John Hoffmire: Indian firms joining battle to provide low-cost health care

Published: Monday, Oct. 7 2013 12:10 a.m. MDT

In this Feb. 4, 2011 photo, Nasir Khan writhes in pain from kidney stones, as his brother holds up an x-ray, and another uses a hot pan to keep his wound warm at their home in Aligarh, India. Doctors said Khan would need a fourth surgery, and already in debt over Nasir's past medical bills, his impoverished family saw no alternative but to sell the broken brick home where Nasir and his four brothers live with three wives and 11 children. Each year, the cost of health care pushes some 39 million people into poverty, with patients shouldering up to 80 percent of India's medical costs. That's about US$66 (3,000 rupees) per person on average, a crippling sum for the 800 million or so Indians living on less than US$2 a day.

Mustafa Quraishi, Associated Press

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Editors note: The vast majority of this article was written by Ben Young.

Across the modern world today there are few topics more divisive and debated than health care. Governments are constantly in a struggle to ensure proper care is available to those who need it, while also combating risings costs and greater demands on existing systems. Often, the groups that are hardest hit in this process are low-income families struggling to make ends meet. These problems only compound in developing nations where average incomes are lower, and poor standards of living negatively affect health on a daily basis.

In recent years, charities, non-profits, and for-profit businesses in the developed world have begun to take an increased role in fighting these challenges. Whereas groups historically would focus on simply providing services and care at whatever costs, for-profit companies and NGOs are now moving towards a more active role in combating costs.

One prominent example in the US is a company called Medtronic. Based in Minneapolis, Minnesota, Medtronic is a global leader in providing mini-medical devices domestically and internationally. A current campaign, called Healthy Heart for All (HHFA), is focused on providing not only affordable, but high-quality cardiac diagnosis and treatment. HHFA is now available in 20 cities across India.

However, this movement towards low-cost health care in developing countries, especially India, is neither the sole property of US companies, nor of the developed world. Several Indian firms have recently begun work to provide low-cost solutions, supplementing great strides that have already been taken for decades.

One such company is known as Skanray. A start-up out of Mysore, India, Skanray was founded in 2007 by Vishwaprasad Alva, an engineer who formerly worked at GE. With his experience in designing X-ray machines, Alva saw an opportunity to create a competitive company providing low-cost medical devices, while also accomplishing a social good. Over three-quarters of medical gear in India is imported and too costly for smaller areas and rural clinics to afford. In a country of 1.2 billion where 70% of the population lives in rural areas, this leaves a staggering number of people without proper access to medical technology.

After initial struggles to grow, Skanray finally gained traction in 2009 by finishing construction on a new production facility. With this factory, the company gained the capability to produce low-cost machinery domestically, significantly decreasing costs to clinics and hospitals. For example, Skanray’s X-ray machine is sold for 154400 Indian rupee ($2500), about half the cost of the lowest competitor. Skanray’s product line now includes x-ray generators, x-ray imaging systems, as well as plans for other critical care devices in the near future.

Another organization with a strong track record in low-cost medical help is Bhagwan Mahaveer Viklang Sahayata Samiti (BMVSS). Headquartered in Jaipur, India, BMVSS is the world’s largest organization serving the disabled, and has been providing assistance since 1975. Known by the nickname Jaipur Foot, BMVSS supplies prosthetics and mobility aids to disabled people all across India, and much of Asia, as well. The limbs, joints, and appliances associated with them are all given absolutely free, with sizing and fitting done in just one to three days.

Incredibly, each of the prosthetic limbs provided costs Jaipur Foot just under 3000 Indian rupee, or $45. A comparable limb in the US would sell for well over $12,000. With costs this low, and relatively light overhead (4% as compared to an NGO average of 20%), Jaipur foot is able to serve over 65,000 patients each year, all at absolutely no cost to those treated. Since its humble beginnings in 1975, BMVSS has provided limbs for over 1.2 million people.

These two firms are merely the tip of the iceberg of those helping to alleviate suffering and pain throughout India. Similar projects are underway throughout the developing world as industry and technological leaders combine to help those in need.

As the desire for health care and low-cost solutions grows across the world, many organizations will be able to provide not only cheaper solutions, but more effective treatment. In fact, some innovations will and already do cross borders from developing countries to developed ones, but more on that in a future piece.

John Hoffmire teaches at SaÏd Business School at the University of Oxford.

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