Essays August 2010

Healthcare Innovation: Extreme Affordability

Neil Seeman and Kenneth Lam

 

Henry Ford’s vision for the Model T was that it would “meet the wants of the multitude”. In 1908, that vision changed the automotive industry forever, with ripple effects cascading throughout all of manufacturing. As Steven Watts writes in The People’s Tycoon, Ford was not a paragon of virtue — he wrote anti-Semitic screeds, had a decades-long adulterous affair, and sustained an emotionally abusive relationship with his son, Edsel. Nonetheless, as a man of the people, Ford saw that consumerism “often overlooked questions of social cost.”

Ford’s Model T was a game-changer. It was a car that wasn't designed for the wealthy minority. The Model T was Pareto-efficient — it didn't make luxury obsolete (today, the Bugatti Veyron still leads the pack at $1.7M USD), but it did pave the way to providing the middle classes the option for personal transportation. Ford broke away from the way things had always been done, ingraining the idea of the affordable car as an unshakeable feature of American culture.

So what, then, is the difference between affordability and “extreme affordability”, a paradigm shift now being promoted by the Stanford Institute of Design?

Healthcare Innovation and ‘Extreme Affordability’

The Stanford Institute for Design (which likes to be called the ‘d.school’) observes that vendors have historically been making products that serve “a tiny fraction of the world’s population”. It's not a bad business calculus when the top 5% hold over half of the world's wealth, but the d.school imagines products that cater to the remaining 95%; and so the concept of American affordability needs to get a little more ‘extreme’ if it's going to apply itself to a global market.

Following the d.school's understanding that “philanthropists are looking for ways to make charity more sustainable,” students taking Entrepreneurial Design for Extreme Affordability are pushed to be creative with developing-world budgets in mind, designing products within a price range affordable for the world's poor. In doing so, they're making “disruptive technologies” in the same way the Model T was disruptive — they create markets that were previously considered downright impossible. For the masses of people in desperate need of low-cost healthcare innovations, this kind of visionary approach can be life-saving.

Take for example the JaipurKnee, invented in 2009 by a group of students who have since rebranded themselves as re:motion designs.  The design is beautifully simple: it's a functioning prosthetic knee that costs less than $20. The JaipurKnee self-lubricates. Its novel hinge device allows for a greater range of motion than previous single-hinge prosthetic knees. Most important: it was designed with price at the top of mind; high-tech prosthetics in North America go for $50,000.

Impressed? Well, for would-be innovators everywhere, the journal for the d.school's class on extreme affordability should be mandatory reading. When students visit sites in India, Myanmar, Rwanda, Ethiopia, and Nepal, they don’t know exactly what they’ll be working on. Nor do their teachers – and this is seen as normal. How can Stanford students possibly know what people in these regions want, need and can afford without talking to them? The Stanford Institute of Design believes in “empathy building” to avoid misguided assumptions.

Taiei Harimoto explains the process for designing products. He is a mechanical engineering student who took the 8-month course and spent two weeks in Myanmar investigating Burmese stoves. He did more than just ask questions. As he describes it, “they [the professors] ask us to step inside the shoes of the user and to find new solutions for their latent needs. These are problems that have been there for a while so you ignore that they're there. For us, we're experiencing the difficulties from a fresh perspective and so we think, why not do this a different way?” This entailed trying the stoves out first hand.

Students are also taught to pay attention to the local economy and the preferences of the user. There's a genuine concern, Harimoto says, for whether the introduced product will compete with local solutions. You have to think about who might lose in the situation. In keeping with Pareto-efficient solutions, Harimoto was mindful of whether better stoves in Myanmar would hurt the local sellers of firewood (it won't because 50% gather their own). In his current project with D-Rev, he applies the common sense rule that if users don't like a product, it won't be adopted. D-Rev's product, a blue light used to treat neonatal jaundice, had to “look Western because the doctors care about prestige and they associate a Western aesthetic with prestige”. “It's kind of funny, but there you go,” he adds.

This process has led to two health-related projects now under continuing development – Embrace and Respira.  The Embrace team is working on an infant incubator. Wrapped around a premature infant, the incubator is like a sleeping bag that uses a pouch filled with a phase-change material (PCM) to maintain the baby’s body at the proper temperature for up to four hours. After that, the PCM pouch can be recharged and sanitized in boiling water within a few minutes. It is sufficiently light that it can be easily transported to rural villages. Compared to the $20,000 price of a traditional incubator, the Embrace incubator costs just $25. The Respira team is working on an asthma spacer. They've created a spacer out of a single, folded sheet of paper. The design has the basic functionality of more expensive spacers for a sliver of the cost in the Western world. “Because paper stacks flat, these spacers can be transported to even the most remote hospitals and clinics, and sent home with any asthma patient,” the Institute’s website says.

These are design maxims with broader applicability. Much of the time, healthcare technology needs cannot be accurately distilled from academic journals or from corporate brainstorming sessions in New York or Toronto, nor can the best “evidence” capture what your most loyal customers actually want. One of us asked a Toronto physician why she and her colleagues sometimes carry pagers despite knowing that Smart Phones improve team communication and care coordination. She said no one, until now, had bothered to ask. Despite using a Blackberry at her clinic, she still carries a pager at the gym since she needs something light during Pilates class.

Much of the hand-wringing over how to close North America’s “innovation gap” forgets about the needs of the 95% sharing less than half of the world's wealth. But the paradigm shift championed by Stanford’s Institute for Design can help innovators everywhere, from Chicago to Chennai. We just have to step inside the shoes of the user to find a different way. Henry Ford understood this, and so must we all.

About the Author

Neil Seeman is Director of the Health Strategy Innovation Cell at Massey College. Kenneth Lam, a recent Stanford chemical engineering graduate, will begin medical school at the University of Western Ontario’s Windsor campus.

 


Comments

Kenneth Lam wrote:

Posted 2010/08/08 at 11:00 AM EDT

I just received a note from Ben and Krista from D-Rev, and they clarified that the doctors care whether the product looks modern, sleek, and aspirational-- and that these are design qualities that can be achieved without looking "Western".

 

Tom Sommerville wrote:

Posted 2010/10/08 at 05:26 PM EDT

Inspiring article.

I am concerned that the profit motive will ultimately starve some of these innovative ideas before they can achieve broad market penetration among the 95%.

Some innovators will be able to follow the lead of the JaipurKnee team, carrying their ideas into the marketplace. Only some will have the will and abilities to do so. Who will champion the rest?

 

Please Sign In or Create an Account to add comments