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Why Babylon is scaling back its ambitions in the UK

Though increasingly popular with its cohort of younger patients, Babylon’s digital-first strategy appears to be in trouble.

By Polly Bindman

“Quickly and with less bureaucracy” is how entrepreneur and Babylon CEO Ali Parsa has described the digital healthcare provider’s business model.

Since Babylon’s inception in 2013, the allure of bypassing endless NHS waiting lists and gaining fast access to digital (and occasionally in-person) GP consultations has attracted over 111,000 patients to the company’s digital practice GP at Hand, making it the largest GP surgery in Britain.

As a technological disruptor, Babylon’s GP at Hand differs from other surgeries, both in its digital-first approach – which uses an “AI-Powered Symptom Checker” to analyse symptoms – and the demographic it caters to. As of July this year, the vast majority of patients registered with GP At Hand — 86 per cent — are under 40 years old, while just 1.5 per cent are over 60, according to Spotlight’s analysis of NHS Digital data. In contrast, the average proportion of over-60s registered to a practice in England is roughly 23 per cent.

Concerns that Babylon "cherry-picks" younger, healthier patients with its digital offerings are at the root of a series of controversies that have plagued the service since its inception: namely, that the "move fast, break things" culture of Silicon Valley undermines an NHS model predicated on safety and equality.

In addition to concerns around the service’s AI symptom checker (in 2018, medical professionals disputed Babylon’s claim that its AI chatbot scored higher than GPs at a medical exam), campaigners have criticised the app’s financial model, where the influx of out-of-area patients registered to the surgery's main practice in Hammersmith and Fulham led to a funding gap of £21.6m in 2019, since footed by NHS England. Other health service providers argued that the service was "cherry-picking" younger, fitter patients while leaving the burden of more complex patients to other surgeries.

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Since November 2018, Babylon is no longer prohibited by NHS England from catering to "less appropriate" patients, including the frail and elderly, and in 2019, the funding structure was altered, with the practice broken up into 17 separate contracts, each commissioned by different CCGs.

Babylon denies it "cherry-picks" patients, with a spokesperson telling Spotlight that its registration "is open to everyone and is entirely at the patient's choice". They add that Babylon now offers a "Care Coordination team" to those with greater needs. In terms of funding, “we are paid like every other NHS GP practice”, through a Carr-Hill formula that “weights payments by age, gender and health so that practices are paid depending on who registers with them”.

Since the pandemic, concerns about the service’s impact on the NHS have somewhat dwindled, partly because its strategy of appealing to younger, tech-savvy patients appears to be backfiring. Babylon tells Spotlight that while "it’s not surprising" that younger people, who are early adopters of technology "have chosen to join Babylon at a faster rate than those over 60", due to its younger cohort it receives "approximately 40 per cent less funding per patient than the national average", while offering "around three times the contracted hours".

This is taking its toll on the business: just three months ago, Parsa was forced to admit it was cautious of further expansion in the UK, due to losing money "on every member that comes in". Speaking to investors, Parsa said the company is "overwhelmed with demand", as while the UK government "pays you to look after people in our [average] age cohort two to three times a year…in reality people use us six or seven times a year".

Earlier this month Babylon confirmed it had prematurely ended a 10-year contract with the Royal Wolverhampton NHS Trust (RWT) that had been drawn up to provide a new model for integrated care. A spokesperson for the company said: "RWT and Babylon have made a mutual decision to end our partnership, as it is not economically viable for Babylon in the current climate.”

While the company is expanding to markets including China and the US, its share price has plummeted since its October 2021 IPO on the New York Stock Exchange, from $10 to $1 in June 2022, with Parsa attributing its damp success to the withdrawal of major investors from technology stocks.

Jackie Applebee, chair of doctors in Unite and a GP in Tower Hamlets, who led the initial campaign against the service’s expansion, tells Spotlight that “the pandemic has largely made [the service] irrelevant”. With “the advent of a plethora of platforms at the beginning of the pandemic, all General Practices have access to technology that enables us to offer…younger, less complex and more tech-savvy” patients “remote access and messaging”.

While the disruptive, easy-to-access service is still clearly appealing to many younger patients, its ability to compete with more traditional NHS services in the long-run looks increasingly uncertain.

[See also: The cost-of-living crisis is pricing people out of breathing]

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