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Watson computer at IBM in New York CityWatson computer at IBM in New York City
NEW YORK CITY, NY- MAY 27: IBM Watson's computer housing case. IBM's Watson computer is best known for winning Jeopardy, unaware of time constraints, while playing against humans. Some of Watson's other features are based in problem solving across many different careers. A demonstration showed how quickly Watson is able to diagnose illnesses, and provided a real life case that took doctors and nurses six days to diagnose, and only ended with the correct diagnosis because a nurse had seen the disease before. Based on symptoms input, Watson was able to correctly diagnose in minutes. The demonstration took place at IBM Watson's New York City, New York office on May 27, 2015. (Photo by Andrew Spear for The Washington Post via Getty Images.)Andrew Spear — The Washington Post/Getty Images

Here’s How IBM Watson Health Is Transforming the Health Care Industry

As Watson Health hits its one-year anniversary, here's a look inside its approach to innovation.

Imagine if you had a rare, undiagnosed disease that’s stumped doctor after doctor. What if there were a single, secure database that could read your symptoms then run through thousands of clinical studies, similar patient records, and medical textbooks to present a risk-matched list of potential diseases?

Just one year after its launch, IBM Watson Health is already starting to make this seemingly impossible task a reality, thanks to its powerful cognitive computing platform and a wide-reaching partnership strategy.

Watson’s vision is to enable better care by surfacing insights from the massive amounts of personal and academic health data that’s being generated every day, but IBM (IBM) needs partners within the medical, pharmaceutical, and hospital fields to make that relevant to on-the-ground practitioners. It’s institutions and companies like the Mayo Clinic, CVS Health (CVS), and Memorial Sloan Kettering Cancer Center that are adapting the innovative new technology to real-life applications.

UNDER ARMOUR AND IBM TO TRANSFORM PERSONAL HEALTH AND FITNESS, POWERED BY IBM WATSONAt CES, IBM Chairman and CEO Ginni Rometty, and Kevin Plank, Founder and CEO, Under Armour, announced a new “cognitive coaching” system, powered by Watson, that will transform personal health and fitness, on January 6, 2016 in Las Vegas, Nev.Alan Rosenberg — Feature Photo Service for IBM

“No one company is big enough to transform an industry on its own,” says Kathy McGroddy, vice president of IBM Watson Health. “It takes a village to change.”

One of IBM’s tentpole program within health care is the Watson for Oncology application developed in partnership with New York’s Memorial Sloan Kettering Cancer Center (MSK).

Some MSK oncologists have a highly specific expertise in certain cancers. By training Watson to think like they do, that knowledge expands from one specialist to any doctor who is querying Watson. That means that a patient can get the same top-tier care as if they traveled directly to the center’s offices in Manhattan. IBM’s Watson provides the framework to learn, connect, and store the data, while MSK is imparting its knowledge to train the computer.

The app, which can be run on an iPad or other tablet, is able to pack in all the expertise of MSK oncologists into one place so that any doctor anywhere is able to provide elite cancer care. This is significant for patients who live in areas without world-class medical services, like lower-income countries or rural America.

Mark Kris, MD, Chief of Thoracic Oncology, Memorial Sloan-Kettering Cancer Center, left, and Manoj Saxena, IBM General Manager, Watson Solutions work with the first Watson-based cognitive computing solution for oncology in New York City on February 11, 2013.Jon Simon — Feature Photo Service for IBM

“The handwriting was on the wall. This kind of a concept was not an ‘if’ question but a ‘when’ question,” said Mark Kris, a medical oncologist at MSK and the lead physician for the institution’s IBM Watson collaboration. “We knew we wanted to be part of the team that developed it.”

IBM and MSK have been closely linked for many years, making their partnership an natural evolution. Both IBM CEO Ginni Rometty and former IBM chairman Lou Gerstner sit on MSK’s board. However, it was MSK that first approached IBM about using Watson after watching the computer defeat two past grand-champions on the Jeopardy! TV quiz show, David Kerr, director of corporate strategy at IBM, wrote in an article for the Huffington Post in 2012.

“I credit leaders at Memorial Sloan-Kettering for envisioning a way to have a huge impact on cancer treatment worldwide,” wrote Kerr.

Revolutionizing Access

On the ground, the partnership means that any doctor anywhere can query Watson for Oncology on the iPad app, if the hospital has licensed the program.

For example, say a patient has a rare, genetically linked form of lung cancer. A generalized cancer doctor likely hasn’t had the time to keep up with the latest in specific lung cancer treatments. In the last year alone, there have been at least seven new lung cancer drugs approved by the FDA. That doctor may not be aware of how best to use those drugs or even if they apply to this patient.

At the University of Texas MD Anderson Cancer Center, Assistant Professor of Leukemia Dr. Courtney DiNardo uses IBM's Watson cognitive system while consulting with patient Rich Ware. At the University of Texas MD Anderson Cancer Center, Assistant Professor of Leukemia Dr. Courtney DiNardo uses IBM’s Watson cognitive system while consulting with patient Rich Ware.Feature Photo Service/IBM

Meanwhile, Watson for Oncology has been fed previous case studies on patients like this by lung cancer specialists at MSK, so it understands the case and will spit out a list of potential treatments for the doctor, with a percentage rank of certitude and risk next to each option. The doctor then reviews the list and makes the final treatment decision in consult with the patient.

