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Are we already seeing the end of the purely digital player?

Europe’s biggest digital health players all started out as consumer-facing tools to help the patient navigate the healthcare system. Now a handful of the most established brands are moving into physician and system facing tools through acquisition and integration of physical providers.

The past two or three years have seen the rise of Doctolib and Babylon: both unicorns employing around 1,500 people each. This is a far cry from a few tech geeks in a basement trying to sell algorithms. These are also the two groups that we’ve witnessed move the furthest away from their original value propositions.

Doctolib started as an online booking platform and has now run 150,000 telehealth consultations and is even helping hospitals with scheduling patients through triage to make sure they arrive at the right specialist. Babylon started as a remote consultation provider but has very recently started to position itself in the chronic disease management space: most recently with one NHS Trust and a rumoured, but unconfirmed, contract with Centene.

That transformation has been achieved partly through the brand appeal but also because working in a consumer market creates data and evidence that digital health players can then take to wider healthcare systems. Look at the work that Ada is doing in Romania and sub-Saharan Africa through charitable foundations. We presume that this is as much about gathering evidence of how well the front-end diagnostic tool works to help it sell the solutions into wider healthcare systems than impact investing.

So some solutions are becoming more physical because of how they are integrated to help bricks and mortar function better. However, we’re also seeing some digital health players straight up acquire physical premises. This week UK homecare start-up Cera Care acquired Mears’ domiciliary care business and last week Canadian telehealth player Dialogue acquired German occupational healthcare group ARGUMED and is also in the midst of launching an occupational healthcare JV with Fresenius Helios.

These are much more obvious attempts to integrate the digital and the physical. Acquiring companies with established patient bases without high marketing costs of establishing a brand and the patient acquisition gives the digital firms an opportunity to develop and test new solutions. Dialogue’s attempt to play into wider healthcare systems is already obvious through the JV.

This is where becoming digi-physical has happened by choice. Over in Sweden, we’re seeing policymakers push the country’s largest groups into more integrated care – towards a capitated model – because of spiralling costs.

For a while we’ve seen digital health groups integrating with the payor, mostly insurers, to help control costs. But this is about digital healthcare companies becoming integrated into healthcare services. Over the next year we expect to see most digital groups not just sell their original basic solution to health authorities and groups but hand-in-hand develop solutions to increasingly digitalise every aspect in the healthcare system.

When a health company helps to run a hospital – can we truly call it digital?


We would welcome your thoughts on this story. Email your views to Rachel Lewis or call 0207 183 3779.