Health IT

Report: Healthcare spends $9 billion a year (and counting) on staying connected

The growth of healthcare spending on telecommunications services will outpace the growth of the $2.8 trillion healthcare industry as a whole over the next five years, propelling the digital health movement, a new report predicts.

Telecommunications services will see spending growth of nearly 10 percent annually over the next five years, accounting for $14.4 billion by 2017, according to Insight Research Corporation’s report (PDF) Telecom, IT and Healthcare: Wireless Networks, Digital Healthcare and the Transformation of U.S. Healthcare.

But for the important role that connectivity plays in the future of healthcare, $14.4 billion is a pretty small slice of the forecast $3.9 trillion healthcare pie. Increased spending on fiber optics, wireless access and digital transmission will enable further advances and adoption of telemedicine, home health monitoring, electronic health records and information exchanges, the report says.


That’s good news for companies like AT&T, which in 2010 launched AT&T ForHealth specifically for delivering services to the healthcare industry; Verizon, which offers a suite of digital healthcare solutions; and Sprint, which has partnered with several health IT companies.

The report pegs advances in clinical treatment that require delivery systems capable of synthesizing data and delivering immediate clinical feedback in addition to an aging population as the biggest drivers of this growth. Wireless broadband adoption for those over age 65, which have the highest need for home medical care, will reach a critical mass in the next decade that will enable widespread use of mobile healthcare, the report says.

Fragmentation of the industry has made healthcare one of the slowest vertical markets to adopt wide-area networking to this point. “The combination of increased demand for wireless and broadband access, massive data storage demands, and the conversion to electronic health records and procedures is straining existing healthcare networks,” said Insight’s research director Fran Caulfield in a statement.

Some other predictions from the report:

  • Electronic monitoring will give way to an exception management model, where electronic patient monitoring becomes standard and only exceptional conditions will trigger intervention from a provider.
  • Service providers will become increasingly important to helping care providers manage their data.
  • Consumers will pay even higher disposable income toward healthcare services — more than twice as much per capita as the next closest country.
  • Collaboration between care teams, patients and provider organizations will flourish.
  • An aging population will drive demand for treatment in remote clinics and at home.

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