https://mailchi.mp/73102bc1514d/the-weekly-gist-may-19-2023?e=d1e747d2d8

Published last Sunday in TheTimes of London,

this article traces how the once-darling Babylon Health became an “unmitigated disaster”, for which the UK’s National Health Services (NHS) has paid a significant price. 

Babylon used its vision for a privatized NHS with slashed wait times and AI-powered treatment to boost its public offering, via a special-purpose acquisition company, with a $4.2B valuation in June 2021. Many of its promises have been revealed to be overly ambitious, if not doomed from the start, with its AI-powered diagnostics and funding model proving especially flawed.

A pivot to managed care in the US failed to stem a tide of mounting losses, and the company announced plans to go private last week. 

The Gist: There are myriad lessons from the demise of Babylon, a marquis example of a “digital-first” healthcare startup that burned through capital and crashed with the end of the era of cheap money:

virtual care isn’t a magic wand to reduce wait times, and healthcare startups (and their investors) should think as much about the path to profitability as they do about rapid growth. 

While Babylon did have its finger on the pulse of promising technologies, it applied them irresponsibly: for patients, inaccurate AI diagnoses could be worse than no care at all.

Amid the current AI frenzy, healthcare would benefit from more “slow AI”, developed with clinical and scientific collaboration and rigorous academic study design and testing, over “fast AI”, with pressure to generate returns for private investors pushing entrepreneurs to rapidly develop and deploy technology.