ECG Tech from India Could Save U.S. $50 Million Today

Electrogardiography: A Brief Review

Electrocardiography (ECG) is a diagnostic method of recording the electrical activity of the heart. This is traditionally performed by attaching electrodes to the skin, which then pick up waveform electrical impulses generated by the polarization and depolarization of cardiac tissue. These are mapped on an electrocardiogram and interpreted to measure heart performance and health.

The use of ECGs is ubiquitous and popular among providers, and especially tertiary care hospitals. The Mayo Clinic, for example, performs about 240,000 ECG tests per year in their laboratory, and the global market for ECG machines is set to grow to over $5 billion by 2020. This growth is driven by the wide range of increasingly common conditions ECGs are able to effectively monitor, including heart arrhythmias, anginas, pericarditis, most symptoms of heart disease, the thickness of the heart's walls, the rate and regularity of heartbeats, the size and position of the chambers, and the presence of any changes to the heart's function in response to surgery, devices,  or medications.

The average cost of a provider-administered ECG test in the U.S., which is comprised of the test itself + the interpretation of results by a trained Cardiologist, is $1,750. As usual, the prices vary substantially from provider to provider, the lowest in the U.S. being $550, and the highest being $3,300.


The U.S. Market for ECG Machines

ECG machines vary in diagnostic ability, physical footprint, and price. The current market for these machines can be divided between the 'incumbent' products most of us associate with ECGs, and emerging 'disruptive' products that are portable and less expensive. The incumbents are made by about 16 manufacturers from the developed world, including Burdick, Welch Allyn, Schiller, GE, Bionet, Philips, and Nihon Kohden. They are often equipped for use with 12-leads, often include printing capabilitieg, and they are large enough to be wheeled around. They cost between $1,200 and $3,000 each.

By contrast, the disruptive class of ECGs are made by an (almost) entirely separate set of manufacturers, mostly from the developing world, including ReadMyHeart, InstantCheck, PC-80, AliveCor, ECG Check, Dimetek DiCare, MD100E, PC-80B Color, HeartCheck PEN, REKA E100, and Afib Alert; they often use 1 to 3 leads, rely solely on integrated digital displays, are handheld, and cost between $25 to $500. Dr. Grier at North Dakota State University has compiled an exceptional review of available 1-lead, handheld ECGs on his research page. Most of the 1-lead devices are from China, but some, like AliveCor, are U.S.-based companies. All of them have faced limited adoption among healthcare providers in the U.S., where the incumbent technologies are still used. As a group of physicians evaluating AliveCor stated,

". . . This device has significant limitations in the acute evaluation of chest pain associated with heart attacks. A single lead tracing will miss many real ischemic events, enough that even if it was stone cold normal it would not change our suspicion of myocardial ischemia. If there are significant elevations or depressions, it would probably raise our suspicion for myocardial ischemia, but we would still need a 12 lead ECG, begging the question of how it changes management."

Indeed most of the disruptive handheld ECGs above--at least in the U.S. context--have competed against non-consumption by offering patients and homecare nurses the ability to run ECG tests they could not run before. While additional monitoring increases the risks of false positives, the physicians above also concluded such portable testing could be useful for post-operative heart monitoring during convalescence.


A More Immediately Disruptive Class of ECG From India

India has produced a number of 12-lead handheld ECGs that may be more disruptively positioned than the 1-lead ECGs above, which begin to look like 'hobby devices' in comparison. One of the first major advances was GE's famous MAC India model released in 2007, which brought the price down to $500 from $2,000 - $10,000 for their other hospital-grade ECG machines.

GE's MAC India

In the past 8 years, other Indian companies have released 12-lead ECG devices that achieve greater portability, as well as allow for diverse methods of test data transmission, remote analysis, and storage.

Maestros Mediline launched the E UNO R-10 device in 2010 in partnership with Vodafone. The device relied heavily on Blackberry phones, and was designed mostly for remote consultation use, just as ECGs are in the U.S., except that ECG technicians in India will often travel to administer tests, the results of which are then transmitted to a centralized doctor at a hospital for interpretation. Developers have built applications allowing for use on the Android platform, but the device was not less expensive than GE's MAC India, costing about $500.

