Disruptive innovation in healthcare sector offers potential opportunities to developing countries like Nigeria, which are in urgent need of low-cost, efficient and sustainable healthcare solutions that are easily accessible to the masses.

1. | The Global ANALYST || April 2019 |48
Disruptive innovation in healthcare sector offers potential opportunities to developing countries like Nigeria,
which are in urgent need of low-cost, efficient and sustainable healthcare solutions that are easily accessible
to the masses.
I N T E R N A T I O N A L
The Case of Nigeria
Disruptive Innovation and Healthcare
IvoPezzuto
ProfessorofGlobalEconomics
and Disruptive Innovation,
International School of Management, Paris
Image:UNICEF,Canada
N
igerian health industry is used
as an exploratory case study to
examine the feasibility of
implementing Remote Patient Moni-
toring (RPM) systems and the potential
benefits of disruptive innovations in
the healthcare industry for the lower in-
come patients of emerging economies.
This analysis on disruptive innovation,
industry competitiveness, and sustain-
ability of the healthcare models is in-
spired by Michael Porter’s Creating
SharedValue(CSV)strategicframework.
The Nigerian healthcare sector
The Nigerian healthcare sector is cur-
rently experiencing a lot of challenges.
The quality of healthcare is at an all-
time low and the life expectancy is ap-
proximately 55 years, one of the lowest
in Africa (WHO, 2019). Nigeria was
ranked low (140th
position out of 195
countries) in the Global Healthcare
Ranking. The global healthcare ranking
is based on a qualification of personal
access and quality for 195 countries and
territories from 1990 to 2015 (The
Guardian, 2017).
In a study published by The Lancet
on the Healthcare Access and Quality
Index, out of the 32 diseases for which
death rates were tracked—which in-
clude tuberculosis and other respira-
tory infections; illnesses that can be

2. | The Global ANALYST | 49| April 2019 |
prevented with vaccines (diphtheria,
whooping cough, tetanus and measles);
and several forms of treatable cancer
and heart disease and maternal and
neonatal disorders—Nigeria lagged far
behind most other African countries
(The Guardian, 2017).
The result of The Lancet study
showed that while many countries im-
proved over the period of observation,
many, especially, in Africa and Oceania,
fell further behind in providing basic
care for their citizens (The Guardian,
2017).
The state of healthcare delivery in
Nigeria seems appalling and there has
been too much national lamentation for
too long concerning the country’s poor
health infrastructure, poor remunera-
tion for doctors, inadequate adminis-
tration, and insufficient government
funding. Nigeria has some of the best
medical doctors and health practitio-
ners in the world, but unfortunately, it
seems that most of those highly edu-
cated and talented medical profession-
als are out in foreign countries excelling
where the conditions and atmosphere
are more favorable. Nigerians, who can
afford it, continue to flock to foreign
countries to seek medical help, while
the poor are left with no option than to
seek low-quality healthcare services
provided at national level (The Guard-
ian, 2017).
What is disruptive innovation?
