CVS is a huge brand with 7,600 drug retailers whose specialty seemed to have been disorganized stores that were out of stock on whatever it was I needed. IBM is something quite different; an old-line professional company focused on enterprises willing to pay a lot for high-end services. Their partnership seems unlikely — a combination for improved medical service.
It’s clear both companies needed to do something. Drug stores need action about markets to compete with companies such as Amazon and any other online services to deprive existing retailers of profits. One direction stores have been adding is medical services, from flu shots to basic treatment. IBM meanwhile, has faced an army of increased competition in services and shrinking profits.
But IBM has an incentive of its own to build a better service. It has gone through a movement of traditional IBM design to build ways to develop large, open-system databases that can be searched rapidly for answers to questions. The company cleverly showed the public the phenomenon on national television by using a machine called Watson. It starred in the 2011 TV quiz show Jeopardy!, where it defeated human champions Ken Jennings and Brad Rutter.
For IBM, it only looked like a stunt. But the real goal was to make Watson a powerful search tool for discovery of information in the world. It has taken a while before the business really took off, but health care has turned out to be a leading choice. Improved information is badly needed in medicine, where there is a lot of information often poorly organized, but there is research effort and a lot of money. It’s no accident that Watson’s first commercial effort was a search of lung cancer data for Memorial Sloan-Kettering. The IBM-CVS move, which oddly has not yet been given a name, has launched a big new approach.
Although the financial arrangement between IBM and CVS has not been disclosed, it is clear how both sides can be winners. CVS gets access to a wealth of information from Watson that will improve its ability to diagnose and treat customers. Ultimately, this capability could help CVS to eventually move its business from cosmetics and pharmacy goods to the quick exams and shots it handles today, to true medical centers.
IBM’s gain is different. Its goal is to use Watson to collect, sort, and classify the tons of information it can take in through the CVS program. The advantage of Watson is the more data it gathers, the more knowledge it has about the total situation.
Kyu Rhee, IBM’s chief medical officer, is counting on major progress:
Today, we’re taking another step forward with a sweeping partnership with CVS Health aimed at transforming the way individuals and their caregivers engage with essential members of that patient-centered, community-based primary care team—CVS pharmacists and healthcare providers at your local CVS MinuteClinic. These team members are committed to not only address your acute healthcare needs including a sore throat or a sinus infection, but also manage key chronic conditions including heart disease, diabetes, asthma, arthritis, depression, and cancer.
IBM is planning to use information it collects to combine medical and pharmacy records, wearables, fitness devices, home monitoring devices, and mobile apps.
Another goal is to use the CVS-based services to help carry out doctors’ instructions without needing more appointments. CVS and Watson together can help keep track of physicians’ plans.
IBM is also bringing a growing collection of newly acquired services to the effort. Phytel has built its own integrated population health management software. Explorys is a platform for sampling big data information across the platform. And Cúram Software creates social program management organizations. The goal, according to IBM Watson executive Mike Rhodin is, “extraordinary capabilities in patient engagement and population health, enabling us to deliver a powerful solution that supports individuals wherever they are, whenever they need it.”
Of course, the effort is not without risks. A particularly big one is protecting the massive medical information that IBM and CVS will be collecting and transferring between each other. CVS already has a less than good record of protecting customer records. It has lost a number of credit card records, though there has not been too much medical information stolen. We cannot even tell what IBM is collecting with serviced because today, if data is taken, it’s going to be blamed on other companies.
It’s also critical that patient information gathered by CVS and IBM be passed on to third parties, such as pharmacy companies to address discovered customer needs. Keeping anything involving the relationship between CVS and IBM private is vital and any action must be passed on to the patient, not a third company.
The problem is the information being exchanged between IBM and CVS is a lot more of a risk than mere credit card numbers. Protecting actual medical information must not only provide the privacy that patients expect but the extensive requirements of the HIPAA law and other government and insurance company terms. And, of course, we do not yet know how much it will cost CVS, IBM, or customers.
All of which probably explains why it will take a while for the service to become broadly available. But the agreement is likely to produce a major new medical service. That could be big deal.