An Ultra Low-Cost Hemodialysis System: How will we do it?
Business Model Innovation
The obvious first question is “If this is possible, why hasn’t it been done before?” As Clayton Christensen pointed out in his The Innovator’s Dilemma, established companies are tied to their existing customer base by their strategy (keep/win those customers and prioritize projects they want) and by their cost structure (high overheads and expensive development departments require products with the highest gross margins.) A simpler, ultra low cost dialysis system is not demanded by their current customers and would have far lower gross margins than their current products. It would also soon erode the high margins they are earning in rich markets as the technology migrates up-market.
We will focus on profit per reusable disposable set as our “economic denominator” (as described by Jim Collins in Good to Great.) We will make it possible to dramatically reduce annual treatment costs while still remaining profitable. Contrary to current practice, we will design the system for maximum reuse of the disposable set. If our sets cost $20 but are used 30+ times that is less than $1 per treatment. Revenues per patient will be far lower (which is why established competitors would not pursue this) but this is viable for a small, low-overhead network of entrepreneurs, volunteers and interested organizations.
New Ideas and Appropriate Technology Innovation
As Antoine de Saint-Exupery expressed so well, “Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.” For decades the industry has been competing with new features, more complex treatments and more automated, less labor-intensive monitors. One of Gambro’s top research scientists once told me that for each new function on a dialysis monitor, four or five additional components or systems must be added to make that one new function safe.
There is enormous potential to reduce complexity and cost in the dialysis monitor. Most of the advanced features and functions are not used in the vast majority of treatments and in most cases they do little to improve the outcome for the patient. Often, bespoke or low volume components (pumps, sensors etc.) are used which cost 10-50 times more than similar high-volume components used in the consumer, automotive and industrial markets. Low income countries have generally lower levels of education and less familiarity with technology. They also have lower labor costs and little to no litigation. Their challenges are access to clean water, electricity and primarily money to pay for any treatment.
They need a very inexpensive monitor (less than $1000) that is easy to use and can run on a battery if needed and be operated by the patient or a minimally trained caregiver. Since the monitor is not the major profit driver for the business it can be developed as an “open source” project to reduce the cost and give more people the opportunity to improve the design. It will be manufactured in a low-cost country (probably India or China) and can also be replicated with a royalty-free license in other low income markets.
The disposable set will be designed from the outset for maximum reuse, minimum complexity and minimum risk of infection. Both the monitor and the set will include new technologies that improve the longevity and facilitates cleaning and sterilization. These new technologies may be patentable which may be an incentive for bigger partners to invest in this initiative.
Vascular access (AV fistula or graft, CV catheter) and single use needles are a major obstacle and expense. In the case of the fistula it may also take several months to be viable. We will investigate whether a longer treatment with lower blood flow using a novel, less invasive vascular access methods is viable. I already have several novel ideas which could improve diffusion across the membrane to allow for lower blood flows and another which would assist membrane cleaning.
Dialysis fluid requires clean water which is not always available. We will study alternatives to ensure inexpensive dialysate is available to the clinics and/or homes. Drugs are another cost but some (e.g. unfractionated Heparin) are not patented and others have patents that will soon expire (e.g. erythropoietin stimulating agent (ESA.)) We will look for ways to both reduce the need for drugs and reduce the cost of those drugs. Similarly there may be ways to reduce the cost of laboratory tests required and explore simpler point of care tests or monitor-based sensing that could replace some tests.
Social Power
In low income countries, the large extended family is usually still very strong and it is common for families to contribute towards the cost of dialysis treatment for a family member for as long as they can afford. We can use these strong, existing social forces to supplement or replace expensive and scarce medically trained personnel as well as assist in getting patients to clinics and/or fluids to patients’ homes. They can also help with diet, sterile technique, patient connection and monitor setup/operation.