Babylon Health – inactive

Current situation

Following catastrophic financial issues, by September 2023, Babylon Health had closed all of its US operations and sold all of its UK operations. It is now no longer in operation anywhere in the world.

From 2018 Babylon expanded rapidly into the US market and listed on the New York Stock Exchange in October 2021. By 2022, however, the company had hit serious financial difficulties. A deal for refinancing the company and taking it private again with major creditor AlbaCore Capital and MindMaze Group was announced in May 2023. But by August 2023, this deal had fallen through and Babylon's US operations were put in court-supervised liquidation. The only reason given for the failure of the deal was "unforeseen circumstances."

Babylon put its UK operations into administration and a buyer was sought. By the beginning of September, the administrators had sold the UK operations to a newly set-up subsidiary of eMed, eMed Healthcare UK. Financial terms of the sale were not fully disclosed. The business includes Babylon's telehealth business with companies, including a contract with Bupa.

The sale included GP at Hand (although this was not initially disclosed) and the GP business and these have now been rebranded as eMed GP at Hand.

CEO Ali Parsa had already moved to the US by the time of the collapse of the company. In 2021 he was listed on The Times Rich List, with an estimated £825 million fortune, however The Times reported in October 2023, that this fortune has now evaporated.

Political connections

In an article in The Times on the fall of Babylon, it noted that "Babylon’s deals with the NHS, which saw it receive at least £22 million over the past three years alone and helped it to woo investors, were in part due its links with the Conservative Party and the backing of Hancock, the health secretary from 2018 to 2021."

The article also noted that between 2015 and 2022 Babylon's executives had 17 separate meetings with a total of 19 ministers, including prime ministers Theresa May and Boris Johnson, and during their time at the treasury Philip Hammond and Liz Truss.

Matt Hancock praised Babylon in a supplement the company paid for in the Evening Standard newspaper in 2018. The paper was edited at the time by the former Tory chancellor George Osborne.

The Conservative party received more than £250,000 in donations from individuals and companies with shares in Babylon, including donations to Matt Hancock, who received £10,000 in 2019 to help fund his bid to become party leader.

History

Babylon was founded in 2013 by former investment banker Ali Parsa; until December 2012, Ali Parsa was CEO of Circle Health. Babylon Health’s business focused on the development of digital technology and artificial intelligence (AI) in healthcare. According to Babylon Health's website, its mission was "to transform healthcare for everyone on earth" with the company being founded "with a single purpose: To put an accessible and affordable health service in the hands of every person on earth."

Babylon reported on its website in early 2023 that the company is supporting a global patient network across 15 countries, with 16 languages available.  By 2022, the USA, where it has acquired two companies in late 2021/early 2022, was its primary target.

The company's first smartphone app (an AI chatbot) was launched in February 2015 in the UK and it was also made available in Ireland, Rwanda and the USA. The company expanded in the USA and also had contracts in Saudi Arabia and China.

By asking a series of questions, Babylon's app can answer medical queries and can put the user in-touch (virtually) with a GP. The app is personalised by the use of a dashboard of the users health statistics acquired either by the phone (exercise regime etc.) or via supplemental devices. Babylon will supply users with blood testing kits for liver and kidney function, thyroid function, vitamin levels, bone density, and cholesterol. The results of the tests are then incorporated into the user’s app settings.

In the UK, the company offered a private service via its app; Babylon charged £59 for a one off GP appointment, £48 for an Advanced Nurse Practitioner, £48 for Physiotherapist, £45 Mental health Practitioner and £45 for a Pharmacist. Or an annual £249 could be paid, although this was not for unlimited appointments.

The early years

At its inception, Babylon's primary target in the UK was access to NHS patients. The company began a contract with NHS England for its GP at Hand app in 2015, when it launched the service in London. Thousands of patients registered with the service.