The term disruptive innovation is fre-
quently associated with the theoretical
framework introduced by Clayton
Christensen in 1995, which has been
widely referred to as one of the most in-
fluential business ideas of the 21st
cen-
tury. Christensen defined disruptive in-
novation as an innovation that targets
a new market or the low end of the mar-
ket, thus creating a new value network,
which gains a foothold in the target
markets and eventually grows and im-
proves over time (typically through a
process of technological upgrading) un-
til it eventually displaces well-estab-
lished leading firms of the market and
their products or service (Christensen et
al., 2015). Christensen’s most used il-
lustration of this theoretical framework
is represented by the impact of the dis-
ruptive advent of the personal comput-
ers on the Mainframe computers indus-
try. The large mainframe computers
were originally massive in size and not
so user-friendly and very expensive and
therefore only available to a few. The
emergence of the personal computer, re-
placing the mainframes, has disrupted
the computer market, being very low
priced, user-friendly, and now owned by
most individuals and firms. In today’s
era of digital revolution and 4.0 technol-
ogy transformation, more product cat-
egories and industries are constantly
disrupted, thanks to quick, agile, lean,
convenient,andgroundbreaking innova-
tions and strategies. For example, tab-
lets, latest mobile devices and app-
based services, and advanced techno-
logical solutions based on big data, ma-
chine learning, deep learning, IoT, vir-
tual and augmented reality, cognitive
computing systems, multisensory in-
terfaces, and AI-based technologies are
completely redefining the perimeter of
entire industries, disintermediating
distribution channels, often driving to
industry convergence, disrupting indus-
tries’ incumbents, and creating new di-
mensions of customer experiences, cus-
tomer expectations, mass customiza-
tion, and interaction with customers
and value networks through social me-
dia, communities of experts, open inno-
vation models, and digital transforma-
tion models. In the mobile era,
smartphones and tablets, for example,
are becoming devices of disruption of
traditional personal computers and
traditional firms’ business models
based on the “brick and mortar” distri-
bution of products and services; on the
traditional concept of product owner-
ship versus access and use of shared re-
sources; on the concept of sustainability
and the ecological impact of resource
utilization; or on the individual use of
products and services versus the online
and real-time need to share personal
digital and physical in-store experi-
ences with other members of a digital
community and with the surrounding
environment (i.e., IoT devices, multi-
sensory interfaces, and AI-based tech-
nologies).
Disruptive versus sustaining
innovation in healthcare
Disruptive innovation has erupted in
almost all industries including media,
telecom, finance, retail. New technolo-
gies, new business models and competi-
tion have given rise to more affordable,
BurgeoningPopulation
NigeriaCouldHavetheWorld’sThirdLargestPopulationby2050
Source:UnitedNationsPopulationStatistics,2017
Disruptive Innovation and Healthcare

3. | The Global ANALYST || April 2019 |50
easy-to-use, and accessible products
and disintermediation of the distribu-
tion channels. This has not been the
case for many years in the healthcare
industry globally. More recently, as
technology advances in healthcare,
there has been in many countries a
steady rise in the cost of healthcare.
Traditional players in the healthcare
industry have been engaging mostly in
sustaining innovation, investing more
in making more sophisticated and ex-
pensive products for their best custom-
ers, although in recent times major de-
velopments and disruptive business
models have been experimented by
highly innovative startups and giant
tech companies in the USA, China, and
other leading nations in the technologi-
cal innovation. Healthcare has there-
fore become quite expensive and not
easily accessible in many geographical
areas of the world, and thus it is in ur-
gent need of disruptive innovation and
is said to be ripe for disruption. Accord-
ing to Christensen et al. (Christensen,
2017), high costs and uneven levels of
access are typical hallmarks for an in-
dustry that is ripe for disruption. This
article therefore seeks to examine ways
in which the healthcare industry can be
disrupted in a developing country using
the case of Nigeria.
Christensen et al., (Christensen,
2017) further argue that the health in-
dustry needs to have courage to inno-
vate their business models, breaking
away from traditional sustaining inno-
vation models to a more value-based
model, accepting short-term financial
risk in exchange for long-term success.
Also, promoting disruption in
healthcare gives better value at low
cost, promoting customer satisfaction,
profitability for long-term business suc-
cess and overall, leading to a better
quality of life for the general population
in the form of lower mortality rates, in-
fant mortality rates, and premature
deaths from stroke and heart failure,
and so on.
Why Nigeria? – Environmental
analysis
Nigeria is a so-called “emerging mar-
ket” of the African continent which has
experienced in the last decade rapid
population growth, rapid urbanization,
growth in the middle class, increasing
foreign direct investments and rela-
tively stable political environment. Ni-
geria has been identified as a regional
power in Africa, with one of the stron-
gest economies in the region, and it is
expected to become one of the world’s
top 20 economies by 2050. (World Bank,
2016). Nigeria is still a promising
economy, although currently (early
2019) it is in the middle of a transition
phase of slower economic growth and it
seems to be facing a number of social,
economic, institutional, and political
challenges. In fact, Africa’s most popu-
lated country with approximately 190
million of inhabitants (51.0% of the
population is urban and the median age
in Nigeria is 17.9 years), according to
recent demographic trends projections,
is expected to become the third most
populous country in the world by 2050
(IMF, 2018).
