Complexities of selling to Britain's health service big obstacle for startups

Washington

PETER Hames was born in the northern English city of Leeds, educated at Oxford, and founded a digital health startup in London in 2010. Six months ago, he and his company moved to San Francisco.

Mr Hames had the backing of doctors, patients and venture capitalists for Sleepio, an online insomnia treatment. But he couldn't see a way to sell the idea to Britain's National Health Service (NHS), which controls virtually all medical spending in Britain. In California, by contrast, he's marketing to companies that self-insure their employees.

"The bigger opportunity was…