Reverse Innovation in Health Care: How to Make Value-Based Delivery Work
Vijay Govindarajan and Ravi Ramamurti
Harvard Business Review Press (July 2018)

“Be the change that you wish to see in the world” Mohandas Gandhi

In Reverse Innovation (2012), Vijay Govindarajan and Chris Trimble explain a process by which business leaders can identify the significant differences between rich-country and poor-country needs. “Reverse innovation does not begin with inventing, but with forgetting. You must let go of what you’ve learned, what you’ve seen, and what has brought you your greatest successes. You must let go of the dominant logic that has served you well in rich countries. If you want to use today’s science and technology to address unmet needs in the developing world, then you must start with humility and curiosity.” That is to say, reverse innovation can help to reverse the negative trends and tendencies that can weaken an organization.

What are the core principles of value-based health care as practiced in India? According to Vijay Govindarajan and Ravi Ramamurti, there are five:

1. A driving purpose: care for all
2. A hub-and-spoke configuration
3. An enthusiastic use of technology
4. Task-shifting and continuous process improvement
5. A culture of ultra-cost-consciousness

Govindarajan and Ramamurti note several correlations between these core principles and principles of value-based competition offered by Michael Porter and Elizabeth Olmstead Teisberg in Redefining Health Care: Creating Value-Based Competition on Results (2006):

o Players should focus on creating value fort patients, not just lowering costs.
o Competition should center on medical conditions over the full cycle of care.
o High quality care should be less costly
o Value should be driven by provider experience, scale, and learning at the medical-condition level.
o Innovation that increases value should be strongly rewarded.

Most of those who are thinking about purchasing this book are probablky curious to know what happens when a health care organization attempts to replace its status quo with value-based health care as practiced in India. Govindarajan and Ramamurti include several lessons to be learned from each of these four organizations:

Health City Caman Islands (HCCI) Pages 119-121
Sample Lesson: Be frugal in capital expenditures and in variable costs.

University of Mississippi Medical Center (UMMC) (144-146)
Sample Lesson: Create a demand-driven network shaped by grassroots speed.

Ascension Health (166-168)
Sample Lesson: Use scale not just for market power but also to dramatically lower costs.

Iora Health (188-190)

Sample Lesson: Have a “social heart” but couple it with a “business brain.”

It is worthy of note that years ago, after days of negotiation facilitated by then President Jimmy Carter at Camp David, President Anwar Sadat of Egypt and Prime Minister Menachem Begin reached several agreements. At a press conference later, they were asked how, after centuries of savage bloodshed, they could reach these peace accords. Begin replied, “We did what all wise men do. We began at the end.” That in essence is what reverse engineering is all about.

Govindarajan and Ramamurti are well aware that no two health care service areas are exactly the same in terms of need, capacity, demographics, and resources. And the same is true of health care organizations within those areas. They fully recognize and understand cultural values and sensitives that must be taken into full account. They also realize that the competitive marketplace is more volatile, more uncertain, more complex, and more ambiguous than ever before. All that said, the fact remains that world class health really care can be delivered affordably.

I highly recommend this book to directors and administrators of all health care organizations as well as to all federal, state, county, and municipal officials who are involved in oversight and/or funding of those organizations. The process is reverse innovation and in this book Vijay Govindarajan and Ravi Ramamurti explain HOW. I’m certain that the material they provide in this book will help to save thousands of lives as well as billions of dollars all over the world.

Bravo!