Based on the historical track record
of economic growth (10-year average an-
nual GDP growth of 4.8 %), the country
seems to have a solid potential for fur-
ther robust economic development in
the future. Yet, in recent years, its
economy has been negatively affected
by falling oil prices and probably by
some policy errors, which have led to
declining gross domestic product per
capita. Yet, even in the future, the coun-
try is likely to face important
sustainability challenges if the lack of
reforms and institutional fragilities
continue to undermine its potential
bright growth prospects.
Given below are some key figures
about the country’s economic and social
conditions as of 2018, based on indica-
tors of the World Economic Forum 2018
Global Competitiveness Index: Envi-
ronmental footprint expressed in global
hectare/capita (gha/capita) is 1.1; Inclu-
sive Development Index 1-7 (best) is
3.1; Global Gender Gap Index 0-1 (gen-
der parity) is 0.6; Income Gini 0 (perfect
equality) -100 (perfect inequality) is 43
(WEF, 2018).
Furthermore, widespread corrup-
tion and the absence of peace and secu-
rity in many regions also represent
challenges to economic growth, prosper-
ity and the effort to eradicate extreme
poverty in the country, as well as the
need to improve basic infrastructures
for development and to attract Foreign
Direct Investment (FDI). Nigeria is still
a country largely dependent on the oil
industry. Oil sector contribution to
Nigeria’s Gross Domestic Product
(GDP) in 2018 was approximately 10%
of total real GDP and well over 80% of
Nigeria’s total exports. Nigeria, the eco-
TelehealthandItsComponents
Source:IngeniumTelehealthBusinessPlan(2017)
International

4. | The Global ANALYST | 51| April 2019 |
nomic and commercial hub of West Af-
rica, is the second largest African export
market. Diversification from oil depen-
dency is certainly necessary and inevi-
table, although it remains still an un-
certain and challenging scenario given
the productivity issues in the country,
low and falling government revenues,
and the need for more infrastructural
investments (Nairametrics, 2018).
Disruptive innovation in
healthcare and the role of
telemedicine
It is widely accepted that innovation in
health care is the key to transformation
in the sector. Innovation will contribute
significantly to lowering cost, growth,
and improving the quality of healthcare
delivery. Disruptive innovation might
offer low-cost solutions that would be
easily accessible and simple to use tar-
geting the low end of the market. A dis-
ruptive innovation in healthcare in low-
income countries can make a huge im-
pact on meeting the needs of a huge
number of the population, as these re-
gions have a high number of low-income
earners. Nigeria needs low-cost
healthcare solutions that will be easily
accessible to the masses. New techno-
logical innovations in healthcare can of-
fer huge opportunities for transforming
lives, but these technologies must be
low-cost in order to be feasible and
implementable in developing nations.
Telemedicine has been highlighted
as a very effective low-cost technological
innovation that offers huge opportuni-
ties for developing nations, including Ni-
geria. Telemedicine is generally defined
as the provision of healthcare through a
combination of telecommunications and
multimedia technologies with medical
expertise and thus includes the use of
computer technologies, remote sensing
and monitoring, and telemetry devices
(Pereira, 2017). Telehealth supports the
delivery of healthcare, public health, and
health education services at a distance,
as well as provides a collaboratory plat-
form for sharing knowledge and exper-
tise and engaging communities in par-
ticipatory research.
Telemedicine can be a workable so-
lution to the shortfall in skilled medical
specialists and limited access to qual-
ity healthcare in rural areas through
provision of services such as digital
health, video consultations, remote pa-
tient monitoring. The rapid advance-
ment in telecommunications in the Af-
rican continent has opened up avenues
for improving medical care to
underserved populations. (Sarfo et al.,
2017, Adenuga et al., 2017). Mobile
health (mHealth), a term used for
healthcare delivery via mobile devices,
has gained attention as an innovative
technology for better access to
healthcare and support for performance
of health workers (Lee et al., 2017).
It seems to be a quite likely future
scenario with the rapid expansion of vir-
tual health and telemedicine 4.0; never-
theless, in spite of a potential wave of
groundbreaking disruptive innovations
in emerging and developing markets, it
is also likely that self-service
telehealth apps incorporating artificial
intelligence into the process will remain
a hybrid model, involving some form of
human interaction (Roth, 2018).
