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Babylon Health faces downfall

GP at Hand provider once hailed by Matt Hancock looking to sell UK business after merger plans collapse

Babylon Health, which runs the controversial GP at Hand smartphone service, is looking to sell its UK business, in the hope it can save itself from going into administration.

The company confirmed earlier this week (7 August 2023) that its intended merger with digital health company Mindmaze would not proceed, and Babylon Health is now exploring “new strategic alternatives in order to find the best possible outcome for its UK business”, according to a company statement.

“Babylon remains focused on continuing the day-to-day operations of its UK business, providing accessibility of its healthcare services and the highest standards of care for its patients and members,” the statement said.

“The group is pursuing the divestiture of its UK business to third parties that may provide financing to assure the continuity of the operations.”

Babylon Health was started by Ali Parsa in 2013, and in 2017 its smartphone app, GP at Hand, was founded. The app’s GP service is funded by the NHS and run by NHS Hammersmith and Fulham Clinical Commissioning Group, together with NHS England.

The app, which is essentially an online GP practice, has more than 100,000 registered NHS patients. It shot to success after then health secretary Matt Hancock sang its praises during a speech in 2018, where he called the app the future of healthcare, saying it was paving the way for other technology companies and that he wanted to help expand GP at Hand.

In 2018, Babylon Health also invested £75m to build next-generation artificial intelligence (AI) healthcare technologies, and over the following years, it continued to grow both across the UK and the US, where it listed on the stock exchange in 2021. However, in May 2023, shares in Babylon Health fell drastically, as it announced a funding agreement with Albacore Capital, which would spend almost £30m to provide liquidity to the company.

Read more about Babylon Health

  • Digital healthcare provider Babylon has opened up about the work it is doing with the Google Cloud team, as it grapples with trying to meet the infrastructure needs of its rapidly growing business.
  • A small number of users of Babylon’s GP at Hand service were briefly able to view other patients’ video GP consultations thanks to a bug in a new software feature.
  • Health secretary Matt Hancock says GP at Hand helps deliver a better service and that he wants to help the app expand across the country, as he highlights importance of embracing technology.

In July 2023, the company was delisted from the New York Stock Exchange, and Babylon said in its statement that it “cannot provide assurance that it will be able to secure sufficient liquidity to fund the operations of the group’s business”.

It has already made the decision to exit its “core US business and plans to safely transition its US members to other providers”, the statement said.

Should it not be able to sell its business, it will have to file for administration, both in the UK and the US, which would likely mean the end for its GP at Hand service.

The service itself has been surrounded by controversy. In 2019, Hammersmith and Fulham MP Andy Slaughter wrote to the Health and Social Care Committee citing concerns over the app, including the software’s robustness and its ability to deal with the range of conditions it proposed to diagnose and treat.

Slaughter said Babylon had created an “inverted pyramid” structure in which the tool is competing with GPs, and that there is no indication GPs and the NHS welcome such digitisation. He added that the app’s growth had created a funding problem for the CCG.

In 2020, Babylon notified regulators of a “minor data breach” after users found they were able to view the consultations of other service users in the app.

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