Lockdown is changing everything. Not least the digital revolution rippling through GP surgeries in the UK, where start-ups are disrupting the disruptors to accelerate mass adoption of new patient services. The BBC’s technology correspondent Rory Cellan-Jones captured a timely snapshot of this particular COVID-19 fallout with his article on the tech minnows changing the NHS.
Delivering digital breakthroughs that transform markets
The report sparked an ardent debate here at Cambridge Consultants, via Teams and Zoom naturally, on just how protectable digital services really are, and whether today’s breakthrough innovation is under threat of becoming tomorrow’s commodity. The crux of Rory’s story was that patient service start-up accuRx, had stolen a march on the AI-based telemedicine leader Babylon. The strong consensus of the team here is that such healthy competition provides lessons to inform an overall digital services strategy. It also puts fresh focus on key advice I regularly share with clients.
The topline is this. Fundamentally, it is hard to protect a service idea per se. Deliveroo can’t shout foul when a new wave of competitors starts delivering restaurant food on bicycles. But if an intrinsic technology element is clever enough to make the experience better, then fantastic – because that can be protected. The vital point is that the novel, and therefore protectable, tech innovation should contribute to the end user’s utility and perceived value.
This is an area I covered in depth in my blog on service innovation but, in a nutshell, user primacy must always come first. Digital services should be built from the ground up, with the ultimate user goals driving everything. If we as innovators and service designers don’t use technology to deliver efficiency, convenience and ultimately experience that customers delight in, there’s nothing to stop them switching out to another provider.
AI technology in a Babylon app
With that best practice in mind, let’s take a closer look at the battle for supremacy in UK GP telemedicine. The established player, Babylon, has combined AI technology in an app to provide video access to real GP appointments. The service utilises a chatbot and is backed with lots of clinical data and guidance. Within 15 minutes, users can build a ‘digital twin’ of themselves that provides a health check and guides diagnosis. In this case, and in many other examples, I take digital twin with a pinch of salt as it’s actually simply a digital snapshot with no real-time connection to the patient.
Babylon’s apparent nemesis in the BBC article is accuRx, which initially offered a super-simple GP-to-patient notification system using SMS. The free service enjoyed such a huge take-up that one in three UK GP practices were soon using it. When lockdown hit, accuRx offered a very simple browser and mobile app option for secure video consultations. A few months on they have 90% of all UK GP practices signed up.
Also entering the fray is fresh faced but medically trained start-up NYE with ‘NHS compliant’ secure video and audio consultation solutions. They can be used from intensive therapy units to dermatology departments and GP surgeries. In common with many of the co-innovation and ideation sessions we have with both start-ups and incumbent providers, NYE’s idea arose from a three-day intensive brainstorming exercise.
The Rory Cellan-Jones article concluded that the ‘disruptor has been disrupted’ but in my view that’s far from the end of the story. My colleague Bill Hodson has been writing about the Cambridge Consultants response to COVID-19. The implications for wellness in general and the opportunities for telemedicine specifically are an important part of the mix. While industries like telecom, media and logistics have adopted digital services widely, medicine remains ripe for opportunity. Jaquie Finn, our head of digital health set out many of the digital transformation opportunities across the care pathway in her recent vlog.
Digital health immaturity
The market opportunity is huge and there is much for everyone to play for. Babylon, AccuRx and NYE could all be described to some extent as start-ups. But Babylon is quite advanced and has multi-national operations, while NYE is a brand-new business. Market breadth here and the immaturity of digital health means that there is plenty of space, plenty of parallel competitions for each of them to win. AccuRx has very much gone for the consultation with GPs whereas NYE has chosen to look at more specialised hospital consultations.
Babylon’s relative greater maturity also means they are clearer about their service model and monetisation. But other providers in the market, such as Current Health, have a more sophisticated play using AI and an even more accurate patient monitoring system than Babylon. AccuRx and NYE are both operating as pre-revenue services backed by investors. We don’t know what their long-term play is. It might be the case with all three that the goal is not subscription revenue but the very much more lucrative long-term value from the rich health data they are collecting. Babylon has the magic here, with the gold dust combination of both big data and AI/ML (artificial intelligence/machine learning).
Putting the race for commercial advantage aside, concern remains in the digital health space about digital platforms amassing our private health data. In the United States, three new FDA reimbursement codes for remote monitoring as part of telemedicine have helped push telemedicine to new levels of adoption. Is the UK and Europe as advanced as the FDA in their thinking on this? Even with urgency sparked by the current global crisis, we might expect a cautious and interventionist approach.
There was one final aspect of the BBC article that struck me – the fact that Babylon is ‘taking advantage of the government's job retention scheme to furlough 5% of its 2,000-strong workforce’. Am I being naïve to ask why such a digital services provider, with so much opportunity and competition is taking such a step? Is this not a time to be taking bold investment move and thinking more of expansion?
Well maybe it’s tied up with the fact that even digital service providers have high fixed costs such as office space. And that reminds us that there is always a digital/physical bridge in running any digital service. Fine tuning the performance of a digital business needs skills in both and is something we can advise on.
To sum up, economies of scale will mean that certain players will dominate markets – but there are many niches to be found, either defined by business model, area of medicine or in the relationship to the medical practitioner. It’s a fascinating and challenging area, so please drop me a line if there’s any aspect you’d like to discuss in more detail. In my book, when you combine business strategy with technology innovation, a competitive edge can always be found.