To protect sensitive data - such as HIPAA info
Do you want just one field encrypted or a group of fields (if you're dealing w/HIPAA data, probably it is more than one, right?) Create custom fields where the 'Type' is, say, 'HIPAA' (you can create this subtype by subtyping your basic object, whether it is Activities, Campaigns, or Contacts). From there, you'd need to add a hook/code to encrypt fields where the Type == HIPAA.. You'd need to also determine which user type(s) (Admin?) should be able to see unencrypted values and handle that.
You should be able to use the functions in:
to do symmetric encryption/decryption of the fields. Password related fields in the CiviCRM db are encrypted. As Lesley mentions, there are two aspects to this problem. Encrypting data, and restricting access to the data to a certain class of users