How Low-Cost Health Innovations Yield Big Savings
Life + Money

How Low-Cost Health Innovations Yield Big Savings


When Argentinian car mechanic Jorge Odon was joking around with friends about how to get a cork out of an empty wine bottle using only a plastic bag, his thoughts were a long way from problem of maternal mortality. Yet in the middle of the night, it struck him that the problem with the cork and the bottle was remarkably similar to obstructed labor, when a baby can't get through the birth canal and puts its own and its mother's life at risk.

Despite his wife's skepticism – when he shook her awake to tell her his brilliant idea, she apparently told him to go back to sleep – Odon patented his idea, got partners on board and developed the "Odon device," which is now in trials. If the enthusiasm shown by Margaret Chan, director general of the World Health Organisation (WHO), is borne out, he'll go down in history as inventor of the first new assisted delivery device since vacuum suction and forceps were introduced decades and centuries ago.

His simple device slides a disposable plastic sheath around the baby's head, allowing an attendant to pull the baby out. As well as providing a cheap and safe alternative to forceps and vacuum pumps, it could protect the baby from the transmission of HIV or other infections in the birth canal. "It's inexpensive, it's ingenious, and it's so simple it can be used by lower level staff," Chan told a meeting of global health experts in London last week. "If it is approved, it would give resource-poor settings something they very badly need: a new life-saving tool."

Odon is not alone in pursuing low-tech solutions. Big companies like General Electric and Siemens, who build some of the world's most complex and costly pieces of healthcare kit, are also working to develop cheaper medical devices that can secure sales in emerging markets and, potentially, win business at home. The new wave of thinking effectively turns on its head the idea that healthcare innovation must always make something more high-tech, more sophisticated, more complex - and hence more expensive.

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With this kind of disruptive innovation, sometimes called "frugal innovation," instead of adding yet more bells and whistles, the idea is strip down to the bare necessities. "Disruptive innovation basically answers the question – instead of making what we already have better, and therefore more expensive and less accessible, can we instead introduce something more affordable, more convenient and more accessible to more people," said Jason Hwang, director of healthcare at the California-based Innosight Institute think tank.

It's not necessarily about lower spec, or lower quality, but it is definitely about lower barriers to access. The best way to achieve this kind of innovation, according to executives at GE Healthcare, one of the leaders in the field, is to be "in country for country" – an approach it has taken in developing handheld mobile ultrasound and electrocardiogram (ECG) scanners for use in regions where health clinics are few and far between, but the needs of the people are just as great.

For Mike Hess, an expert in cardiac rhythm disease management at the medical device firm Medtronic, it's also about reducing the likelihood a product might fail in potentially high-volume and lucrative emerging markets. "If you develop a product for an air-conditioned, power-stable, sterile environment and then put it into an environment where none of those things are true, it's likely to fail," he told the conference.

There's nothing startlingly new about companies adapting their products or the way they sell them to suit the needs and capabilities of poorer people in emerging markets. After all, single cigarettes are sold from kiosks in places where many people cannot afford to buy a full pack. Consumer goods firms like Unilever sell shampoo in single-use sachets for the same reason. British drugmaker GlaxoSmithKline sells single tablets of its painkiller Panadol in India.

But some experts think the healthcare industry in general has been behind the curve. While frugal cars, computers and mobile phones have rapidly become entrenched in emerging markets, there has been a tendency until recently to view large swathes of the developing world as a lost cause rather than a medical market opportunity.

Ali Mufuruki, chief executive of the Infotech Investment Group in Tanzania, said healthcare firms would do well to learn lessons from other industries. Citing Coca Cola's high-profile advertising campaign, which pictures young Africans above the slogan "a billion reasons to believe in Africa," Mufuruki says he'd like to see healthcare giants adopt a similar attitude.

"Coca-Cola sees a business opportunity in every African. We (in the healthcare industry) need to look at Africans not as needy, poor, problematic customers but as people with special needs that we can work to meet."

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Medtronic, the world's largest medical devices company, says it's got the message. Chief Executive Omar Ishrak told Reuters in January his researchers were now working to bring low-cost implantable devices to patients in Asia, Latin America and Africa. The U.S. firm has identified heart pacemakers as the most likely area for initial research and development.

Other experts point to history and say the health industry just needs to bring up to date what it has done before. Sailesh Chutani's Seattle-based start-up firm Mobisante took its lesson from China's 1960s Cultural Revolution, when Mao Zedong sought to address a critical shortage of medics in rural areas by giving basic training to an army of "barefoot doctors" and sent them out to provide essential care.
Mobisante's solution has been to develop a smartphone ultrasound probe called the Mobius which works like its full-sized big brother but fits into your pocket like a mobile phone.

It can handle up to six continuous hours of scanning between charges and can be used for fetal ultrasounds and imaging of organs like kidneys, gall bladders, glands and soft tissue. The device sends the image by mobile phone signal to a remote specialist to read, bringing the benefits of a full-blown scanning clinic to rural areas where there may be no expert in reading ultrasound scans – or even a steady electricity supply.

"Diagnosis is critical in healthcare. And if you make diagnosis so ubiquitous and available that you don't have to go to a doctor or hospital to get it, that's huge," said Chutani. "We think of this as a modern day version of the Chinese barefoot doctors. But we give them shoes, and they carry devices like these that can essentially tell you what is wrong with someone."

The device costs around $7,000, but Mobisante has also taken a leaf out of the cellphone industry's book and designed a business model under which the kit can be leased to the user for a more manageable monthly fee.

While the new approach is born out of a desire to service poorer countries with potentially large volume markets, the ideas – and the products emerging from them – are also starting to catch the eyes of recession-hit economies in the developed world. Chutani said he's already noticed a shift in both Europe and the United States, primarily fuelled by the need to contain or cut healthcare costs, to look at lower-tech, more accessible and more affordable ways to get health technology to patients.

With frugal innovation also focused on coming up with products that can be used by less skilled workers, developed economies are eager to explore ways to save money on years of training and on paying top dollar for medical experts. "This is a time of nearly global austerity," the WHO's Chan said. "And with budgets shrinking, how can the unprecedented momentum for better health be maintained? Much of the answer lies with these kinds of innovations."