Dr. Watson is accepting new patients.

The Watson supercomputer is graduating from its medical residency and is being offered commercially to doctors and health insurance companies, IBM (NYSE: IBM) says. 

To start, the world’s largest computer-services provider has now developed Watson-based products for WellPoint Inc.’s cancer doctors.

IBM worked with WellPoint and New York’s Memorial Sloan- Kettering Cancer Center to adapt Watson, the computer that beat humans in “Jeopardy!” in 2011, into three commercial products. The services answer medical questions from doctors, researchers, medical centers and insurance carriers, IBM said Friday at an event in New York.

Watson-based applications can now help diagnose and treat lung cancer and another can help manage health insurance decisions and claims.

The products are part of IBM’s data analysis services for businesses, an offering the company expects to generate $16 billion in revenue by 2016. By the end of 2013, 1,600 providers and 50 percent of nurses in the system of Indianapolis-based WellPoint, the second-largest U.S. health insurer, will be using a Watson product for recommending whether medical procedures should be approved, IBM said.

In 2012, Watson became 240 percent faster and 75 percent smaller so it can run on a single server, the company said. Armonk, New York-based IBM now can install a Watson machine on-site for a company or remotely via cloud computing to a personal computer, tablet or smartphone.

In the applications, doctors or insurance company workers will access Watson through a tablet or computer. Watson will quickly compare a patient’s medical records to what it has learned and make several recommendations in decreasing order of confidence.

In the cancer program, the computer will be considering what treatment is most likely to succeed. In the insurance program, it will consider what treatment should be authorized for payment.

Watson (actually named for IBM founder and not the Sherlock Holmes’ friend, Dr. Watson) has been trained in medicine through pilot programs at Indianapolis-based WellPoint and at Sloan-Kettering in New York.

Manoj Saxena, an IBM general manager, said the supercomputer has ingested 1,500 lung cancer cases from Sloan-Kettering records, plus 2 million pages of text from journals, textbooks and treatment guidelines.

It also learned “like a medical student,” by being corrected when it was questioned by doctors and came up with wrong answers, Saxena said in an interview.

“Watson is not making the decisions” on treatment or authorization, Saxena said. “It is essentially reducing the effort for doctors and nurses by going through thousands of pages of information for each case.”

The lung cancer program is being adopted by two medical groups, the Maine Center for Cancer Medicine and WestMed in New York’s Westchester County. Saxena said it should be running at both groups by next month.

WellPoint itself is already using the insurance application in Indiana, Kentucky, Ohio and Wisconsin. It will be selling both applications — at prices still to be negotiated — and will compensate IBM under a contract between the two companies, an IBM spokeswoman said.

WellPoint said using Watson should not increase insurance premiums because of savings from waste and errors

IBM employs some 10,000 people across North Carolina. 

[IBM ARCHIVE: Check out more than a decade of IBM stories as reported in WRAL Tech Wire.]

(The AP and Bloomberg contributed to this report.)