Maestro Mediline's E UNO R-10

Lifeplot CCD1 was another offering developed in Pune, India, that does not rely on any specific network or device for transmission of test results, making it potentially more versatile. Though the original model was more expensive at $2,000, LifePlot released a more advanced product just 2 years ago for only $700.

LifePlot UNIQ

The prices for these devices have likely come down, but there are less feature-rich ECG devices appearing in the Indian market from both indigenous and international sources. AliveCor has signed an exclusive agreement with the highly respected Apollo Hospitals chain to use its ECG technology for clinical tests, begging the question about whether the U.S. cardiologists' review of AliveCor's limitations above reflects incumbent biases more than solid clinical rejection, whether something is just better than nothing for India, or whether AliveCor's 1-lead technology has reached a point of relative parity with 12-lead testing. At a price point of $75, perhaps the tradeoff of some marginal performance is worth it.

AliveCor's ECG Device

The appearance of the indigenous Sanket PiE by Agatsa follows past patterns of the introduction of disruptive technology into the Indian market by foreign firms, followed by the release of indigenous versions which may or may not be better-suited for indigenous market conditions. Since Sanket is not yet available on the market, it's not clear what the price will be, but it will presumably be comparable to AliveCor.

Agatsa's Sanket PiE

One of the most immediate differences between the handheld ECGs being widely sold in India vs. those in the U.S. is that they are 12-lead ECGs, while those from Dr. Grier's page are all single-lead devices. This signals a serious disruptive position relative to traditional ECGs in the Indian market, which is a nice illustration of how the context of innovation shapes its ultimate shape. Many elements of the Indian market demand a fully functional, low-cost, handheld ECG: Sheer in-affordability of existing technology for huge numbers of needful patients, the necessity of portability for ambulatory community health workers, and a large supply of IT talent.

Would the U.S. Benefit from Adopting Indian ECG Technology? 

The U.S. market context is much different from that of India, which explains the strategies of handheld ECG devices like AliveCor, Scanadu, and Wello, which--so far--have not competed directly against incumbent technologies, preferring instead to position themselves mostly as patient-centric devices for self-use, providing only supplemental data to traditional provider-based ECG machines. This could still represent the beginnings of disruption, which often incubates in a foothold market that can sustain a nascent technology until it improves to the point of dominance across all or most of the dimensions of quality that matter to customers. At that point, the incumbent technologies quickly fade away. This is the story of transistor radios disrupting vacuum tube radios throughout the 1950s and early 1960s.

However, one of the biggest issues behind lack of serious medical adoption of handheld ECGs in the U.S. is that the alternative processes / delivery models are not yet in place for the use of these machines within provider settings, whereas in a market like India, the new devices are often competing against non-consumption, so in many cases they've had much more 'experience' in serious clinical use. What might the U.S. learn from the delivery models that have emerged around the use of these portable devices?

Adopting leaner delivery models and technology is likely where the real savings lie, but even if the U.S. were to switch over to the equivalent technology available in India today, substantial savings would immediately materialize. Just taking GE's MAC India at a $500 price point, if the average price of an incumbent machine is $2,000, and each of the 7,000 hospitals in the U.S. purchases 5 new ECG machines per year (as benchmarked against the yearly purchases of a UK hospital with 5 sites), this results in over $50 million in yearly savings on equipment costs alone, not including the lead replacement cost, which is also material judging from the UK hospital's spending.


Question for Discussion: 

• What barriers prohibit the U.S. from purchasing lower-cost ECGs for clinical use? 

GE India Could Save U.S. PET/CT Scan Patients $7.5 Billion Per Year

Cancer is abnormal cell growth with the potential to spread to other parts of the body and disrupt normal functions, resulting in illness or death. Claiming over half a million lives per year, cancer is the second leading cause of death in the United States, second only to heart disease. There are over 100 known cancers effecting humans, some being more lethal than others. In all cases, early detection is crucial for improving the chances of successful treatment.

