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What is Frugal Innovation and why does it matter in healthcare -- Seminar by Dr Yasser Bhatti at Kings College London
1. King’s College London
MedTech Society
14 Jan 2019; 6:30pm – 7:30pm
yabhatti@frugal-innovation.com
What is Frugal Innovation
and why does it matter in
healthcare
2. What do I do ?
• 2018-Current: Honorary Lecturer at Imperial, Lecturer at
Queen Mary and New College, Oxford
• 2014-7: Research Fellow in Frugal Innovation at the
Imperial’s Institute for Global Health Innovation.
• 2009-14: PhD research at Oxford was on innovation,
strategy, and entrepreneurship.
• My background from Pakistan as developing country
motivated me to focus on leveraging innovation in
healthcare sector.
3. Adopting new ways in innovation
• Base of the Pyramid Innovation
• Grassroots Innovation
• Reverse Innovation
• Jugaad Innovation
• Frugal Innovation
3
14. Study of two communities of
innovators and entrepreneurs.
1. Global Social Business Incubator
(Santa Clara)
2. Design for Extreme Affordability
(Stanford)
• 163 business plan document
summaries,
• 81 interviews with
entrepreneurs, investors, and
academics, and
• 2 months of observations at an
annual intensive social
entrepreneurship and
innovation ‘boot-camp’.
http://www.cambridge.org/97811071
88976
15. Why are frugal innovations needed for
global healthcare?
High-Income Countries
• Ageing populations
• Increased burden of chronic disease
• Exponential cost of healthcare delivery
Low and Middle-Income Countries
• Establishing healthcare systems where
previously care has been sporadic and of poor
quality
Photo of Malawi Clinic, Courtesy of Matthew Prime
18. Procedures per
year
Cost of similar
procedure in the US
Aravind
Eye Care
240,000 50x
Narayana
Health
7,500 30x
The Innovation Sandbox, Prahalad 2006
Famous Frugal Innovations both Surgical
20. Cardio-thoracic Surgery: Narayana
20
WSJ.com (2009)
Quantity and QUALITY
28 day mortality is 1.4% rather than 1.7% in Cleveland Clinic
https://www.youtube.com/watch?v=_fhEW-LfWes
23. 23
Surgical and Household Drill
Bosch Drill:
Same speed
Same torque
Lightweight
Bosch Batteries:
Longer lasting charge
Longer life
Very low cost
https://youtu.be/YbWD6u5O45g
25. Overlay of two figures in support of the finding that frugal
innovation is not cheap
Image source: Bhatti et al, 2018. Frugal Innovation – Models, Means, Methods. Cambridge University Press.
Cheap
Frugal Luxury
Experimental
29. The team
realized that
designing for
inspiration and
end users was
not enough.
It had to design
also for
manufacture
and
distribution.
30. Keys lessons
• Needs and ideation locally identified in
developing countries
• But draw from best practices in other sectors,
innovations, and from developed countries
• Scale up in mostly developing countries
I focus on
innovation under constraints;
the localisation and globalisation of innovation;
the role of emerging market economies and;
situated actors such as social entrepreneurs in emerging trends in innovation;
particularly frugal innovation and reverse innovation.
2004
2016
Year of publication of Agtmael? 2007
Next 11 Bangladesh, Egypt, Indonesia, Iran,Mexico, Nigeria, Pakistan, the Philippines, Turkey, South Korea and Vietnam – identified by Goldman Sachs investment bank
Year of publication of Agtmael? 2007
Next 11 Bangladesh, Egypt, Indonesia, Iran,Mexico, Nigeria, Pakistan, the Philippines, Turkey, South Korea and Vietnam – identified by Goldman Sachs investment bank
Improvisation, bricolage
Difference between jugaad and frugal ?
“How well could you use an asthma inhaler? How well could you teach someone else to use one? They’re tricky. Don’t forget to shake it first. Hold it the right way up. Seal your lips around it: people seem to find that hard. Then — this is the really tricky bit — co-ordinate releasing the dose of medication as you inhale, so it’s carried down into your lungs and doesn’t end up on the back of your throat, or wafting out into the atmosphere. After that, hold your breath for a few seconds. And then repeat. I find it hard. It can be almost impossible for smaller children, or if you’re not very co-ordinated, or if when stressed because you’re finding it hard to breathe.
It’s lots easier, and more effective, if you use a spacer — a chamber (with a mask, for small children) into which the medication is released, making it less important to co-ordinate your breathing just so. People often think of spacers as being for children, but I suggest to all my own patients that they use a spacer whenever they can.
Colloquial definition of Frugal: sparing or economical with regards to money
Bricolage, french, DIY, improvisation, making do with whats on hand
Image source: http://marketinghightech.net/the-book/chapter-4/ch4-aravind
Aravind’s social mission is to provide “sight for all and to see everyone as one”
Since 1976 Aravind Eye Hospital has been on a mission to end blindness in India seeing 2.5 million patients a year, conducting 350K eye surgeries a year, and gross margin of 40% despite that 70% of patients receive free or heavily subsidized rates. Costs tens of dollars versus 1000 dollars plus.
With less than 1% of the country's ophthalmic manpower, Aravind accounts for 5% of the ophthalmic surgeries performed nationwide
$200 a piece to locally produced $5 a piece, costs $10 to conduct a cataract operation that lasts just 20 minutes.
The hospital's Aurolab pioneered the production of high-quality, $5 low-cost intraocular lenses producing 700,000 lenses a year, of which three quarter are exported all over the world. However, the lenses are not exported to the US since Aravind cannot afford the costly US-FDA clinical approval process (Rubin 2007).
NH's average cost of a bypass surgery is $1,500 (Rs 90,000) compared to $44,000 in the US
With a (EBITDA) margin is a healthy 13 per cent
Private equity funds JPMorgan and Pine Bridge have picked up a 24 per cent stake in NH.
Task shifting, specialist tasks, Ford's assembly line high volumes, JIT zero inventory
It leases some on a pay per use basis.
Ascension largest non-profit health system in the U.S. and world's largest Catholic health system.
28 day mortality is 1.4% rather than 1.7% in Cleveland Clinic
NEJM Jan 2016: Hernia repair is the most common operation in the world (20 million operations performed annually), but Dr Tongaonkar's (2003) Commercial nets cost more than $100 versus open market nets can cost around $2.50
Over 9 million above-knee amputees in the developing world do not have access to the prosthetics
$5K to less than $50 per knee
Resource constraints: (tangible in terms of technology, capital, labor) or intangible
skills, knowledge
Technology innovations, tools, machinery and devices developed from scientific
knowledge
A social innovation is a novel solution to a social problem that is more effective,
efficient, sustainable, or just than current solutions. The value created accrues
primarily to society rather than to private individuals.
Institutional innovation: norms, behaviors, practices, regulations need for an
efficient market economy, soft (contract enforcement, legal recourse, credit
worthiness, capital markets) hard, (infrastructure, roads, ports, water supply,
electric grid)
Find out how to defend Institutional and Business innovation overlap!
Innovation under three or any two of the three constraints is Frugal innovation
Any two of three sandbox constraints foster frugal innovation