Health care industry a challenge, opportunity for telecom

(Part 1 in a series on telemedicine)

The health care industry has long been a major consumer of bandwidth and a vertical market heavily targeted by telecom with specialized solutions. But trends in demographics, technology and the health care industry itself are making the telehealth and telemedicine markets of increasing interest to telecom service providers.

Two specific trends are taking hold in a major way: The health care industry’s need to use IT and telecom to operate more efficiently, and an aging population’s need and desire to use remote health care monitoring to promote better care for the chronically ill in their own homes. While often moving separately, those two trends converge to create a booming demand for health care networking that ties together all the piece parts of the sprawling U.S. health care system: hospitals and clinics, doctors and other health care professionals, insurance payers including the federal government, and patients as well as their caregivers.

Against this backdrop, new business models are emerging. Some of these include the telecom service provider as a valued partner and others reduce telecom to a transport service, albeit a bigger, more mobile and more secure pipe. Service providers including AT&T (NYSE:T), Cox Communications, Qwest Communications (NYSE:Q) and Verizon (NYSE:VZ) all have major initiatives aimed at delivering value-added services to the health care segment. Some of these are aimed at the higher end of the value chain, such as Qwest’s involvement in the Colorado Telehealth Network, Cox’s work with Sentara Healthcare on its MedNet application to link hospitals and doctors in southeastern Virginia and northern North Carolina and AT&T’s personal health record program.

“We consider the health care industry to be a very important part of our customer base,” said Mike Braham, regional vice president, Cox. “Today, the health care industry represents 10% of our 250,000 business customers. “But we also see tremendous opportunity as we look forward to future requirements of the boomer nation. We expect to use the full complement of voice, data and video services in the home.”

In addition, there are efforts underway to create a standard approach to delivering in-home remote monitoring that ties in wireless networks and new wireless devices, enabling more continuous monitoring that is currently available and freeing the patient from older in-home technology. There is even a push to make mobile phones the gateway devices for so-called “M-health.”

“There is the opportunity for sensors on or around the body to be connected through low power Bluetooth or other technologies to a handset and use handset to send the sensor data to a central location,” said Sam Lucero, practice director, M2M Connectivity, at ABI Research. “This segment is emergent but we see cellular carriers getting more interested.”

The macro trends driving that interest are considerable. The population of developed countries, including the U.S., is aging through a combination of the Baby Boomer population surge and the extended life expectancies. And this is not a near-term only phenomenon – by the year 2030, the U.S. Census Bureau expects the number of people over age 65 to double to 72.55 million people from 35.7 million in 1995. With that aging population comes more chronic illness such as heart disease and Type 2 diabetes.

At the same time, the U.S. is facing a potential shortage of doctors, expected to reach 159,000 primary care physicians by the year 2025, according to The Association of American Medical Colleges. And nowhere is that shortage more acutely felt than in rural areas, where the lack of primary care physicians and specialists has reached crisis proportions, according to the National Association of Community Health Centers.