It's no secret that telecom players see a major opportunity in providing telecom and IT services to the health-care industry, and with good reason. Industry analysts at IDC say the U.S. market for health-care IT solution spending was a $33.9 billion market in 2010 and is expected to grow 24 percent over the next four years.

AT&T Inc. (NYSE: T) has been playing in the health-care market for decades, but has now dramatically overhauled its approach with the creation of what it called a new practice area in November. AT&T said it intends to develop health-care-specific services and solutions, whether they are wireless, broadband or cloud-based. This was the first public acknowledgment of the extent to which AT&T was already heavily involved in solving health-care problems with technology.

AT&T's public embrace of the health-care vertical comes as the federal government is funding more efforts to modernize the health-care system and as competitors are piping up about their efforts in this field. Hospitals, doctors' offices, medical facilities and insurance companies are under pressure to reduce costs and improve care, spurred in part by new federal rules and incentives governing health-care IT. Verizon has been vocal about its own approach to health-care IT and now that AT&T has a company-wide strategy, it has become more talkative as well.

To the cloud!
Among the major initiatives of AT&T ForHealth will be the AT&T Healthcare Community Online, a health information exchange (HIE), which is a cloud-based service intended to enable easy but secure exchange of health information. HIEs are core products for the medical industry and a key part of the federal mandate to update health-care IT. In fact, some $540 million was granted just last year to aid them in making HIEs of various types interoperable to improve communication within and across state lines.

Cloudy HIEs also represent a quantifiable way of reducing health-care cost: By making patient treatment and testing data securely but easily accessible, HIEs can eliminate the costly duplication of tests and improve clinical workflow.

AT&T is rolling out its HIE after having first implemented the program with West Tennessee Healthcare, a public, not-for-profit health-care system covering 17 counties in Tennessee, according to AT&T's assistant VP of health care Brenda Crawford.

This is not to say AT&T just began pursuing the health-care vertical in a major way in November. In recent months the carrier has:

Next page: A Healthy History

A healthy history
AT&T has been at the forefront of not just IT solutions but basic research. Some of that is attributable to Bell Labs ' rich history in medical research, owed in part to the fact that AT&T's founder, Alexander Graham Bell, had strong personal interest in working with the deaf. That research has set AT&T apart from other telecom players in the health-care solutions arena.

"AT&T has definitely done more work with vendors in development of health-care software and hardware," says Amy Larson DiCarlo, principal analyst with Current Analysis. "They have been very innovative in their approaches. But they've also been more circumspect."

Rather than just connecting buildings with Internet access, a good deal of AT&T's focus is also on mobility solutions, including many machine-to-machine applications. These solutions can use sensors and wireless devices, including so-called medical jewelry, to monitor vital signs and other diagnostic data from chronically ill or elderly patients and transfer that data automatically to a medical professional.

True, medical jewelry doesn't sound like a phone company core competency. But these mobile devices, when networked and monitored properly, allow for better home health care. And better care can even reduce hospital re-admissions and diagnose problems more rapidly, especially conditions that don't conveniently appear when a patient is in the doctor's office.

"We have been executing on mobile health and health information exchange strategy, in fact we have done many things around telehealth over the years, but they were individual products or point solutions," says AT&T's Crawford. "What we are doing is pulling them all together, aligning them as one organization, and hence harnessing the broader power of AT&T and maximizing the impact."

Healthy competition
Like all telecom service providers, AT&T faces competition from systems integrators, online giants like Google, and others who want a piece of the health-care IT pie. The challenge and opportunity of serving the medical community is that it is a complex ecosystem with multiple constituencies including hospitals, doctors, clinics, insurance companies, the federal government and its Medicaid/Medicare programs, and -- oh, by the way -- patients.

"Health care is one of those areas that sometimes seems at war with the technology, in that it is dependent upon the advances technology has give it, but there is still resistance on many fronts," DiCarlo says. That's one of the reasons that the federal government's financial incentives for the health-care industry to upgrade its IT systems include "meaningful use" requirements.

Crawford sees that diverse ecosystem as a potential plus for AT&T, because it provides telecom services to almost every segment of the industry, and has the capability to develop end-to-end solutions.

Standards bearers
Another potential stumbling block is the lack of industry standards for things such as health information exchanges or personal health records, a fact that Crawford acknowledges but believes is workable. Because of its deep existing ties to the medical community, and participation as a member of groups such as Continua, a non-profit health-care alliance, AT&T may be in position to wield influence, says analyst DiCarlo.

In the meantime, AT&T continues to innovate, creating things such as pill bottles that light up to tell a patient when to take medication. Those innovations will now just be part of the carrier's bigger health-care effort.

For more on the recent surge of health-care IT apps, services and spending by service providers, please see:

Of course, AT&T isn't going at it alone in the health-care vertical. Light Reading will look at the strategies of the most active telecom players in the health-care segment. Look for more stories on this front very soon.

— Carol Wilson, Chief Editor, Events, Light Reading

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