The pneumonia 'finger clip' device and better diagnostic tests could save thousands of lives, researchers said.
Routinely used in hospitals, pulse oximetry is a non-invasive technology that measures oxygen in the blood, and can help doctors diagnose conditions such as pneumonia which trigger low oxygen levels.
However, the device - which is around the size of a large mobile phone and can be battery-operated - is not routinely available in community settings.
Researchers at Imperial College London argue that if pulse oximetry was made more widely available in the community, it could allow children to be diagnosed quicker and sent to hospital for life-saving oxygen and antibiotics.
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"This is a very simple tool that could have a very big impact," said Azra Ghani from Imperial's School of Public Health.
The researchers used mathematical modeling to predict the impact of new diagnostic tools across a range of infectious diseases that affect developing world countries.
For example, current diagnostic tests for malaria involve just a blood finger-prick and can therefore be used to identify those carrying the malaria parasite.
The researchers show, however, that they currently only identify around half of those that are infected and may go on to infect others.
A relatively simple improvement in these tests to detect a 10-fold lower density of parasites in the blood could increase this to over 80 per cent.
This would increase the chance that the disease could be eliminated and also reduce the number of years that it takes to eliminate malaria.
"Developing effective tests to diagnose disease is critical to guide use of other interventions - such as drugs and vaccines," said Ghani.
"They therefore have the potential to save lives by directing resources to those most in need," she said.
The findings were published in the journal Nature.