 30, was the government’s No. 51 supplier, according to a Bloomberg Government ranking of the top 200 vendors released April 22. It slipped six spots from the prior year, when it had about $1.5 billion in U.S. contracts.

‘Jeopardy’ Success

IBM will offer technology from its Watson Group to aggregate and study clinical information for U.S. health agencies, according to the press release. Watson, an artificial-intelligence system best known for its success on the “Jeopardy!” television quiz show, can analyze large amounts of data. That may help cut costs, speed medical research and improve care, the company said in its release.

Maner declined to comment on whether IBM would compete for the records project or include Watson technology in a potential bid. It wants to see the government’s solicitation for the work first, he said.

If IBM does bid, “you need to show up with everything,” Maner said. That includes the right commercial and federal experience, the best bidding partners, as well as “innovative technology,” such as Watson, he said.

Information technology services companies such as Hewlett-Packard Co. (HPQ:US), based in Palo Alto, California; Leidos Holdings Inc. (LDOS:US), based in Reston, Virginia; and IBM are likely to bid on the Pentagon health records work, said Brian Friel, a Bloomberg Industries analyst.

To contact the reporter on this story: Kathleen Miller in Washington at kmiller01@bloomberg.net

To contact the editors responsible for this story: Stephanie Stoughton at sstoughton@bloomberg.net Michael Shepard, Don Frederick


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