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Public payors are yet to fund digital health in a sustainable way

The only way that digital care can be financially sustainable for both payors and operators is if it can scale. But recent debates in the UK and Sweden show that the public payor – the main mechanism that enables scale – is not yet equipped with the right mechanism to fund it.

Babylon’s UK service GP at Hand is funded through the country’s primary care capitation model yet has left its local health payor £21.6m in debt. Similarly, Sweden’s fee-for-service payment has cost the country €14m, which HBI hears has been a “strain on reimbursement”.

The two models are very different but public figures in both countries have been claiming that the care is expensive and unaffordable. Authorities in Sweden are even threatening to remove the mechanism that enables companies like KRY and Min Doktor to operate nationally. KRY tells HBI that if it is forced to work “regionally” it might no longer see the country as a core market.

Private payment models don’t support scale in the same way unless PMI penetration is particularly deep. So why is the public payor yet to implement a model that supports innovation? Because it’s an incredibly complex issue. In order to be most effective, digital health services need to be integrated across all levels of care.

One UK-source tells HBI that primary care across the UK needs to be remodelled, reorganised and reconfigured if the NHS wants equal access to digital care. Commissioning will likely have to be taken out of the hands of private GP practices or regional CCGs and delivered at a national level. Other sources say too that funding for telehealth in Sweden might have to be taken away from its 21 autonomous regions and applied at a national level.

Well-organised national budgets for telehealth could work in both countries, and may well be the best way of providing patients with medical advice in many cases – but the public payors have yet to figure out how.

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