It’s this level of specificity that is transformative for both doctors and patients, taking centralized expertise and fanning it out across areas as far as India and Thailand, where Watson for Oncology is already being used in select hospitals.

“If it doesn’t get to people who benefit, it’s just irrelevant,” said Kris. “This isn’t meant to be theoretical.”

IBM and MSK didn’t release details of the joint venture but there is a shared revenue agreement in place, Kris said, similar to how licensing agreements are struck between pharmaceutical companies for new drugs.

Beyond Cancer

While Watson Health collaborates with more than a dozen cancer institutes to find new ways to treat the disease using genomic data, it’s partnerships also expand well beyond cancer care. It is working with CVS Health to use predictive analytics to transform care management for patients with chronic diseases, an important way to extend ongoing medical care beyond the standard doctor’s office.

Other Watson Health partners include:

  • Medtronic (MDT): Predicting hypoglycemic episodes in diabetic patients nearly three hours before its onset, preventing devastating seizures.
  • Apple (AAPL): Storing and analyzing ResearchKit data.
  • Johnson & Johnson(JNJ): Analyzing scientific papers to find new connections for drug development.
  • Under Armour (UA): Powering a “Cognitive Coaching System” that provides athletes coaching around sleep, fitness, activity and nutrition.

Each of these programs are an equal partnership between IBM and the other company. The two work hand-in-hand to train Watson and establish a functional platform to query the super computer—and each has its own unique business model.

“What’s happening in health care is new things, new ideas, and new models. There’s an opportunity to really look at different ways to create and share value together,” says McGroddy, who declined to release details of those business arrangements.

On August 6, 2015 IBM announced that Watson will to gain the ability to "see" by bringing together Watson’s advanced image analytics and cognitive capabilities with data and images obtained from Merge Healthcare Incorporated’s medical imaging management platform.

On August 6, 2015 IBM announced that Watson will to gain the ability to “see” by bringing together Watson’s advanced image analytics and cognitive capabilities with data and images obtained from Merge Healthcare Incorporated’s medical imaging management platform.

The Watson Health Ecosystem

IBM also opens up its platform to allow other companies to tinker or develop their own programs. Watson makes its capabilities available as an API (application program interface), so companies of all sizes can use cognitive computing to meet their needs. Developers, entrepreneurs, data hobbyists, and students have built more than 7,000 applications through the Watson Ecosystem.

Welltok is one of those examples. The company, which IBM has invested in, works directly with self-insured companies and insurers to find ways to engage customers so they choose healthier behaviors. It’s CafeWell Concierge app uses Watson’s cognitive computing capabilities to provide customized insights to patients based on their personal profiles, helping them with things like finding a healthy restaurant nearby or answering detailed questions about their health.

Ultimately, these large and small partnerships are meant to give IBM’s Watson Health the breadth to help patients and doctors make better decisions. The goal is to eventually deliver more effective care, whether through quicker drug development, personalized health recommendations, or uncovering new genetically-linked treatments.

“These are huge benefits,” says Rob Merkel, vice president of IBM Watson’s health group. “This isn’t like a traditional business reengineering process where you’re cutting a few points of inefficiencies and saving money. You’re talking about fundamentally changing people’s lives.”

Transforming Big Blue

Watson is also intended to be an engine of transformation within IBM itself, a 104-year-old company that has been in the Fortune 500 for the past 21 years. The company has been honing its cognitive computing division across subject areas—from financial services to artificial intelligence to health care—and Watson’s role in Big Blue is becoming more vital.

“The vision for Watson Health is to serve as a catalyst to save and improve lives around the world and lower costs through cognitive computing,” says McGroddy. “Overall, from a business standpoint, we need to get this very big, very fast. It’s not just about transforming health care, it’s about the transformation of IBM, as well.”

Rometty has continually stressed the importance of cognitive computing at large, calling it “the dawn of a new era.” IBM launched the Watson Group in 2014, followed by the health care-dedicated division a year later.

Watch Rometty explain her vision for Watson in this 2014 interview:

Rometty has devoted more than $4 billion to build out Watson Health’s platform via acquisitions, indicating just how important this business is to the company. Most recently, Big Blue paid $2.6 billion for Truven Health Analytics, which will bring its total database to 300 million patients; the deal will also double IBM Watson’s size to nearly 5,000 employees.

However, in terms of Watson’s profit potential, IBM hasn’t said exactly how much it contributes to the company’s bottom line. Mike Rhodin, a senior vice president of the IBM Watson Group, told Fortune in September that Watson “is a big part of our growth in overall analytics which was $17 billion last year.”

There is no question that technology and big data have the potential to transform health care, in particular. One patient’s electronic health record holds an average of about 400 gigabytes worth of information. If you add in a patient’s genetic information, that ups a person’s total health data to 6 terabytes, says Merkel. Then, think about cross referencing an individual’s total data with existing medical literature or even thousands of other similar patients.

“It’s beyond human cognition to read that much information,” says Merkel. “We’re trying to provide insight across these two realms: knowledge and data. Ultimately, we want to impact people’s lives by providing new levels of insight.”