“Future of NHS” Babylon Health Shutters

Babylon Health has gone belly-up, dealing yet another major blow to the UK’s National Health Service.

What’s happening: The AI-powered telemedicine provider has shut down in the US and is selling off its UK business.

Once valued at over $4B, Babylon’s collapse follows Q1 2023 net losses of $63.2M (doubled from the previous year) and a share price drop of $272.50 in 2021 to $0.77 following a failed rescue merger with healthtech unicorn MindMaze.

Uncertain future. Having quit several NHS contracts in 2022 (one ending eight years early), Babylon Health announced it is “pursuing the divestiture of its UK business” which may “assure the continuity of the operations”.

Controversially endorsed by UK health secretary Matt Hancock, who positioned the healthtech startup as the “future of the NHS”, its saleable assets include:

• A contract with private healthcare provider Bupa covering ~2M people
• GP at Hand, a telehealth platform connecting ~100K NHS patients and doctors via app or five London-area clinics
• A symptom checker and chatbot for triaging patients
• The Meritage Medical Network, an independent physicians association

Why it matters: With an ageing population, spiralling chronic disease, a mental health crisis, a costly ~£1B doctor’s strike and waiting lists hitting a record 7.5M, the strain on the NHS is reaching a crescendo.

Having delivered ~1M telehealth appointments from October 2021–October 2022, Babylon Health’s demise will impact the NHS’s ambitious virtual care expansion plans:

• Cutting ~70% face-to-face appointments by one-third
• 10K NHS patients per day to be on ‘virtual wards’ by autumn
• 30M fewer trips to hospital, saving a whopping ~£1B
• Increasing 31M NHS app sign-ups to 75% of adults by March 2024

Competitor HealthHero (which owns Doctorlink), or home healthcare platform Cera, which deals with 20K patients a day, are rumoured to be interested as potential buyers. Other players or possible contenders include virtual GP consultation and physiotherapy provider Teladoc and virtual ward provider Huma.

Takeaway: The UK’s health expenditure reached £217B in 2021/2022, and a shortfall of ~£7B is predicted for 2023. Adopted even before the pandemic, telehealth services have become integral to the NHS’s survival strategy – meaning Babylon Health’s sudden exit could prove even more costly for Brits in need of care unless someone is willing to pick up the pieces.