Finance

Cable Writes a Prescription for Growth

MSOs Amp Up Pursuit Of Healthcare Market 3/03/2014 12:00 AM Eastern

Aiming to inject a dose of adrenalin into an already vibrant part of the industry’s commercial services business, cable was out in force at last week’s massive HIMSS Annual Conference & Exhibition in Orlando, Fla., to engage with the healthcare industry and to get a fix on its future IT and connectivity needs.

In partnership with CTAM, cable operators, including Cox Communications, Charter Communications, Time Warner Cable and Comcast, were on hand at the event, which drew more than 1,200 exhibitors and 36,000 attendees.

CTAM (the Cable & Telecommunications Association for Marketing) has also been engaged directly with the analytics unit of the Healthcare Information and Management Systems Society, the group that put on the event. Late last year, the two groups collaborated on a study with C-level and director-level decision makers at hospitals and healthcare facilities that identified the top strategic priorities for healthcare IT departments and how well equipped they were to handle them.

Helping the healthcare industry bridge these IT gaps has become an area of focus for MSOs’s business services divisions.

MAKING INROADS

“The cable industry as a whole is really focused on the healthcare vertical, and we’re making some inroads across the board,” Alex Sewell, executive director of emerging markets at Comcast Business, said.

She said Comcast attended the show to get a direct sense of the IT trends ahead for the healthcare industry, which will be looking for service providers to play a critical role in the development of telemedicine services and other key initiatives.

After starting with smaller doctor’s offices and clinics, cable operators — many now armed with fiber-fed multi-gigabit Metro Ethernet links and new cloudbased services that can serve the needs of hospitals and other larger facilities — have identified healthcare as a key vertical.

Cable doesn’t break out revenue from hospitals and physician’s offices, but the segment is helping to stoke an already-healthy commercial services segment.

Overall, U.S. cable providers generated about $8.5 billion in commercial-services revenue last year, up from about $7 billion in 2012, and are on pace to reach $10 billion in 2014, according to Heavy Reading’s latest forecast.

Healthcare is now the top business services vertical at Time Warner Cable, Satya Parimi, group vice president, product management, at TWC, said.

Providing services to healthcare clients is a “significant” contributor to the $1.6 billion in annual revenue pulled in by Cox’s commercial services division, Ken Kraft, vice president of marketing for Cox Business, said.

The healthcare industry “represents some of our largest customers,” Kraft said. Only the government vertical is larger for Cox Business, and not by much.

Kraft said healthcare aligns well with cable’s footprint and its ability to deliver services to smaller, remote locations that need to be networked together. Although hospitals are now among cable’s commercial-services targets, physician’s offices and clinics remain the industry’s “sweet spot” in that services category, he said.

PRODUCT EVOLUTION

Cable companies have been fine-tuning and tailoring how their services can better address the needs of the healthcare industry.

After starting off by selling high-speed Internet and video services to doctor’s offices, operators such as TWC were in good position five years ago, when healthcare providers moved forward with their own digitization projects.

That has since evolved into cloud-based storage and security, services that TWC is supporting through Navisite, the cloud-services unit it acquired in 2011.

Cox Business has teed up a similar suite of cloudbased transport and hosting services through its partnership with ViaWest, a Denver-based data center services provider that has co-location facilities in markets such as Las Vegas and Phoenix.

The ability to offer a wider, smarter suite of services to the healthcare industry has enabled cable to break into new accounts and to support the special needs of new products like telemedicine, “virtual visits” that rely on video conferencing and remote patient monitoring at a biometric level.

TWC has been piloting a virtual visit project in Cleveland and several surrounding counties.

“It really changes the conversation,” Parimi said. “We’re no longer just the pipe guys.”

Some new healthcare-focused products are about delivering TV. TWC and Cox, for example, are developing high-definition services, including specialized lineups tailored for hospitals that are weaning themselves off of old, standard-definition TV systems.

In TWC’s case, the MSO has been pushing ahead on a project that uses an out-of-the way “set-back” box made by ADB that can be mounted on the back of an HDTV set.

TAKEAWAY

Cable’s strong showing at a major healthcare IT industry conference last week illustrates the growing emphasis MSO business-services divisions are placing on reaching this key vertical market.

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