Babylon Health, the UK’s leading digital healthcare company, recently announced its second quarter (Q2) 2022 results.
The London-based, digital-first health company founded in 2013 expanded to the US last year following a $4.2 billion merger, acquiring California-based clinic First Choice Medical Group. and expanded nationwide.
related news: Healthcare startup Babylon plans to go public with $4.2 billion SPAC merger
Since then, Babylon has expanded into new states and has pinned its hopes on a series of partnerships and acquisitions to solidify its position as one of the leading telemedicine providers in the United States.
In Q2 2022, the UK-based company saw a 220% year-over-year increase in the number of value-based care (VBC) members in the US, reaching a total of approximately 269,000 as of June 30.
“Second quarter revenue increased 4.6x to $265.4m, up to 7x faster sign-up speed for high-risk members, 31% ER avoidance on longest VBC contracts, 7.5x medical margin % Improved, said Ali Parsa, CEO and founder of Babylon, in a press release.
read more: UK’s Babylon Health sees ‘huge demand’ in US with unique digital-first solution
Competitive British landscape
Babylon’s strong interest in the US market raises questions about why the UK-based healthcare company is desperate to establish itself as a major player in the US healthcare sector.
Babylon isn’t the first British tech company to see the US market as the ultimate prize, but the nature of the UK’s healthcare services makes international expansion particularly attractive for the company.
read more: Hoxton Ventures partners say EU firms need to win in US first to win big
Also read: VCs say EU firms can still win big without US expansion
When Babylon first went live in 2014, its primary business model was a private subscription service. This allowed users to pay a fixed monthly fee and book a telemedicine appointment with a Babylon physician. The company’s first major partnership was with Bupa, the UK’s largest private health insurer, which has made Babylon available to all policyholders since 2015.
But while the Bupa partnership was an important milestone in Babylon’s growth, the private health insurer would ultimately outperform the UK’s largest healthcare provider, the publicly funded National Health Service (NHS). and smaller.
In 2014, the company’s founder, Parsa, told Wired UK there was no reason the NHS could not use the platform, indicating an interest in partnering with the national health system. doctor’s. If it were to become an NHS platform, it would cost a few pennies per consultation,” Parsa said at the time.
But for some reason, Babylon had to wait until 2017 before a deal to deliver ‘GP’ was signed. [General Practitioner] Services to NHS patients. Although the initiative has been relatively successful since then, it is not the only telemedicine technology in the NHS arsenal. Babylon, a subsidiary of Stockholm-based pan-European telemedicine company Kry, must compete with increasingly popular provider Livi.
Watch Kry’s COO interview: Is digital healthcare progressing faster than EU lawmakers can adapt and regulate?
Navigate public vs.private health system
One of the most widely expressed complaints about Babylon’s NHS initiative is the need for patients to be unenrolled from their existing GPs, and in 2018 some NHS staff publicly reported outside Babylon Health Clinics. That’s what made me protest. Livi, on the other hand, does not require patients to sign up for its service.
detail: Swedish telehealth company Kry raises $160 million
And unlike Babylon’s digital-first GP practices, Livi operates as an ancillary service to support existing practices, without requiring patients to switch between registered GPs.
As PYMNTS reports, much of Kry’s success stems from forging partnerships with national and regional healthcare providers. This tactic allowed Kry to expand its footprint from Sweden to Britain, Germany, France and Norway.
read more: EU health tech companies use partnerships and hybrid approaches to complement existing delivery models
The Swedish company will focus on training telemedicine doctors before signing service contracts with public health providers to offer telemedicine options to their patients through Kry’s platform.
The company launched its SaaS product in the UK in 2020, partnered with the NHS to provide telemedicine services to patients and to date has helped over 6 million NHS patients access remote appointments.
Kry’s success in securing these deals with public health providers in Europe stands in stark contrast to Babylon, which seems to be increasingly pivoting to privately funded health care systems like those seen in the United States. Thing.
As reported by the Health Service Journal, Parsa said in early May that it was “very cautious” about further growth of its GP service in the UK as the company is currently losing money on every patient it enrolls. was showing
Kry, on the other hand, has shown no intention of venturing into the privately-funded healthcare market. And the current business model is proving to be strong enough for investors to not hesitate.
The company’s 2021 Series D funding round has a valuation of over $2 billion, and last month it announced it had secured an additional $160 million to expand its operations across the region.
References: Digital health start-ups are making big moves in the UK, Europe and Africa
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