Cancer Cells, from WebMD

Cancer detection typically involves a range of methods and tests but is broken into two stages: Screening and diagnosis. Researchers have provided cancer screening guidelines to encourage regular screenings for potential symptoms of cancer, which differ for each type. Cancer symptoms might include heightened levels of proteins or other byproducts of cancer in the blood, abnormal growths, pain, bleeding, or discoloration of tissue. If potential symptoms appear, the doctor will move towards diagnosis, ordering additional tests to gather more data. These tests can be numerous and costly, and might include PET/CT scans, ultrasound, endoscopy, and MRI for imaging; lab testing on bodily fluids to detect tell-tale biomarkers; and biopsy to collect cell samples for microscopic evaluation by a Pathologist. Using data from these tests, doctors attempt to provide a definitive diagnosis and prognosis to the patient.

Many of the tests above are very expensive, but entrepreneurs in India are working on addressing an enormous and unmet domestic need for early cancer detection through innovative, low-cost product design. For example, GE Healthcare has developed the gorgeous Discovery IQ PET/CT, representing $15 million and 3 years of R&D at its center in Bangalore. Innovating within the constraints of India, they have succeeded in creating a scanner that's 40% more affordable than comparable alternatives, is modular and scalable to allow for price discrimination, offers a unified service of detection, planning, and assessment through state of the art hardware and software, and is a beautiful machine. The cost savings have come from conducting R&D in India, from redesigning a more cost-effective machine from the ground up, and from manufacturing the machine in India.

Discovery IQ PET/CT Scanner, from GE Healthcare

Currently, India only has about 120 PET/CTs operational in the country, whereas the required number of units to adequately address patient demand is over 1,000. Judging from the CEO & President of GE South Asia Terri Bresenham's remarks on Discovery IQ, GE hopes that the price elasticity of demand for PET/CT scanners in India is flexible enough that a 40% price reduction will help to fill this gap. I hope so, but it may be that more disruptive technologies like CellMax Life may ultimately be what brings early stage cancer detection to the masses of India.

Even if the Discovery IQ does not realize substantial financial returns or market share gains in India, GE and the world can still benefit tremendously because GE has created a superior, low-cost product. Producing 50-slice equivalent CT speed imaging, the highest PET axial view available on the market, the Q.SUITE platform for improved PET quantitation, and the Q.CLEAR platform for up to 2x image improvement (SNR) + 2x improvement in PET quantitation accuracy, Discovery IQ is a PET/CT that gets the job done. Certainly there are PET/CTs that may perform better on any one of these dimensions, but does it matter? For example, some PET/CTs are now capable of taking 512 slices, but since no meaningful diagnosis accuracy improvement was found from the jump between 64-slice and 128-slice scanners, 64-slice scanners generally make for the best value. In fact, according to Niharika Midha at GlobalData, the PET/CT "Hardware has reached this plateau . . . There is only so much that can be changed to the machine."

If GE India has tightly engineered Discovery IQ for maximum value (ROI), then this device may sit at the very rim of the performance plateau, including all of the right features, but not overloaded with cutting edge technology and experimental features that price it out value-conscious procurement networks.

GE Logo and Slogan from Inroads

Given that most PET/CTs cost between $2 and $3 million, the 40% price reduction for Discovery IQ puts it between $1.2 and $2.8 million for cost of acquisition. The median prices for CT scans charged by providers hover between $700 and $900, and the U.S. government estimates that 80 million scans are performed annually. The price for PET scans is about $5,000, but only 2 million are performed annually for Oncology diagnostics. Adding these up, approximately $75 billion is spent on PET/CT imaging per year in the U.S.

Of course, only a minor portion of this total spend could be chalked up to equipment cost, so if we instead look at the lowest PET/CT scan costs, and assume the imaging centers offering such low prices are highly efficient so that the overhead and profit margins per procedure are small, we might say that the 40% equipment cost savings generated by Discovery IQ could be passed on rather directly to the end payer. The lowest prices charged for CT scans seem to be around $200, and the lowest for PET scans around $1,200. Reducing these costs by 40% and multiplying by the yearly number of procedures shows a potential costs savings of nearly $7.5 billion per year.

