It's been pointed out that when it comes to capitalism, there are often many cases where the poor can teach the rich a thing or 2. In the past, we profiled private education available even in slums. A few weeks ago, the Economist had a great article about the innovative entrepreneurship that's starting to deliver healthcare to millions of previous unserved desis.

As the patient was chatting away, Vivek Jawali and his team had nearly completed his complex heart bypass. Because such "beating heart" surgery causes little pain and does not require general anaesthesia or blood thinners, patients are back on their feet much faster than usual. This approach, pioneered by Wockhardt, an Indian hospital chain, has proved so safe and successful that medical tourists come to Bangalore from all over the world.

This is just one of many innovations in health care that have been devised in India. Its entrepreneurs are channelling the country's rich technological and medical talent towards frugal approaches that have much to teach the rich world's bloated health-care systems.

There are hundreds of ways to slice and dice "innovation" but one of favorites buckets stuff into 2 broad categories -

  • product innovation - new, consumer visible products / services... new microchips... new features... Because it often literally results in new things on store shelves, product innovation tends to be highly consumer visible. In the medical arena, this would be new drugs, procedures & devices.

  • Note that just the already "socialized" portion of US health spending equals total health spending in many other countries altogether.

    process innovation     - the delivery pipeline for getting stuff to the consumer. This means backoffice things ranging from more efficient factories to new retail vehicles like Wal-Mart, Amazon.com and so on. Process innovation is far less consumer visible but has a tremendous role in the long run. It's also, alas, far less politically visible.

In the broad economy, new "value" is generally driven through product innovation while new "efficiency" / "lower cost" tends to come from the process side. Both are crucial for raising living standards in the long run although process innovation just doesn't generate the same sex appeal.

Through this lens, a classic criticism of the US's healthcare environment is that the "process" side of delivery (docs, hospitals, insurance co's, medicare) is comparatively rigid, while the "product" side is incredibly fluid & competitive ? yesterday's hot startup can quickly become today's BosSci. The result is tremendous innovation in creating new drugs and treatments but comparatively less in finding innovative ways to deliver these products & reduce costs.

Folks in the Desh, on the other hand, are quite explicitly investing in process improvement and often eschewing the the latest & greatest from the product side -

...Unlike the hidebound health systems of the rich world, he says, "in our country's patient-centric health system you must innovate." This does not mean adopting every fancy new piece of equipment. Over the years he has rejected surgical robots and "keyhole surgery" kit because the costs did not justify the benefits. Instead, he has looked for tools and techniques that spare resources and improve outcomes.

And, as with nearly all process improvements, the race for marketshare forces a benefits trickledown & learning curve ascent -

...For years India's private-health providers, such as Apollo Hospitals, focused on the affluent upper classes, but they are now racing down the pyramid...His model involves building no-frills hospitals using standardised designs, connected like spokes to a hub that can handle more complex ailments.

..Monitor estimates that its operating theatres accommodate 22-27 procedures a week, compared with four to six in other private clinics. LifeSpring's doctors perform four times as many operations a month as their counterparts do elsewhere--and, crucially, get better results as a result of high volumes and specialisation.

..Aravind's founders use a tiered pricing structure that charges wealthier patients more (for example, for fancy meals or air-conditioned rooms), letting the firm cross-subsidise free care for the poorest.

Aravind also benefits from its scale. Its staff screen over 2.7m patients a year via clinics in remote areas, referring 285,000 of them for surgery at its hospitals. International experts vouch that the care is good, not least because Aravind's doctors perform so many more operations than they would in the West that they become expert.

Will the benefits of a more decentralized, entrepreneurial delivery model find their way to the US? Alas, current political winds seem to be blowing in the opposite direction --> towards even more centralized & nationalized delivery processes in the name of reducing costs and improving coverage.