Did you know that 12% of the world’s population – 930 million people – spend at least 10% of their household budget on healthcare?
This is alarming.
Due to this, 100 million people are being pushed into extreme poverty. These are people who earn less than $1.90 per day and still are forced to spend on healthcare.
The need of the current global systems is to work together and innovate high-quality and affordable better health interventions. However, keeping costs of vital, life-saving interventions low is easier said than done.
That is just one part of innovating in healthcare. To solve healthcare problems, another vital aspect is making healthcare financing more viable.
All these insightful topics were the premise of SLX Learning’s latest webinar. We had four industry experts who shared their insights on how healthcare financing and innovations in healthcare both work alongside to ensure that there is last-mile health coverage to every single person on Earth.
Healthcare Evolution: A Brief History
We have defeated large-scale pandemics like the Spanish Influenza and the Black Death, and today are in the face of another pandemic.
It took innovation of various sorts to overcome these pandemics. For instance, Edward Jenner discovered vaccination while attempting to find a cure for smallpox.
Today we have robotic surgeries, assembly line surgeries, and telehealth – which would have seemed impossible a hundred years ago.
“100 years ago, the average life expectancy was 40,” said Shravan Subramanyam, President & CEO, GE Healthcare India & South Asia and Managing Director, Wipro GE Healthcare at GE Healthcare. “Now the average life expectancy is 73. What has changed in these last 100 years?”
Shravan gave an overview of our journey through the years.
“We saw a reduction in the fatal infectious diseases and an increase in non-communicable diseases. The infectious diseases that wiped out large sections of populations were curbed. This transformation happened over a span of over 100 years. “It was caused by numerous innovations and breakthroughs,” he said. “Antibiotics, wound management, surgical intervention, diagnostic procedures, pharmaceutical remedies were responsible for this reduction in the infectious diseases,” he said, adding that the real major healthcare impact has been through Public Health Intervention, said Shravan.
Healthcare interventions are essential to save more lives by making healthcare more accessible.
Interventions don’t always need a digital element, said Siraj Dhanani, CEO of InnAccel Technologies that builds therapeutic interventions and medical technologies in India.
Siraj cited an award-winning innovation by InnAccel as an example. They developed a portable, low-cost neonatal breathing device for premature babies. This was devised keeping small towns of India in mind where the infrastructure is poor and electricity supply is erratic.
Siraj said, “In the western countries, Continuous Positive Airway Pressure (CPAP) therapy has been available for decades. It is an intervention that provides assisted breathing to premature babies.”
In India, 2/3rd of the babies born need respiratory support at birth. But given the high-infrastructure needs of a CPAP – need for a continuous electricity supply to operate, non-portable design and of course, the high cost – it is not available across most Indian cities, small towns and villages.
In India, erratic power supply is a common problem even in the top, tier-I cities. Such innovations make high-cost and high-maintenance healthcare accessible in lower-income populations and affordable in developing economies.
The absence of this critical device in most Indian towns was what led to the innovation of this low-cost alternative by InnAccel. The best part is that it is robust, portable and could be operated using a battery. Even if out of charge, it could be charged using a car battery.
Interventions – whether tech-based or not – are essential for healthcare to reach people irrespective of the economic strata they belong to. But, another factor to make universal coverage of healthcare is access to capital.
Financing: How to Access Capital for Healthcare?
Healthcare systems require exorbitant financing for research and diagnostics, human resources, and medications. Healthcare financing happens through a mix of government spending, out-of-pocket expenditures, private spending through insurance, and external aid.
However, healthcare expenditure varies from country to country. In low-income countries, healthcare spending is only about 5% of total worldwide health spending even though they account for half of the global disease burden.
Our next speaker, Gulshan Yadav, National Sales Head – Clix Capital, said that one the one hand, given how sophisticated treatments had become, healthcare demands a good fraction of a family’s expenses.
But, it is also essential that systems across the world plan innovative financing models for healthcare. “Financing in healthcare can’t come from the conventional loan-based models. Access to capital has to come through innovative models. There should be models that can work across all players in healthcare – corporate hospital chains, small diagnostic centres and health clinics,” said Gulshan.
According to Gulshan, Public Private Partnership (PPP) model is one way to make healthcare more accessible while addressing capital issues.