Babylon Health's business in London with GP at Hand boomed from 2015 to 2020. Its future in the UK was boosted in June 2018, with the appointment of Matt Hancock as Health and Social Care secretary. Mr Hancock was very enthusiastic about the use of new digital technology in the NHS and in July 2018 revealed that he was actually a subscriber to GP at Hand and found the service 'brilliant'. Much of Babylon's success in the UK now appears to be due to its funding of the Conservative party (see Political Connections above), which in turn boosted investor interest.

In September 2018, Matt Hancock gave a speech at Babylon's headquarters in which he told an audience of Babylon Healthcare staff he wants to help the company expand “so loads of companies can come do what Babylon are doing” in the NHS. In the same month, HSJ reported that via FOI requests the publication had found that at least 17 CCGs had met or corresponded with Babylon; some CCGs that did not reply to HSJ were known to have been in contact with Babylon or GP at Hand.

Initially, Babylon Health benefited from certain payments available to surgeries that register patients in London and from the rules surrounding the registration of out-of-area patients. These benefits have now gone due to changes in the new five year GP contract announced by NHS England in January 2019. Two changes to payment rules which started 1 April 2019 reduced the company's income. The changes will mean that certain extra payments apply only to patients living in the surgery catchment area and that the London adjustment payment will apply only to patients living in London, rather than those registered to a London-based practice.

However, the most significant change discussed in the GP contract was a review of the out-of-area registration rules. Changes to reduced the number of patients Babylon could register, which had a significant impact on the company's business strategy.

As a result of the consultation, in September 2019 a joint board of NHS England and NHS Improvement published new guidelines for digital-first GP-providers. The changes came into force in April 2020, now when the list of out-of-area patients reaches a certain threshold, Babylon's contract would have had to be split and a new practice list for GP at Hand in another area automatically created with a new CCG contract, where the company would need to provide premises, be part of a local network and meet all service requirements. Babylon had around 60,000 out-of-area patients, who had to be split into 17 different contracts.

For a brief time, a major part of Babylon's UK strategy was expanding the GP at Hand service to other areas of the country.

After London, the company targeted Birmingham for expansion. There were objections, but despite these, NHS England gave the go-ahead for Babylon Health to expand to Birmingham and a launch took place in June 2019. Patients in Birmingham were initially registered at the Fulham practice in London, until the company set up a physical clinic in Birmingham. However, by November 2022, Babylon had abandoned its business here as "financially unsustainable". The company also abandoned its plans to expand to Manchester.

NHS contracts

Babylon worked to expand its business in the NHS, outside of the GP at Hand app, and in January 2020, the company announced a major partnership with the Royal Wolverhampton Trust in the Midlands to create and launch “digital-first integrated care” across the region. The 10-year partnership was to involve the development of technology that will allow patients to access NHS primary, secondary and community healthcare services through a single app. The trust runs 10 GP practices as well as acute and community services. This partnership was terminated by Babylon eight years early in 2022 (see contracts).

A partnership with University Hospitals Birmingham Trust, which began in May 2019, covered the launch of the symptom checker service Ask A&E, whose use the trust hoped would reduce the pressure on its A&E and hospital services. This partnership was also terminated in 2022.

The Covid-19 pandemic gave Babylon plenty of opportunities for accessing the NHS (see below for details).

Failure in the UK

The company went public on the US markets in late 2021 and made acquisitions of companies in the USA. There then followed severe financial difficulties (see Finances for more details). In May 2022 Babylon Health’s CEO Dr Ali Parsa said that the company needs to be “very cautious” about expanding its business in the UK as it loses money on every patient.

In July 2022, Babylon announced "cost reduction actions" that primarily targeted its business in the UK. In August 2022, the company terminated its contracts with University Hospitals Birmingham Foundation Trust and The Royal Wolverhampton Trust (RWT). Babylon has decommissioned its symptom checker service Ask A&E, and has ended a wider 10-year partnership with RWT eight years early. The company says the collaborations are no longer economically viable.

