Public/Private: How UK Public Health is Supporting Healthtech

The UK’s publicly funded National Health Service (NHS) served a population of 68 million and spent approximately £239 billion in 2023, representing 11.1% of GDP. Its massive – though not quite monolithic – presence as a healthcare provider presents both an opportunity and a challenge for healthcare and medtech startups. On the one hand, the NHS wants to implement new technologies both to increase efficiency and to achieve better health outcomes. On the other hand, startups can struggle to talk to the right people and meet all the necessary regulatory requirements.

So what are the realities of marketing new digital products to the UK healthcare system when you run a small, modestly funded business?

An example is Stroll, founded in 2019, which has developed an augmented reality platform that uses gaming tools and audio and visual cues to support the rehabilitation of people with neurological conditions such as Parkinson’s or to slow their decline. In addition to testing the product in the NHS, Stroll has just signed a collaboration agreement with US healthcare provider Cleveland Clinic. Speaking shortly before the deal was officially announced, I wanted to ask CEO co-founder Jorgen Ellis about the company’s journey to a potentially international market from the UK health ecosystem.

As he explains, co-founder Thomas Finn designed the concept. After seeing how something as simple as colored lines placed on the floor helped his father, who suffered from symptoms similar to Parkinson’s disease, walk, he thought the same therapeutic benefits could be more effectively achieved with software developed for augmented reality glasses. . Ellis, who cut his entrepreneurial teeth starting an apartment furniture business in his native New Zealand, took over as CEO soon after. “We had £50 in the bank – that was at the start,” he recalls.

So how did an augmented reality tool go from concept to reality? There was a lot of preliminary work to do. The company initially partnered with a Dutch university to research the concept and gather clinical evidence that the treatment could be successful. This opened the door to approximately €0.5 million in research funding to support product development, followed by $1 million in seed funding as the company worked to create an MVP while also securing regulatory approval in the UK. “That’s when we did our first couple of NHS contracts,” Ellis says.

NHS Partnerships

As Ellis points out, the company’s ability to gain traction was due in large part to the NHS’s willingness to engage with relatively young companies. Support for innovators is now embedded in organizational policy, as evidenced by a number of programs that provide both funding and access. For example, the Health Innovation Network connects researchers and startups with healthcare professionals. The Small Business Research Initiative for Healthcare runs competitions designed to enable startups to respond to challenges. The Innovation Pathway offers businesses the opportunity to access NHS expertise when developing their products. The NHS Transformation Directorate seeks to lead the digital transformation of the service.

And as Ellis explains, partnerships with NHS bodies have been crucial to Stroll’s success so far. “The NHS has been a good partner. And there are actually a lot of really good organizations in the NHS that support innovators in developing their technology and getting it from pilot to deployment,” he says.

However, Ellis stresses that it is not an easy process. “You have to work hard,” he says. “For example, we worked with Leeds Teaching Hospitals for about two and a half years. We are also listed with the Innovation Service, have worked with Health Innovation Networks and have been to many NHS trusts (bodies that run services at a local level).

He says it’s important not only to talk about the clinical benefits of a particular product, but also to talk to managers about the constraints they’re working under in terms of budget, staff and resources. These multi-stakeholder conversations allow the NHS to take a cost-benefit view of any particular system, while giving the technology provider a unique insight into the buyer’s requirements.

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

Funding options

The nature of the relationship between innovators and the UK health service has implications for start-up funding. Simply put, grant money is available. To date, Stroll has raised $3.7 million in equity and £7 million in grants. The next step is Series A.

Ellis says companies in the sector should also address compliance as early as possible, adding that one of his earliest hires was a regulatory specialist. In addition to clinical regulations, cyber security and data governance policies are crucial, especially as the NHS continues to set plans for digitization.

Stroll’s collaboration with Cleveland Clinic now opens a new stage in the company’s development. Under the terms of the $3 million deal, the US healthcare provider will take a stake in the UK company. In addition, a treatment tool developed by the Cleveland Clinic will be integrated into the Stroll platform. According to the clinic, by using the AR system, it is possible to extend its treatment to patients’ homes.

For Stroll, this opens a new frontier. “Our focus right now is on the US,” says Ellis.

Nevertheless, the UK ecosystem is potentially very fertile ground for health technology companies and this is reflected in the investment figures. According to a recent report by Galen Growth, ventures in this sector will raise $835 million in 2023. Despite falling from previous peaks, Britain remains the largest sector ecosystem in Europe, according to the report. Much of this is said to be down to NHS support.