Background to World Economic Forum Project

The problem was daunting: building health care infrastructure in remote areas of the world would take ten to thirty years and cost millions of dollars. Even if built, realistic solutions for a sustainable funding mechanism had not been identified for centuries.

Rather than delay the provision of desperately needed healthcare services, the World Economic Forum posed a question: Are there existing proven innovative healthcare models that can be replicated? In particular, do the solutions provide access to quality care with limited infrastructure and qualified workforces, at a fraction of the common cost?

Locating a model that reduced costs for both patients and healthcare systems while simultaneously providing quality care seemed counterintuitive. However, the answer was a resounding "yes." Against the backdrop of mounting challenges to health systems, the last decade has seen a number of innovative solutions to improve access to quality healthcare, particularly in emerging markets.

The question became not what to invent, but how to replicate existing inventions and scale up these proven models. The Forum recognized that innovative delivery models overcome the global challenge of improving access to quality care at affordable costs.

The innovation solutions focused on addressing common barriers to healthcare access, such as geographic (lack of facilities), financial, informational (education, awareness), and cultural (stigma of certain diseases). The Forum and its partners launched a project entitled "New Models in Health Care Delivery" to further understand the following:

• What works in healthcare delivery
• Why it works
• How it can be scaled

To this end, the Forum assembled a Steering Committee including Aetna, Astra Zeneca, Cisco Systems, Duke University Health System, Merck, and Pfizer, who worked with McKinsey & Company, one of the top global management consulting firms, to research global innovations. Following are the results of McKinsey’s research, which eventually led to the formation of IPIHD.

The innovation challenge – and opportunity

Can societies improve access to affordable quality care?

This conundrum is preoccupying healthcare leaders everywhere. The current annual cost of healthcare globally is estimated to be in the region of $5-6 trillion, and healthcare systems are consuming an increasing share of income in developed and developing nations alike. Indeed, increases in healthcare expenditure in OECD countries have, on average, exceeded GDP growth by two percentage points annually over the past 60 years.

How can the productivity of healthcare systems improve? Getting more for less requires innovation in the way healthcare is delivered in broad health systems, clinical care, and interventions.

Research identified more than 30 cases where innovation in delivery has led to step change improvements in productivity.

Innovation in health care delivery is taking place around the world

In Mexico, Medicall Home now provides telephone-based advice and triage to more than 5 million people. For a fixed fee of $5 a month on their phone bills, two-thirds of callers have their healthcare needs resolved over the phone.

In India, LifeSpring has established nine maternity hospitals in three years. These hospitals offer high-quality, no-frills maternity care at one-third of the cost of comparable private-sector competitors. LifeSpring hospitals display a price list for all to see – for normal deliveries, they charge $90 rather than the typical $300.

In the United States, the Care Management Organization at Montefiore Medical Center has used remote monitoring to reduce hospital admissions for elderly patients by more than 30 percent. Patients are managed actively and accurately at a distance, eliminating the need for them to travel to care facilities.

The most compelling cases of innovation are found in emerging markets. There are two reasons for this. First, necessity breeds innovation. In the absence of adequate healthcare, care providers and entrepreneurs are compelled to improvise and innovate. Second, the weakness of the existing infrastructure and institutions equals fewer constraints placed upon entrepreneurs.

In short, absent restrictions faced by first-world countries, healthcare entrepreneurs in the developing world can bypass outdated 20th century Western care delivery models and forge new solutions fit for the century ahead.

The secrets of success

Each innovative solution reinvents the logic of delivery and changes underlying economics. Research identified six success factors that each innovator employed:

1. Get close to the patient and follow established behavior patterns
2. Use proven technologies disruptively to reinvent the delivery model
3. Train the workforce to develop targeted skills while confronting professional assumptions
4. Standardize operating procedures wherever possible
5. Use existing technology, equipment, or infrastructure, then pass the savings on to consumers
6. Open new revenue streams across sectors to share costs and resources

Successful innovators pull many of these levers. The awareness of the six success factors can enhance existing delivery models, inspire new innovations and test early ideas.

Where innovation happens

Upon examination of the healthcare delivery value chain and care that runs from the beginning to the end of life, four clusters of innovation were observed: franchising, product specialization, technology-enabled networks, and integrated care.

Franchising, traditionally a retailing concept, focuses on delivering highly-standardized, one-way flows of information, products, or services. The franchising model seeks to harness the talents of local entrepreneurs to operate at a local level and be part of the rhythm of daily life. The model lowers distribution costs and improves adherence to clinical protocols. Furthermore, the franchise model is simple to implement, even with a relatively unsophisticated workforce; targeted training can overcome any labor constraints.

Production specialization, well-established in many other industries, introduces "lean" thinking to healthcare. The aim is to standardize operating processes, eliminate waste, and dramatically reduce the cost for complex care from cardiac surgery to cataracts to normal births. Healthcare innovators who follow this strategy have successfully confronted professional assumptions and produced workforces with the right skills.

Technology-enabled networks such as mobile phones and call centers have been adapted for healthcare delivery. These asset-light models exploit existing infrastructure, centralize medical talent to raise utilization, and follow existing patterns of patient behavior. By opening up a two-way dialogue with patients using such networks, some companies are beginning to deliver care at a distance, reducing cost and raising quality, and to fundamentally "change the game" in healthcare delivery.

Finally, with the great challenge of chronic disease, delivery innovations appear to have the most impact when they operate within a system of integrated care where information and incentives are aligned so that all providers collaborate in the best interests of patients. The integrated model evidently delivers a dramatic reduction in costs while raising patient satisfaction and clinical quality.

Implications

The research suggests that healthcare leaders should encourage franchise models and promote production specialization in tertiary care to improve access and quality while simultaneously reducing costs and creating jobs, and harness technology to manage and integrate health care delivery from any distance.

Innovative healthcare delivery is possible; but change is hard to implement. How can healthcare innovations be replicated in other countries?

Potential companies should consider the following two questions:

1. Can the underlying processes be standardized?
2. What is the regulatory environment in the receiving country?

First, the potential to replicate solutions is enhanced by the ability to productize the underlying innovation and adapt to local circumstances, such as with the clinical protocols and delivery model. Advances in medical science, technology and business model design can be ‘productized’ to provide consistent quality at lower cost, thus increasing potential for replication.

Second, understanding the regulatory environment is important when adapting to local circumstances. For example:

• Local regulation: Government can act as either an enabler or a barrier, imposing limitations on conducting business
• Dominant payment mechanism: The payment system can act as a limiting factor in the ability for an innovative private sector business model to be replicated in certain countries
• Legacy care infrastructure: Local circumstances dictate the necessity of adaptation including workforce advocacy groups and perception of civil society of innovation in healthcare

Overall, innovations in healthcare delivery require external support to survive and prosper. Policymakers and other health system leaders will have to make changes to enable innovation and allow innovators to flourish.

As healthcare leaders ponder today's quality, access, and cost challenges, they should draw comfort that at least some of the solutions already exist. The real challenge, therefore, is not to invent but to implement. Given the pressure on healthcare systems everywhere, it's an urgent task.