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MARCH / APRIL 2007 Volume 10 Issue 2

Proposed U.S. Health Information Network Addresses Consumers' Expectations & Presents Market Opportunities For Competitors

In the recent past, the United States has pioneered major advances in computing, health care, manufacturing, and telecommunication. Some industry participants have recently expressed doubt about whether the United States will maintain its role as a world leader in these fields. A major concern is access to the best available workforce, which is currently hampered by the limited number of visas for foreign-born college graduates who would like to remain in the United States.

News

Despite the workforce barrier, companies that participate in the health care, information technology, and telecommunications segments of the S&P 500 performed well in the Fall quarter of 2006. In general, health care stocks can post gains even if the rest of the U.S. economy falters.

The prospects for health care information technology and telecommunications products and services improved significantly in March 2007, when the Department of Health and Human Services (HHS) announced preliminary interest in building a national health information network that would initially connect providers with government systems and eventually include consumers, as well. The ambitious goal is to have health care organizations and providers adopt and use interoperable electronic health records by 2012. States will participate by creating regional health information organizations and promote establishment of more transparent pricing structures by health care providers.[1]

One study conducted by the Markle Foundation and another sponsored by Cisco Systems indicate strong consumer interest in Internet-based access to health care information and tools. E-mail and lab results are two commonly cited examples of services that few physicians provide to their patients.

The Market

In advance of the HHS announcement, several companies have committed significant financial investments in research and development. One example is Microsoft , which expended $7.0 billion for its connected health framework initiative. Others have taken advantage of funding available through the U.S. Department of Agriculture's Rural Development Telecommunications program which has distributed more than $76.0 billion since 2000 for infrastructure development. Telco Systems' (Foxboro MA) EdgeGate media gateways, for example, are used in the largest active Ethernet-based Fiber-To-The-Business deployment in the United States (Grant County Public Utility District, Washington).[2]

A 2006 market report published by Insight Research (Boonton NJ) projected a 5.4% growth rate for the U.S. health care telecommunications service market from 2006 through 2011. Total revenues were expected to increase from $6.3 billion to $8.1 billion.[3] Two factors were cited in support of the forecast: 1) High costs associated with the current health care system and 2) Cost effectiveness of using broadband network services for delivering care to patients where they live.

[1] "Health Care In Search Of Connections", Internet News, March 16th, 2007 (www.internetnews.com)

[2] "Telco Systems Gets Nod From USDA'as Rural Utilities Service", Yahoo! Finance, March 5th, 2007

[3] "Health Care Telecommunications Expanding; Wireless Shows Fastest Growth", Imaging Economics, August 18th, 2006