Mobile health (mHealth) devices,
consisting of wearable sensors that can
track and transmit to providers in real
time patient parameters ranging from
biochemical measurements to move-
ment and balance, are becoming less
obtrusive and gaining patient accep-
tance. Telemedicine also includes Re-
mote-monitoring devices which allow
patients to connect with telehealth
nurses from their homes or from a com-
munity setting, such as a senior center.
Some systems allow real-time commu-
nication, using videoconferencing, while
others require the patient to use a touch
screen to answer questions.
Telemedicine also includes remote
physical assessment peripherals, such
as pulse oximeters, weight scales,
sphygmomanometers, blood glucose
monitors, medication-tracking equip-
ment, and even “intelligent toilets”
(that collect data on weight, blood pres-
sure, and urine glucose). Finally,
telemedicine involves also personal
health record apps for mobile devices
which not only hold patient-entered in-
formation, such as health history and
medication reminders, but also collect
environmental information on asthma
triggers such as smog or allergens and
monitor respirations, sending alerts of
impending asthma symptoms (Grady,
2019). Telehealth encompasses four
distinct service modalities: Store-and-
Forward; Live and Interactive Video;
Remote Patient Monitoring; and Pa-
tient Engagement Mobile Apps.
1. Store-and-forward (asynchronous) in-
volves the transmission of multime-
dia medical data from one provider to
another for clinical evaluation outside
of a real-time interaction.
2. Live and interactive video (synchro-
nous) involves two-way live audiovi-
sual interaction between a con-
sumer and provider by computer,
phone, or home health monitoring
devices.
3. Remote patient monitoring involves
transfer of personal health and
medical data from a community set-
ting to a remote provider for moni-
toring and providing related sup-
port.
4. Patient engagement mobile apps in-
volve the use of wearable sensors,
smartphone apps, and other mobile
monitoring and communication de-
vices to provide consumers with in-
teractive care education and out-
reach services (TTRN, 2017).
Telemedicine is relatively well es-
tablished in countries such as the
United States and Australia, and there
is a growing interest in it among devel-
oping countries, where problems of
transport and access to healthcare fa-
cilities make telemedicine an attrac-
tive proposition (Chen et al., 2013).
There has been a good number of
telemedicine projects in Africa, most of
them being pilot test or done at a very
small scale.
Main drivers and enabling factors
for RPM business in Nigeria
With the rapid growth of its population,
Africa has also seen an increase in the
chronic disease population, higher de-
mand for home health monitoring and
use of wearable devices, especially
among the middle class in Africa. On the
other hand, Sub-Saharan Africa is fore-
casted to be the fastest growing region in
the world (Deloitte, 2015). Also, there is
Disruptive Innovation and Healthcare

5. | The Global ANALYST || April 2019 |52
Reference # 20M-2019-04-10-01
steady growth in its middle-class popula-
tion and disposable income. Further-
more, Africa, including Nigeria, has seen
increased infrastructural development in
recent times, especially due to increased
foreign direct investment from China and
other nations. In a recent article,
McKinsey & Co. has defined Africa as
“one of the 21st
century’s great growth op-
portunities”(byLeke,Chironga,Desvaux,
2018). There has been increasing techno-
logical development, access to internet,
development of high-quality networks,
use of mobile devices and mobile apps.
Mobile penetration rates in many Sub-
Saharan countries are rapidly getting
closetoexceeding80%andthepopulation
is starting to use mobile phones not only
as basic communication tools but also to
improve and integrate business and ser-
vices (World Bank, 2016).
Furthermore, Sub-Saharan Africa,
in spite of the fact that it has less devel-
oped infrastructures compared to other
areas of the world, can rely on a very
high mobile network coverage (Deloitte,
2015). Improved network coverage, the
launch of 3G—and of 4G—together with
the possibilities provided by Wi-Fi, has
increased mobile connectivity in Sub-
Saharan Africa. Despite a slow start of
broadband penetration (4G) in the
country, Nigeria’s regulator, Nigerian
Communications Commission (NCC),
is planning for the roll-out of 5G net-
works in the country from 2020 onwards
(Shi, 2018). The growth rate of the mo-
bile market in Sub-Saharan Africa is
one of the highest worldwide. Conse-
quently, mobile-cellular penetration
rates are relatively high compared to
other emerging markets as well as
some advanced economies (ITU, 2017).
