technology

Cox, others eye revenue from health care sector

Posted 2/13/12

NEW YORK - Jack Sappenfield was driving in rural Oklahoma on Father’s Day 2009 when he lost control of the left side of his body. Alarmed and dizzy, he quickly turned back to a small local hospital.

“The emergency room staff was actually really excited when I came in, and I didn’t know what to make of it,” said Sappenfield, 73. Here’s why: The clinic had just installed technology that allows specialists to remotely examine patients via videoconference, and Sappenfield became the first stroke victim to be treated using the system, running on Cox Communications Inc.’s cable network.

He was examined remotely by a doctor in Oklahoma City, whose instructions helped him recover.

“It was an amazing turnaround,” said Sappenfield.

The technology that saved Sappenfield is becoming more mainstream and providing fresh vitality to Cox and other U.S. cable carriers, which are seeking new revenue sources as growth in TV customers slows. The companies are ramping up sales staffs to sell broadband access and related services to regional hospitals and doctors’ offices, trying to squeeze more money out of a network they used to use mainly for carrying TV signals.

To do that, they need to loosen the grip phone companies such as AT&T Inc. and Verizon Communications Inc. have over health-care customers. That won’t be easy, as the rivals devote more resources to divisions dedicated to the sector, such as AT&T ForHealth and Verizon Connected Healthcare Solutions.

Cutting the Cord

Basic cable-TV subscribers have fallen every year since 2005, from 66 million to 59.3 million in 2010, according to data compiled by Bloomberg. Video sales fell 1.1 percent in 2011 from a year earlier at Time Warner Cable Inc., the second-largest U.S. cable provider. Comcast Corp., the largest cable carrier, reports earnings Feb. 15.

While cable companies still rely on residential services for the majority of their revenue, the biggest growth in the industry is from connecting regional businesses with broadband and other services, particularly hospitals and schools.

Time Warner Cable’s sales to companies and organizations rose 37 percent to $409 million in the fourth quarter, leading Chief Executive Officer Glenn Britt to call business services “our biggest success story” on a conference call last month. The company projects 25 percent to 30 percent growth in 2012.

Hospitals are prime candidates to upgrade their Internet networks from slower connections to cable broadband as the government mandates the digitization of medical records, said Phil Meeks, Cox’s senior vice president of business services.

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