Picture of Health: Networking’s Role in Medical Vertical

The health care industry is in the midst of change. Slowly but steadily, it is transitioning from centuries of paper-reliant systems to electronic methods of records keeping and sharing.

Medical and insurance documents and images travel with increasing frequency over broadband networks, interconnecting doctors’ offices, hospitals and clinics for faster and more secure transport than could be provided via snail mail, runner or telephone. High-speed access also allows for connectivity from such medical sites to insurance companies for expedited claims processing. The move to digital records keeping and the availability of broadband networks also can help ensure medical and insurance records are available when needed, and are backed up to prevent data loss so the industry doesn’t have an experience similar to the one it saw during Hurricane Katrina, when tens of thousands of files were washed away.

All this is contributing to growing communications spending by the health care industry. According to Insight Research Corp., in the United States the health care industry will spend $55 billion on telecommunications services over the next five years. Meanwhile, research firm In-Stat forecasts $16 billion in telecom-related spending from this vertical this year alone, and that number is expected to grow to more than $18 billion by 2012, said Jeff Wilson, senior analyst for In-Stat’s U.S. Business Segmentation unit.

“This represents a compound annual growth rate of 4 percent — and faster growth in telecom spending than any other industry over this period,” Wilson said.

Helping drive that growth was recent consolidation within telecom, spearheaded by AT&T Inc. (T), Sprint Nextel Corp. (S) and Verizon Communications Inc. (VZ), which led to the combination of wireline and wireless networks, and integrated IT platforms that can support health care applications, according to Insight Research in its May 2008 report. Another key driver of that spending is the fact that the health care industry, which was one of the vertical markets slowest to adopt WANs, is widely distributed from a geographical standpoint.

“Travel time has a value, waiting in an office has a value, waiting weeks to get to the right health care provider has a value,” said Insight Research’s Robert Rosenberg. “One of the things telecommunications does is squeeze the distance out of this. It’s a question of having in place the systems that cost a lot to build and [having] those systems used pretty much continuously at full volume over a long period of time.”

But while there are hundreds of thousands of physicians’ plazas and medical diagnostic facilities planted throughout the country that might benefit from broadband connectivity, Imran Khan, an analyst in Frost & Sullivan’s U.S. information and communication technology practice, said that to address those in the health care space, customization may be required.

“You can’t operate a plain vanilla solution and expect it to work across all these different sub-segments within the health care vertical,” Khan said.

One service provider addressing the specific requirements of organizations in the health care vertical is Cox Communications Inc. The company has developed MedNet, a private, HIPAA-compliant IP network intended to link hundreds of physicians’ offices, clinics and hospitals in the Hampton Roads, Va., region. MedNet offers Ethernet connections from 10mbps to 1gbps, depending on how much bandwidth users need to transfer both basic patient records and more bandwidth-intensive documents such as mammograms, X-rays, MRIs and CT scans.

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