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The Service Provider Cure: Healing an Ailing Healthcare System

July 2, 2012 - 2 Comments

By Tine Christensen, Director of US Service Provider Practice, Cisco Internet Business Solutions Group (IBSG)

America’s healthcare system has been laid low with a scourge of acute symptoms. Spiraling costs, an epidemic of chronic diseases, and a spike in the senior demographic are all driving a mounting crisis. Throw in a gridlocked U.S. Congress and an unresolved regulatory climate, and a “miracle” cure seems a remote dream.

Lately, however, a healing light has been shining from a surprising source: service providers.

  • For patients, SPs can be a source of empowerment and knowledge, making a labyrinthine system easier to navigate while facilitating essential preventive and follow-up care.
  • For insurers and hospital systems, SPs offer a way to streamline their interactions with patients and, crucially, to control costs while responding to emerging proactive-care and patient-monitoring incentives.
  •  For SPs themselves, there is an opportunity to tap into the massive market for healthcare in America, with a staggering $2.64 trillion spent in 2011 alone.

Technology in general has been touted as a key solution to America’s healthcare woes. Hundreds of apps and devices are being developed to offer wellness advice, deliver medication alerts, and monitor vital signs, while detailed home testing is being shared through sophisticated networks.

Many of these developments target a core area of concern: chronically ill patients. Five percent of the U.S. population accounts for 50 percent of healthcare spending, and the top six chronic ailments—including congestive heart failure, diabetes, hypertension, and cancer—cost more than $655 billion annually. Yet studies estimate that savings of up to 30 percent, or nearly $200 billion, are attainable if these patients are better monitored and supported.

The problem is that all of these technical advances are fragmented and often delivered by smaller (albeit innovative) players and start-ups, which is where SPs come in. Cisco’s Internet Business Solutions Group (IBSG), working with key U.S. service providers, has explored how SPs can create integrated, easy-to-access solutions to a wide range of patient and healthcare provider needs, while giving SPs an opportunity to capture significant revenue.

Service providers offer a unique set of advantages:

  1. SPs already “own” the home. They connect more than 110 million U.S. households, and nearly 80 percent of those are broadband-enabled. Surveys consistently reveal that customers have a trusted relationship with their SPs.
  2. SPs are in a prime position to partner with and integrate smaller players in the medical device field. A home pill station can do a fine job of monitoring a patient’s medication, but that patient might need five other devices. SPs have the infrastructure to connect them all and secure the transmission.
  3. Many SPs already offer a suite of services relevant to healthcare, including collaboration tools and the ability to push educational videos, provide data storage and remote device access, and facilitate remote monitoring.
  4. SPs have deep experience creating comprehensive managed services and partnerships within broad ecosystems. For healthcare, they could be the obvious candidate to link practitioners, insurers, device manufacturers, and app developers with the patients who need these services the most.

In identifying this wide range of opportunities for SPs, Cisco IBSG recommends a phased entry into the healthcare market, given current uncertainties as to how this field will evolve. Short-term offerings could include a suite of collaborative services (e.g., patient monitoring, elder care assistance, and wellness programs). Initially, these would likely be patient-paid services. This phase would provide an opportunity for SPs to get such services tested, marketed, and proven as a cost-cutting and revenue-generating solution.

Longer term, SPs can transition to a more comprehensive model, selling services for critically ill patients to insurers, hospital systems, and providers.

Throughout the healthcare ecosystem, experts are waking up to the value of preventive and follow-up care in lessening the burden on the entire system. With this trend likely to continue, SPs can position themselves today for a much-expanded future role in treating the afflictions of the healthcare system.

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  1. One point to add is that by transition to IPv6 service providers will be better equipped to offer new services such as remote medical monitoring (Internet of Things). IPv6 will simplify these types of service deployments.


  2. If phased entry into America’s healthcare market could contribute towards controlling spiralling healthcare costs and ever growing IT infrastructure demand than I guess Cisco will not only provide benefits to the general public but also quickly become the market leader in this industry. Anyways this idea is great and it will good to see Cisco offering patient doctor interactions.