How the UK’s National Health Service supports medical technology

Serving a population of 68 million, the publicly funded National Health Service (NHS) in the UK spent around £239 billion in 2023, or 11.1% of gross domestic product. Its vast – if not entirely monolithic – presence as a healthcare provider presents both an opportunity and a challenge for health and medical technology startups. On the one hand, the NHS wants to implement new technologies, both to increase efficiency and to deliver better health outcomes. On the other hand, startups can struggle to connect with the right people and meet all the necessary regulatory requirements.

So what does the reality of introducing new digital products into the UK healthcare system look like if you run a small business with modest funding?

For example, Strolll, founded in 2019, has developed an augmented reality platform that uses gamification tools and audio and visual cues to support rehabilitation or halt decline in people with neurological conditions such as Parkinson’s. As well as testing the product within the NHS, Strolll has just signed a collaboration agreement with US healthcare provider Cleveland Clinic. Speaking ahead of the official announcement of the deal, I wanted to ask co-founder and CEO Jorgen Ellis about the company’s path into a potential international market from the UK healthcare ecosystem.

He explains that it was co-founder Thomas Finn who came up with the concept. After seeing how something as simple as coloured lines on the floor helped his father, who had Parkinson’s-like symptoms, walk, he thought the same therapeutic benefits could be achieved more effectively using software developed for augmented reality glasses. Ellis, who began his entrepreneurial journey by setting up a flat-pack furniture company in his native New Zealand, joined as CEO shortly afterwards. “We had £50 in the bank – that was when we started,” he recalls.

So how did the augmented reality tool go from concept to reality? There was a lot of groundwork to be done. Initially, the company worked with a university in the Netherlands to investigate the concept and gather clinical evidence that the therapy could be effective. That opened the door to around €0.5 million in research funding to support product development. Then came $1 million in seed funding as the company worked to create an MVP while securing regulatory approval in the UK. “We then secured our first few NHS contracts,” says Ellis.

NHS Partnerships

As Ellis points out, the company’s ability to gain traction has been largely due to the NHS’s willingness to work with relatively young companies. Support for innovators is now embedded in the organisation’s policy, with a range of programmes 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 to help startups respond to challenges. The Innovation Pathway offers businesses a way to access NHS expertise as they develop their products. The NHS Transformation Directorate is working to drive the service’s digital transformation.

As Ellis explains, partnerships with the NHS have been key to Stroll’s progress so far. “The NHS has been a good partner. And in fact, the NHS has a lot of really good organisations that support innovators to develop their technology and bridge the gap from pilot to deployment,” he says.

But Ellis stresses that it is not an easy process. “There is a lot of work involved,” he says. “For example, we worked with Leeds Teaching Hospitals for about two and a half years. We also applied to the Innovation Service, worked with Health Innovation Networks and had a presence in a number of NHS trusts.”

It’s important, he says, to talk not just about the clinical benefits of a particular product, but also to talk to managers about the constraints they are working with in terms of budgets, staff and resources.” These multi-stakeholder conversations allow the NHS to take a position on the cost-benefit of a particular system, and also give the technology provider a unique perspective on the buyer’s requirements.

“For us, it all comes down to how to scale rehabilitation services using technology. We’ve really focused on helping healthcare providers do that.”

Financing options

The nature of the relationship between innovators and the UK NHS has implications for how startups are funded. Simply put, there’s grant money available. So far, Strolll has raised $3.7m in equity and £7m in grant funding. The next step is a Series A.

Ellis says that companies operating in the sector should also address compliance from the earliest possible stage, adding that one of his first hires was a regulatory officer. As well as clinical regulations, cybersecurity and data governance rules are hugely important, particularly as the NHS pushes ahead with its digitalisation plans.

Stroll’s partnership with Cleveland Clinic now marks a new phase in the company’s development. Under the terms of the $3 million deal, the U.S. healthcare provider is taking a stake in the British company. In addition, a treatment tool developed by Cleveland Clinic will be integrated with Stroll’s platform. The clinic says the AR system has the potential to extend therapy to patients’ homes.

For Stroll, this opens up new frontiers. “We’re focused on the U.S. now,” Ellis says.

That said, the UK ecosystem is potentially very fertile ground for health tech companies, and the investment data reflects this. According to a recent report from Galen Growth, ventures in the sector raised $835 million in 2023. Despite falling from previous peaks, the report found that the UK remains the largest sector ecosystem in Europe. It could be argued that this is in large part due to the support of the NHS.