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Cisco CEO Bets on Health IT

Stocks in this article: CSCO IBM INTC GE MCK VZ

LAS VEGAS ( TheStreet) -- America's healthcare IT overhaul will involve much more than just electronic medical records. This is the bold prediction from Cisco CEO John Chambers, who forecasts a major revolution in the way that Americans access medical care.

President Obama's ambitious plans for revamping U.S. health care relies heavily on technology, and Washington has earmarked billions of dollars to drag the sector's IT systems into the 21st century. The American Recovery and Reinvestment Act includes $19.5 billion for health IT, and Obama has vowed to implement electronic medical records by 2014.

With companies like IBM (IBM), Intel (INTC), GE (GE ) and McKesson (MCK) all vying for a slice of the e-health pie, Cisco chief Chambers is predicting that video will play a major role in the sector in coming years.

"Imagine if you could access the best doctors in the world from your home or could have the ability to interface with your aging parents and see how they are doing," he told TheStreet at last week's Consumer Electronics Show ( CES) in Las Vegas. "What the administration is trying to do with its spending is to kick start things -- the real growth will come through both the private and the public sector over the next five years."

Cisco may not be the first name that springs to mind in connection with healthcare, but the tech bellwether's "Connected Health" solutions aim to improve how information is shared across medical networks. For example, access to medical experts and information could be expeditied via sending C.T. scans and X-rays electronically between doctors or using telepresence, a form of high-end videoconferencing, to link patients with doctors. As a demo, during Chambers' CES keynote, Cisco marketing vice president Ken Wirt used the technology to discuss his diabetes with his doctor.

Telepresence, like video conferencing, might still very much be an enterprise technology, but Cisco is trying to extend its use to consumers. The company discussed plans to offer a home-based telepresence system, which customers will access via their existing HDTV and broadband system (instead of having to buy and deploy a pricey, enterprise-like video system).

Working with Verizon (VZ), Cisco will run its first home telepresence trials in the U.S. this spring. The San Jose, Calif., firm will extend these trials to France later in 2010, working with France Telecom.

Video has become something of a Cisco mantra in the last couple of years, as evidenced by the networking giant's $590 million acquisition of Flip camera maker Pure Digital. Late last year, Cisco also spent $3.4 billion to acquire Norwegian videoconferencing specialist Tandberg.

Cisco's move into video is a shrewd move. With its networking products already widely deployed in data centers around the world, the Silicon Valley heavyweight is keen to open up new revenue streams. An explosion in video traffic drives demand for switches and routers, so Cisco might also see a boost in its traditional business.

However, the U.S. healthcare revolution is still in its infancy, and there could be major technological and political barriers ahead. Even in the U.K., which features a centralized, government-run National Health Service (NHS), the push towards electronic medical records has been a protracted and highly complicated process.

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