The last few years has seen a big rise in what has become known as frugal innovation, whereby the use of resources in development, production or delivery are minimized or leveraged in new ways, thus producing dramatically lower cost products and services.

Much of this innovation has derived from the developing world, and indeed the phenomenon often goes by its Indian name of Jugaad.  Frugal innovation has thrived in this environment often because of the lack of resources present in this environment.  As the late CK Prahalad famously said, innovation comes when you don’t have the resources to do what you want to do.

Of course, such things haven’t really materialized in state run services in the west, such as healthcare or education, with many laying the blame for that lack of productivity gains at Baumol’s disease, which suggests that productivity gains come much more slowly in labor intensive industries.

Baumol emphasized his theory with the example from the world of classical music.  Whilst the world has changed a lot since Beethoven’s day, he opined, you still require four musicians to perform his string quartets.

This has not stopped many from casting envious glances at what has been achieved elsewhere however, and one of the most admired cases has been the work of heart surgeon Dr Devi Shetty.

Shetty has built up a chain of hospitals across India that not only produce exceptional outcomes for patients, but they do so at radically lower costs than are required in the west.

His health city development in Bangalore for instance has around 3,000 beds, with his surgeons completing between four and six hundred operations a year, with each costing around $1,400.

That’s roughly three times the number of operations undertaken by a typical surgeon in western hospitals, at a fraction of the cost.

What’s more, it has enabled him to offer his services to the rural poor in India, with richer patients paying more, so that poorer ones can receive care, either for free or via insurance offered for as little as 11 cents per month.

Frugal innovation in healthcare

It’s pretty cool stuff, and has received a lot of press, so it was with no small amount of excitement that I went to the UK India Business Council yesterday to hear him talk about his work.

Shetty was joined on the panel by Babylon founder Ali Parsa, which I wrote about last year – well worth reading if you haven’t already.  As an aside, I believe Babylon is free to use for the next month or so, and I very much encourage you to check it out.

The power of technology

They spoke about the various ways that they have gone about crafting their innovative approach to healthcare, both from an organizational perspective and also a technological one.

One thing Shetty said that stood out was over the use of IT in healthcare at the moment.  He suggested that if you took IT out of industries such as finance or retail, those industries would collapse, so important is IT to the functioning of each industry.

If you take it out of healthcare however, it’s quite probable that it would be able to function quite adequately.  The same could easily be applied to education too.

Both endeavored to emphasize this point wholeheartedly, with the incredibly rapid spread of mobile phones throughout the world used to highlight the important role mobile devices will play in healthcare.

Of course, none of this is really that new, just as the self-organizing teams utilized by Jos de Blok at Buurtzorg aren’t either.  Indeed back in 2013 the health service regulator Monitor highlighted the importance of looking overseas for inspiration in meeting productivity targets, and yet still these things struggle to gain traction within the NHS.

The challenges of change

It was interesting to note that there were very few people present at either the UKIBS event yesterday or the RSA event with de Blok that could actually implement anything they’d learned the next day at work.  Plenty of people that could admire the novelty of the idea and dream about working that way, but few who could really drive home the change.

There have been tours to places such as Health City and the Aravind Eye Hospital in recent years in an attempt to learn new ways of working, but I wonder how widespread this thinking really is, and just how stifled by regulation and culture any attempts at innovation are.

Crossing the knowing/doing gap

A paper by the Health Foundation details one such visit, and there appear to be a lot of ‘lightbulb’ moments highlighted in the report.  Lots of ‘wouldn’t it be great if…’ type statements.

The speakers at the event were not overly optimistic about such radical transformations ever happening in the NHS, with the general consensus being that they would largely happen in developing countries without such an established status quo.

Nevertheless, the NHS trip to India has triggered some changes, in attitude as much as procedure.  For instance, Professor Hilary Chapman from Sheffield NHS Trust, revealed that a number of projects have been launched since the trip, with many gaining some inspiration from the work being done in India.

For instance, a project has been launched to speed up the journey from capturing data to utilizing it, and efforts are underway to ensure one set of quality metrics are both understood and used by all staff.

The need for systemic change

A part of me wonders whether this is a little reminiscent of the response to Toyota within the car industry.  Many of the tools were copied from the Toyota Way in the hope that similar results would follow, but of course they seldom did.

They didn’t appreciate that the only way they could begin to mirror Toyota was to overhaul their entire management model.

I wonder if it isn’t similar with the NHS, and for the kind of results seen in Indian hospitals to materialize in Britain, a similar systemic overhaul of the service will be required rather than attempting to adopt bits here and there.

Maybe the slim chances of such a systemic change are grounds enough for the pessimism shared by the panel to be justified.  I very much hope that I, and the panel, are wrong.