Earlier today, WellPoint Inc. (WLP) announced an agreement with computer giantInternational Business Machines Corp. (IBM) to use IBM’s Watson technology, in order to provide faster and more efficient healthcare to its clients.
Watson is a computer system built by IBM, which can process vast amounts of data in seconds to arrive at possible conclusions and aid in decision-making. It matches a human’s ability to analyze a question and arrive at a fast and accurate answer. The precision and efficiency of the computing system, named after IBM founder Thomas J. Watson, can be gauged from the fact that it even managed to beat two of the best Jeopardy players in the game.
WellPoint aims to develop Watson-based healthcare solutions for assisting physicians in diagnosing patients. The company aims to test the new system in clinical pilots with select physician groups in early 2012. Watson will be used to go through massive amounts of data, including patients’ medical history, medical literature, latest research findings and recommended treatment protocols to suggest the best and most effective treatment for patients.
The planned application of Watson depends on the system’s ability to analyze about 1.0 million books or 200 million pages of data and arrive at precise answers to questions in only 3 seconds. This skill can be particularly helpful in the healthcare sector where new medical discoveries are made everyday and it is difficult for a physician to keep track of all the developments and apply them while treating patients.
Watson will allow a physician to match programmed medical data with a patient’s medical history and test results to arrive at the best course of treatment for complex diseases such as cancer, heart diseases and diabetes.
We believe that the use of Watson for medical treatment has great potential, and if correctly applied, it can not only improve the speed of diagnosing complex diseases, but also help in improving diagnostic accuracy. As a result, this deal is expected to be profitable for WellPoint in future.
Currently, WellPoint carries a Zacks #3 Rank, implying a short-term Hold rating.
On Friday, the shares of the company closed at $61.81, down 2.17%, on the New York Stock Exchange.
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