Public/Private: How UK Public Health Care is Feeding Health Tech

Serving a population of 68 million, the UK’s publicly funded National Health Service (NHS) will spend around £239 billion in 2023, accounting for 11.1% of GDP. Its widespread – though not the most singular – existence as a healthcare provider represents both an opportunity and a challenge for startups working in the field of health and medical technology. On the one hand, the NHS is eager to deploy new technologies, both to drive efficiency and deliver better health outcomes. On the other hand, startup companies may struggle to talk to the right people and address all the necessary regulatory requirements.

So what are the realities of marketing new digital products to the UK health system if you run a small and modestly funded company?

A case in point is Stroll, founded in 2019, which has developed an augmented reality platform that uses gamification tools and audio and visual cues to either support rehabilitation or prevent decline, in neurological conditions such as People with Parkinson’s disease. In addition to testing the product on the NHS, Stroll has just signed a collaboration agreement with US healthcare provider Cleveland Clinic. Speaking ahead of the official announcement of the deal, I was keen to ask CEO co-founder Jorgen Ellis about the company’s path to a potential global market within the UK health ecosystem.

As he explains, it was co-founder Thomas Finn who created the concept. After seeing how something as simple as colored lines drawn on the floor helped his father — who suffered from Parkinson’s-like symptoms — to walk, he thought the same therapeutic benefits could apply to virtual reality glasses. The most effective can be achieved by using the developed software. . Ellis, who cut his entrepreneurial teeth by establishing a flatpack furniture business in his native New Zealand, was appointed CEO shortly afterwards. “We had £50 in the bank account – that was fine at the start,” he recalls.

So how did an augmented reality device move from concept to reality? There was a lot of ground to work on. Initially, the company worked with a university in the Netherlands to research the concept and gather clinical evidence that the treatment would be successful. This opened the way for around €0.5 million in research funding to support product development, followed by $1 million in seed funding as the company worked to develop an MVP while also securing regulatory approval in the UK. “Then we secured the first two NHS contracts,” Ellis says.

NHS Partnerships

As Ellis insists, the company’s ability to achieve this was in no small part due to the NHS’s willingness to engage with relatively young companies. Support for innovators is now baked into organizational policies as evidenced by a range of programs that provide both funding and access. For example, the Health Innovation Network connects researchers and startups with health professionals. The Small Business Research Initiative for Healthcare runs competitions designed to allow startups to respond to challenges. The Innovation Path provides a means for businesses to access NHS expertise as they develop their products. The NHS Department of Transformation is looking to drive the digital transformation of the service.

And as Ellis explains, partnerships with NHS agencies have been vital to Stroll’s progress so far. “The NHS has been a great partner. And actually, the NHS has a lot of really good organizations that support innovators to develop their technology and get it from pilot to disruption,” he says.

However, Ellis insists that it is not an easy process. “You have to work harder,” he says. “For example, we’ve worked with Leeds Teaching Hospitals for almost two and a half years. We’ve also listed ourselves with Innovation Services, we’ve worked with the Health Innovation Network and we’ve reached out to many NHS trusts. (Those bodies that manages services at a local level)

It’s important to not only talk about the clinical benefits of a particular product, but also talk to managers about the constraints they’re working with in terms of budget, staff and resources, he says. This dialogue with multiple stakeholders enables the NHS to consider the relationship between the cost and benefits of any particular system, while giving the technology provider unique insights into the customer’s needs.

“For us, it all comes down to the question of how you scale rehabilitation services with technology. We’re really focused on helping healthcare providers achieve that.

Funding opportunities

The nature of the relationship between innovators and the UK’s health services has an impact on the way start-ups are funded. Simply put, the grant money is there. To date, Stroll has raised $3.7 million in equity funding and £7 million in grants. The next step is Series A.

Ellis says companies operating in this sector must also address regulatory compliance from the earliest possible stage, adding that one of his first hires was a regulatory specialist. In addition to clinical regulations, cyber security and data management policies are critical, especially as the NHS pushes forward with digitization plans.

Stroll’s collaboration with the Cleveland Clinic now opens a new phase in the company’s development. Under the $3 million deal, the US healthcare provider is buying an equity stake in the UK company. In addition, a therapeutic device developed by the Cleveland Clinic will be integrated into the Sterol platform. By using the AR system, the clinic says there is an opportunity to expand treatment to patients’ homes.

It opens a new frontier for walking. “Our focus is now on America,” says Ellis.

That said, the UK ecosystem is potentially very fertile ground for health tech companies and this is reflected in the investment figures. According to a recent report by Glengrove, investments in the sector are expected to reach $835 million by 2023. Despite the decline from previous heights, the report says Britain remains the largest ecosystem of the sector in Europe. In fact, much of this is due to the support of the NHS.