He cited an example of a mini project where Clix Capital partnered with a state government. They installed 27 CT scan machines at small clinics of small Indian towns which did not have this facility. “After the machines were installed, the frequency of scans done were nearly 50 per day. It was stunning how they were managing without such an essential infrastructure for so long despite the demand,” he exclaimed.
He added that globally, captive financiers have understood how healthcare economics work. “Old models may not work beyond a point. We need to understand the economics from the perspective of health companies and OEMs,” he added.
Government Intervention in Healthcare
To reach the last mile of beneficiaries in healthcare, digital innovation and the stepping up of governments is important.
For instance, Gulshan added, the intervention by the Indian government during COVID-19 helped many Micro, Medium, Small and Mini industries (MSMEs) get back on their feet in a year’s span. “In COVID, the Indian govt was an equalizer for all companies razed to 0. The emergency credit line guarantee scheme allowed MSMEs to borrow money with minimum evaluation,” he said. This, he added, has led to many sectors being reaching 50-60% of their pre-COVID levels.
Another speaker, Siraj, shared an insight for those seeking funding for healthcare projects.
He said that the Department of Biotechnology in India offers the DBT-BIRAC Biotechnology Ignition Grant (BIG). The grant offers up to Rs 50 lakhs to innovators and entrepreneurs for ideas developed to a prototype. Besides, BIG, there are subsequent grant programs for further stages of product development. These support individuals and companies all the way from concepts to large-scale manufacturing.
Affordability in Healthcare
In a country like India, the affordability angle is important. This is where the concept of frugal innovation comes to the fore.
Shravan said, “GE has been in India for over 30 years. Back then, most of the spending on healthcare was out of pocket expenditure. We found that people were taking sub-optimal decisions on their health because of the high cost of healthcare. There was an opportunity to address healthcare in India and to make a significant impact on outcomes through relatively low–cost fixes in tech, hardware and in ensuring access.”
Citing examples, he said that some products in the cardiac space, ultrasound and imaging have been developed in India for India and other developing countries. In the early 90s, there were products made that were portable and could be carried to Tier–2 and Tier-3 cities, and utilized batteries instead of using electricity.
Siraj also threw some light on affordability.
According to him, affordability is a lot broader element that must align with the existing factors – existing infrastructure, the existing skillset of caregivers. The right tech intervention must be aligned to the reality of Indian healthcare and price sensitivity is just one of the factors.
Case Study: Ventilator-associated Pneumonia Deaths
He cited an example of tech innovation for patients on ventilators.
Ventilator-associated pneumonia deaths are a big concern worldwide. Several patients who are on a ventilator die of lung infection caused by the absence of proper oral hygiene. In the US there are adequately trained caregivers who give proper oral care to patients on ventilators. “The rates of such deaths in the US under 5 percent, due to the quality of care the nurses provide. This quality also depends on factors like workload of caregivers, quality of training, infrastructure. Our solution to tackle this was to build an automated and intelligent system that could replicate what a highly trained nurse can do. That is, provide top notch oral care and reduce lung infection rates in India,” said Siraj.
While this tech was developed for India, it gained interest from developed markets as well. “The interest from them was from a different angle. It was about taking a manual process, automating and standardizing it and freeing up expensive nurse time. Now, in the time of COVID, this tech has even more use as giving oral care to patients is risky for caregivers,” he added.
Two Cents of the Speakers for the Audience
Before winding up the extremely insightful and engaging webinar, our speakers gave us their two cents each. On innovation, on healthcare and on the myriad possibilities what it takes to be an innovator in healthcare. Here is what they said:
“Capital is expensive will come at a cost. You should have confidence in the product, and things will fall into line. If you have confidence in your idea, pass that confidence to the lenders or investors,” said Gulshan Yadav.
“If you are thinking of innovating in healthcare, there is no better sector. If you are planning to innovate for India or the emerging markets – it is extremely easy to make a difference. There are many problems that can be solved. Tap grant sources that are here – thereis a lot of capital available for the right product and the right team,” said Siraj D.
“Traditional sources of financing are here to stay. They are the backbone of financing, but we need to constantly look at alternative sources of funding. For instance, CSR (Corporate Social Responsibility) resources, developmental finance. A major chunk of funding from MNCs (multinational corporations) and multilateral agencies like the World Bank goes to government projects but trickles down tothe private sectors. In India, we have some good examples of a Public-Private Partnership (PPP). PPP can ease healthcarefinancing and make it more sustainable,” said Shravan.
If this has piqued your interest, here is where you can watch the full webinar!