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Home business strategy

Can IBM Succeed Where Obama Failed?

by Dana Blankenhorn
September 12, 2011
in business strategy, Health, intellectual property, medical, politics, Science, The Age of Obama
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Ibm-watson There was a lot of chuckling over WellPoint's  announcement that it will be partnering with IBM to use that company's Watson supercomputer for medical diagnoses.

The idea is that Watson will combine patient medical histories, tests, medical literature and (perhaps most important) clinical best practices to decide quickly what doctors should be doing.

It's not the only such deal in the market. Other tech companies have similar initiatives. AT&T calls its program ForHealth. 

The idea in all these cases is the same, to take some measure of decision making out of the hands of doctors, and give insurers a rationale for denying expensive treatments when less costly ones are available. 

Another term for this is comparative effectiveness. You look at what a lot of people have done in similar situations, what happened, then do what works best.


Obamacare Comparative effectiveness was one of the most controversial aspects of the President's health care battle, with Medicare essentially stripped of mandating that such practices be followed because the result was called rationing.

But the fact is that no system, public or private, can accept an unlimited draw of funds from a limited pool of resources. Ever since the market rejected “managed care,” insurers have been fighting a losing battle to re-assert some control over doctors.

With IBM and Watson, they now believe they have found it.

The insurers are carefully positioning Watson as an aid to doctors, not as cost control.  Or it's being called medical advice. (And what will happen to doctors who go against the "advice" consistently but can't show better results?)

There are some places where control is exercised. Intermountain Health, the Mayo Clinic and Kaiser Health use best practices because they have control over both the money coming in and the money going out of their systems. This provides an incentive for centralized control that doesn't exist in other areas of practice.

And that's the problem with U.S. health care, in a nutshell. Doctors who own imaging clinics or hospitals have no incentive to reduce costs. Specialists who can rely on insurers to pay for whatever drugs they prescribe will do what they want.

But doctors are having trouble getting the arms around the latest threat. Genomeweb is concerned Watson may give different answers depending on who is asking a question, or that it could misdiagnose a patient. 

Only a few bloggers are sounding the alarm that doctors might be replaced by Watson  but as the savings become obvious, expect that chorus to swell.

When it does, just remember this:

No system can accept an unlimited draw of funds from a limited pool of resources. Someone has to have the power to say no.

 

 

 

Tags: comparative effectivenessIBMIBM WatsonObamaCareWatsonWatson supercomputerWellPoint
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Dana Blankenhorn

Dana Blankenhorn

Dana Blankenhorn began his career as a financial journalist in 1978, began covering technology in 1982, and the Internet in 1985. He started one of the first Internet daily newsletters, the Interactive Age Daily, in 1994. He recently retired from InvestorPlace and lives in Atlanta, GA, preparing for his next great adventure. He's a graduate of Rice University (1977) and Northwestern's Medill School of Journalism (MSJ 1978). He's a native of Massapequa, NY.

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