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Verizon to Introduce Secure E-Mails for Medical Records

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March 4 (Bloomberg) -- Verizon Communications Inc., the second-biggest U.S. telephone company, will introduce the first national service enabling doctors to securely exchange medical records no matter what computer system they use.

The service will begin tomorrow following testing among about a dozen U.S. hospital systems and other clients. Under the program, medical providers who pay a monthly fee will be able to share data, texts and e-mails while still meeting U.S. privacy standards. About $5 billion of Verizon’s $111 billion in revenue in 2011 came from health-related customers, said Peter Tippett, the New York-based company’s chief medical officer.

A push by the Obama administration to computerize a U.S. medical system that relies largely on paper records has been hampered by the tendency of hospitals and software providers to create closed systems that don’t communicate with one another. Verizon is competing with Dallas-based AT&T, the biggest U.S. phone company, and cable and Internet providers for a share of the market in connecting the industry electronically.

“The vast majority of stuff shared by providers ends up not digitizable and it’s a huge pain,” Tippett said in a telephone interview. “There’s huge savings in this. There’s a huge easing of access and care.”

Verizon will charge about $10 to $60 a month per user for doctor’s offices and hospitals to be on the system, Tippett said. The new service will consist of two components: an information exchange for hospitals to securely move data, and a web-based portal though which providers, from doctors to nurses to ambulance drivers, can exchange messages and texts.

Security Concerns

Physicians have traditionally avoided e-mail because of security concerns and data limits that often prevent them from sending large files such as X-Rays and MRIs, Tippett said. Verizon’s product, known as Secure Universal Message Services, overcomes those problems and is likely to attract “thousands” of medical providers, he said, declining to be more specific.

Verizon believes its new service will be a “game-changing” solution, Tippet said.

“We really think it will be disruptive,” he said. “It’s kind of like giving a gift of e-mail, but in a secure form, to the entire health-care ecosystem.”

The Obama administration’s records initiative, enacted as part of the economic stimulus law in 2009, makes hospitals eligible for payments of as much as $11.5 million if they can demonstrate “meaningful use” of computer system. Hospitals and doctors who don’t adopt electronic records by 2015 will be penalized with lower Medicare payments.

To contact the reporter on this story: Alex Nussbaum in New York at

To contact the editor responsible for this story: Reg Gale at

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