This begs many questions. Could GE keep the cost this low in selling to PET/CT providers in the U.S.? If not, how much of the 40% cost saving be eaten up, and by what? Would GE even want to disrupt their home PET/CT market by importing Discovery IQ? Certainly short-term financial analysts held captive by Wall Streets valuation process would balk, as would the sales force taking lower per sale commissions. On the other hand, volume can make up for decreased unit margins, and such a move may gain GE significant additional market share. Also, the modularity of Discovery IQ might result in natural price discrimination, where the highest-end clients are able to pay for additional functionality, and could widen the base of the market by making a basic PET/CT available to clinics previously unable to afford one.


What Do You Think?

• Should GE disrupt themselves by importing and commercializing Discovery IQ in the U.S.? If so, what main barriers would they face? 

A Brief Intellectual History of Globalhealth.care

The Inception

Excellent Ukrainian Bread

The idea for this project began to form during my time in Eastern Ukraine from 2003-2005. In many cases I discovered that Ukrainians' way of doing things was better than what I had known before. "Better" is always a word needing qualification, and the qualifier differs in each case. Take Ukrainian bread: It's better than the pre-sliced bread from grocery stores I was used to on dimensions of taste, nutrition, and texture; on the other hand, it was worse on dimensions of shelf life, tidiness (crumbs would fly upon slicing), and even PPP cost.

The insight for me was that societies have comparative strengths and weaknesses developed over time in response to conditions on the ground. This goes far beyond food, which after all is largely a matter of taste and habit, and into the ways in which societies organize themselves economically in general.


A Theory

The next piece of understanding was learning Clay Christensen's theories of innovation. I read all of his books and most of his articles as a consultant at Innosight from 2009-2011. Innosight, a firm co-founded by Christensen, helps mostly large corporate clients navigate the challenges and opportunities of disruption in their markets. Clay's theories deepened my interest in the mechanisms of successful innovations, which go far beyond isolated technological advances to encompass new systems and models for delivering value in more cost-effective, accessible, and targeted ways. Large scale disruptive innovations succeed over time and are often generated within tight resource constraints. For example, consider many of the disruptive innovations that Japan was exporting to the U.S. starting in the late 1950s:

• The Honda Super Cub motorcycle
• Sony's hand-held transistor radios
• Toyota and Honda cars

Each of these innovations eventually created a robust market in the United States by targeting consumers that had been over-served by incumbent technologies. Relative to the 'jobs to be done' of these consumers, the product characteristics of physical smallness, efficiency, and low cost were all attractive. Importantly, however, these products were not created in the United States: They were originally of, by, and for the Japanese market, where conditions on the ground differed markedly from those in the United States. Products initially created for obvious markets in Japan would eventually create much larger, though initially less obvious, markets in the United States. This happened dramatically and repeatedly from the 1950s through the 1980s.


Globalhealth.care

During my time at Harvard Business School I read Vijay Govindarajan's Reverse Innovation, which argues that innovations developed for consumers at the bottom of the global economic pyramid, i.e. the roughly 2.5 billion people living on less than $2 per day, share qualities similar to those that characterized Japanese disruptive products starting in the 1950s; namely, they are low-cost and low-performance relative to incumbent technologies, but they succeed because they're mostly targeting non-consumption and under-consumption. Here are just a few examples of these disruptive products from the Innovations Database page of this website:

• $2K heart surgery at Narayana Health
• $30 eye surgery at Aravind Eye Hospitals
• Portable, $500 ECG from General Electric

Many commentators on the healthcare industry in the United States have called for various avenues of disruption to the industry, which would broaden access, lower costs, and improve outcomes. Though the barriers to disrupting healthcare in the U.S. are many, I believe adopting new, disruptive models of delivery inspired directly by successful innovations from the highly constrained markets of the world is one route that will greatly help. Globalhealth.care, then, is a research project hoping to aid the transfer of these innovations, and thus aid the continuing betterment of the U.S. healthcare system.