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10 June 2019updated 25 Jul 2021 3:04pm

“A license to print money“: how AI created a £26m deficit for one NHS group

By Jonny Ball

On a busy road in Fulham, West London, between the Pizza Go-Go and the A-Z Wine Mart, stands England’s fastest-growing GP surgery. In April 2017, the Lillie Road Medical Centre had 2,500 patients – well below the average for an English GP practice. The surgery now caters for almost 50,000 patients, a 1,900 per cent increase in little over two years. But the rise in patient numbers isn’t down to mass migration into the local area. Lillie Road Medical Centre has become the hub for an AI-powered app, Babylon GP at Hand, and anyone working in central London or within 40 minutes’ travel of a GP at Hand centre can register, making them technically a patient of the Lillie Road surgery.

While the app serves patients remotely, the NHS allocates funding to GP practices based on the number of patients registered. So, while the vast majority of GP at Hand patients do not visit the surgery, this huge influx of patients has led to funding pressure for which the local Clinical Commissioning Group (CCG) has not been prepared. The local MP, Andy Slaughter, claims that the arrival of GP at Hand has created a funding deficit for the Hammersmith and Fulham CCG.

The GP at Hand app offers users an AI-powered chatbot service, which uses machine learning to give medical advice, as well as connecting patients to real doctors through video and telephone consultations. It has won plaudits from the Health Secretary, Matt Hancock, who is himself an enthusiastic user of the service. Hancock told the Telegraph last year that he wanted GP at Hand to be made “available to all, not based on their postcode”.

But for Hammersmith and Fulham’s CCG, which encompasses the Lillie Road Medical Centre, the influx of the GP at Hand patient list – less than ten per cent of whom live in the CCG’s catchment area – has created a significant accounting problem. A letter sent by Slaughter to the Health and Social Care Select Committee last month put the funding deficit created by the sudden spike in patient numbers at “at least £26 million”.

The funding deficit has been created by an unwillingness on the part of other NHS CCGs to pay for GP at Hand patients to “move” to the Lillie Road practice. GPs are funded according to the number of patients they have registered. Under normal circumstances, a shift in the number of patients from one CCG to another would result in a change in the funding allocated to each. But the skyrocketing number of app users listed at Lillie Road Medical Centre has led other CCGs to question whether they should transfer 50,000 patients’ worth of funding out of their own budgets for patients who still live within their catchment areas.

“That money should eventually come to Hammersmith,” says Slaughter, who has been the Labour MP for Hammersmith since 2010. “But at the moment,” he continues,  “the other CCGs are refusing to passport money because they’re saying they’re not sure it is all being done fairly.”

This sense of unfairness comes from the type of patients that are using GP at Hand. A recent independent evaluation of the app, prepared by Ipsos MORI for NHS England, reported that users of the app were “younger and potentially more affluent than patients at the average practice in London and nationally.” Some 94 per cent of Babylon GP at Hand patients were found to be under the age of 45 and were described as “predominantly city sophisticates” and “career climbers”. Patients using the app were “healthier than those at other practices in the CCG, even after adjusting for age”, and the evaluation concluded that the service was “not being used by large numbers of older people, or large numbers of people with more complex health needs”.

Separate data from the Institute for Fiscal Studies shows that an average 65-year-old costs the NHS two and a half times more than the average 30-year-old. An 85-year-old costs, on average, more than five times as much to treat.

Slaughter says that services aimed at affluent, technologically adept younger patients are “creaming off a particular part of the public who, in terms of their health needs, are the least demanding”. As he sees it, the GP practices these users leave when they join GP at Hand are being deprived of funding that was effectively subsidising the higher costs of caring for older patients with more complex health needs in the same CCG.

“You’re segregating the market,” Slaughter says, “telling GPs to deal with people with very difficult and complex cases that are very demanding of your time and service, and all the people who are on your books, who give you an income, that are relatively straightforward to deal with, they’ll all be taken by a private company who’ll make a profit out of it.” He adds: “It looks like a license to print money.”

A Babylon spokesperson responded that “GP at Hand does not exclude anyone – it is designed to provide high-quality NHS primary medical services for people of all ages, whether in good health or not. If our model became mainstream then a large segment of patients with complex needs could benefit by having access to a GP 24 hours a day.” Furthermore, the spokesperson responded that “Babylon is not taking money from other practices by having younger patients. There is a Carr-Hill formula that is the basis for how NHS GP clinics are funded. It weights payments by age and gender, as well as other factors so that practices are paid depending on who registers with them.” Overall, they argued, Babylon expects “GP at Hand to reduce the costs on the overall NHS because fast access every hour of every day means that fewer people go to A&E and don’t face delays to diagnosis and treatment.”

What is certain is that, with a deficit running into the tens of millions, Hammersmith and Fulham CCG cannot afford the sudden change in funding allocation that the arrival of AI has brought with it. The group is already struggling with cuts to frontline services, including out of hours GP visits, radiology, cardiology, gynaecology and dementia support, following budget cuts of £8m last year and £11m this year, according to Slaughter. The group has applied directly to NHS England for financial help, but no guarantees have yet been given.

At an event at Babylon’s offices last September, attended by Matt Hancock, the company’s CEO, Ali Parsa, announced a $100m expansion of its UK operation. Slaughter worries that if Babylon expands its services without more consideration of existing NHS structures, more CCGs will find themselves struggling to account for the changes AI brings. “Babylon could have paired up with lots of GPs around the country and had lots of local Babylon GP at Hand stations,” he reflects. “But it’s all run from one particular address in Fulham, for accounting and management purposes. They’ve been asked about this and they just say it’s what suits them, it’s within the rules, and therefore the NHS will have to adapt.”

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