In August 2022, the company's CFO, Charlie Steel, said the company has been a ‘victim of [its] own success’ and it cannot ‘continue to fund the NHS forever’. Referring to its GP at Hand service, he said "people are using the service significantly more than the national average, because you can get appointments within hours rather than having to wait two weeks. So, in some ways we’re financially a victim of our own success." Mr Steel said there are plans to “stop losing money” for each patient Babylon takes on, one of which includes increasing appointments from four to five an hour. At the end of October 2022, Babylon terminated its Birmingham GP at Hand service, leaving 5,000 patients to find a new GP. Babylon told Pulse its Birmingham operation were ‘no longer financially sustainable.’

Chronic conditions

Babylon did make an investment of £100 million in the development of digital tools to monitor chronic conditions in 2018.

Litigation

One facet of Babylon's 'strategy' in the market was resorting to litigation in the face of criticism. In December 2017, HSJ reported that the company had failed to prevent the CQC publishing an inspection report of the company's service.

Babylon had filed a legal action in the High Court, challenging the publication of the inspection report; the CQC stated that the report was “not particularly adverse”. The court rejected Babylon's request for an injunction to prevent publication and the report was published. However, the court also heard that the CQC had agreed to remove a large part of the original report before it was published.

In September 2018, HSJ detailed various other attempts by the company to silence criticism and even reporting. These include Babylon's angry reaction to a CCG's board papers that documented doubts about the strengths of its product and Babylon's efforts to exclude HSJ journalists from an event at its headquarters at which Matt Hancock was speaking. The publication's journalist was only allowed in after the intervention of Mr. Hancock.

US Strategy

Babylon made major investments in the USA and it became its primary target market. In 2020, Babylon launched Babylon 360 in the USA, an app-based service giving 24/7 access to healthcare and personal health goals. Access to therapists and healthcare professionals via the app is available through select healthcare insurance plans. By mid-2021 health insurance plans in California, Nevada, New York and Iowa were signed up. In June 2021, CEO Parsa said that this market had already made up more than 80% of its revenues for the year so far.

In late December 2021, Babylon acquired the US company Higi Holdings, a consumer health engagement company​ and in January 2022, the company DaytoDay Health, based in Boston, MA.  DayToDay has developed technology to support patients newly discharged from hospital and pre-op patients. The system provides virtual care including targeted education and clinical support from a personal care team before or after clinical visits, hospitalizations, or surgeries. Despite this financial outlay on acquisitions, all was not well financially.

In October 2021, the company went public on the New York Stock Exchange via a merger with Alkuri, a special purpose acquisition company (SPAC) with an implied equity value for Babylon of about $4.2 billion. Then the company's share price plummeted and in November 2022, CEO Ali Parsa described this decision to go public in the US and the company’s stock market performance since as an “unbelievable, unmitigated disaster” that has required a significant restructuring of the business. Eventually, the company's shares became almost worthless and Babylon Health announced an agreement in May 2023 to be taken over by its major creditor AlbaCore Capital and become a private company again. This agreement fell through and in August 2023 Babylon's became insolvent and it began winding up its US operations.

Other countries

In China, Babylon teamed up with Tencent’s WeChat social messaging platform in April 2018. The deal means the one billion WeChat users can enter their symptoms to Babylon’s app, which will then send back healthcare advice. In Saudi Arabia, Babylon had a contract with the Kingdom to provide its technology to the population. Babylon launched its smartphone app in Rwanda in 2016. In November 2017, a partnership with the Rwandan government and the Bill & Melinda Gates Foundation, led to the launch of the app to the entire population of Rwanda. The deal was part of a drive by the government of Rwanda to deliver affordable, accessible healthcare to the people of Rwanda.

In September 2018, Babylon partnered with Telus, a Canadian company, to provide doctors and patients in Canada with access to virtual healthcare technology solutions and services.