Babylon Health, founded in the UK but now increasingly focused on global markets including the US, is to scale back in its home market.
Two major NHS contracts with the digital healthcare company – which listed on the New York Stock Exchange last year in a SPAC merger – are to come to an end, as reported by the Health Service Journal.
Early in 2020 it agreed a 10-year partnership with the Royal Wolverhampton NHS Trust, while it inked a deal with University Hospitals Birmingham NHS Foundation Trust in 2019.
Babylon said it will work with the RWT to continue to serve the approximately 7,000 patients signed up to its Babylon 360 service until it finds a new digital provider.
The UHB, meanwhile, took the decision itself to end its virtual triage for A&E contract with Babylon in October.
Babylon’s general manager for the UK, Tim Rideout, told TechCrunch that an NHS decision to prioritise 111 – a web- and phone-based symptom checker for advice on urgent medical concerns – had led to the latter decision.
On RWT, Rideout said: “We entered into an agreement with [the Trust] that would start with improving performance of primary care as a way of reducing secondary care costs — because, effectively, if you’re got a really good primary care service the evidence is really good that downstream costs reduce.
“But — I think you’ll see this across the NHS with a lot of different private companies now — the economics of the contract were really tight because of the funding pressures that the NHS is under… it’s [also] becoming more expensive to raise capital for development.
“We reviewed the position a few months ago and what we concluded was it just wasn’t economically viable for us to continue with the partnership.”
He said Babylon would not halt its ‘GP at Hand’ telehealth primary care service in London, which has registered around 115,000 patients, but would not look to expand this provision in the UK.
“If you look at the percentage of GDP that’s spent on healthcare, in the run up to 2010 that was increasing — getting toward Western averages — and then since 2010 it’s diminished,” explained Rideout.
“Year-on-year the levels of UK funding compare, every year, less favourably with some of those other countries. The payer systems are [also] very different. I think the UK system has innate economic challenges hard-wired into it.”
Last month Babylon, which has lost more than 90% of its market cap since floating in 2021, announced cost-cutting measures of $100 million for Q3.
However it has now announced year-on-year revenue growth of 460% for Q2, to $265.4m, as its US members grew by 220%.
Loss for the period totalled $157.1m, compared to loss for the period of $64.9m in Q2 2021.
“Babylon has once again delivered very strong results that demonstrate our continued momentum,” said Ali Parsa, CEO and founder. “Almost all our key metrics are performing well.
“I am truly thankful to all Babylonians for their hard work and unwavering commitment to our mission, and to our members, providers and investors for the continued trust and support.”