All these are fundamental factors of the
technological and infrastructural envi-
ronment that might enable RPM busi-
ness to grow and succeed in Nigeria and
other African countries.
Majorpotentialbenefitsandfuture
opportunitiesfromthisvaluedisruptive
innovation
Telemedicine and RPM in Africa have
so far produced positive outcomes such
as improved care, better awareness and
education. These projects, when scaled
up, will lead to an overall strengthening
of the healthcare system, reduction in
diseases and deaths, and improvement
in the general wellbeing of the people.
Areas where significant gains could
be made are explained below:
Cost savings and better health out-
comes: The model will result in
cheaper and better healthcare for both
care providers and patients, through
prevention of readmissions, better
post-treatment care, better preventive
measures and improved follow-up and
monitoring of health conditions. With
more persons being able to access
healthcare, it is expected that overall it
will lead to better health outcomes,
lower mortality rates, including infant
and maternal mortality rates, and in
the long run, to a better quality of life for
the people.
Data collection/transfer and report-
ing: In many African countries, the
quality of health information systems
tends to be poor due to existent infor-
mation systems, data incompleteness,
untimeliness and inadequate analysis.
RPM systems will provide an effective
medium for data collection and storage.
Disease surveillance and interven-
tion monitoring: The burden of rising
diseases in Africa, including chronic,
communicable and non-communicable
diseases, continuously challenges the
already over-stretched health systems.
Improved health monitoring will help
strengthen disease surveillance and
thereby contribute to prompt treatment
and eradication.
Health education: Results of studies
show that RPM solutions can be used as
a platform for education, creating
awareness and training for both medi-
cal and non-medical personnel, pa-
tients, community health workers and
the general public.
Future outlook
Analysts have predicted further disrup-
tion in the global health sector based on
rapid technological advancements such
as big data, artificial intelligence, etc.
For example, heightened awareness on
the ‘big data’ approach to collation and
analysis of health data across world
countries is expected to further bridge
the gap between healthcare delivery,
policy response and population health
outcomes across cities, countries and
continents (Wyber et al., 2015; Adeloye
et al., 2016). It is expected that in-
creased exchange of high quality data
and information within the health sec-
tor will further enhance the use of RPM
and other digital solutions and ulti-
mately enhance overall patients’ care
and improve health workers’ efficiency
in both low- and middle-income coun-
tries. The distributed ledger methodol-
ogy, known as blockchain, is piquing in-
terest in the healthcare industry as or-
ganizations search for more secure and
trusted strategies for managing big
data. Current uses for blockchain have
included the creation of a truly longitu-
dinal health record controlled entirely
by the individual and a more robust pa-
tient matching and identification sys-
tem that improves patient safety. As
awareness and research grows, more
uses of blockchain are expected to be de-
veloped, leading to better exchange ca-
pacities between hospitals, providers
and payers (Mettler, 2016; and
Bresnick, 2017).
Blockchain and its distributed led-
ger technology may give patients more
control of their data; improve reliabil-
ity, security and accuracy of data record-
ing; and help reduce costs. Blockchain-
based electronic health systems may
create significant improvements in
medical records management. Mshali
et al. (2018) highlighted the role of ma-
chine learning in enhancing the effi-
ciency of sensor data analysis in health
monitoring activities. Machine learning
is also giving rise to more sophisticated
image diagnostic tools, helping physi-
cians make more accurate diagnosis
and treatment recommendations.
Other health applications that are
gaining momentum are personalized
medicine and automatic recommenda-
tions. Health recommendations and
disease treatments are tailored based
on their medical history, genetic lin-
eage, past conditions, diet, and stress
levels. Also on the rise are proactive dis-
ease prevention, performance improve-
ment and autonomous robotic surgeries
(Fagella, 2018).
(The author thanks Zoe Uzoezi Osagie,
Research Scholar, ISM, for her contribu-
tions to this article.)
International