China and Telehealth in a post-Covid19 world

The Covid-19 outbreak accelerated the development of Telehealth in China. Both the government and private players are ready to transform how healthcare is delivered and to make China the leading country in telemedicine.

China Telehealth

Before the Covid-19 outbreak, JD Health, the telemedicine subsidiary of the e-commerce giant JD.com had 10,000 online consultations per day. In just a few weeks, this number raised to 150,000. To continue its expansion, “JD Family Doctors” was launched on On August 18th. Their ambitions are to revolutionize how health care is delivered in China.

“I hope we can set a new standard in the industry…and not let users move around medical resources, but let resources move around users”

Xin LIJUN, CEO of JD Healthcare

With this new Telemedicine offer, the company enables a family of up to eight people to store their health records in its system. They also gain access to 24/7 online consultation services.

This move is one of the most significant in an industry projected to be worth US$2.3 trillion by 2030.

JD Healthcare aims at delivering telehealthcare to 50 million people in the next five years. Following a $1 billion Serie A funding round in 2019, the company raised an additional US$830 million from private equity firm Hillhouse Capital Group.

The concept of Telehealth is relatively new in China. The first attempts date from the 1980s. But, as in many countries, the COVID-19 outbreak has changes everything when dealing with Telehealth. China has already more than 1,000 companies dealing with Telehealth and the growth will continue to be exponential. Both the Chinese government and the digital health providers have the will to accelerate the transition to make China one of the future leaders in online medical services.

A 1.4 billion people opportunity

With 1.3 billion people, China has the largest population on earth. The growth trend is expected to continue at least up to 2030 to reach more than 1.4 billion people. Despite having the second healthcare market in the world, the public health system remains greatly underdeveloped.

According to a recent article published in The Lancet, widespread gaps were found in primary care quality. Most Chinese visit medical institutions for all of their medical needs. It is not uncommon to have to wait hours for a five-minute face-to-face consultation.

China’s National Health system is divided into smaller community health centers (CHCs) and Class I institutions providing basic care. Larger Class II and III institutions offer specialist referral services. Access to healthcare is extremely unbalanced, with more than 2,300 top tier public hospitals running at capacity while low-tier hospitals and community health centers struggle to attract patients.

During the past decade, China invested a considerable amount of money in reforming access to Primary Healthcare (PHC). The Covid-19 outbreak showed that PHC or private Telemedicine companies could integrate and play an important role in screening and triage.

With an estimated population of 1.3 billion people, an unbalances healthcare system and a growing middle class, telemedicine platforms seek at providing a different access to healthcare.

The telemedicine providers aim at filling a gap in the Chine medical landscape. More than 200 million Chinese are part of an ever-growing middle class seeking quality and efficient healthcare. According to a survey conducted by Bain&Company in 2019, more than 60% of the Chinese planned to use online healthcare platform in the next five years.

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Challenges for Telehealth in China

As in any other country, Telemedicine faces challenges such as existing government policies and potential cybersecurity threats. In China, doctors cannot establish a primary diagnosis or prescribe treatment through a digital platform.

Hence, during a consultation, the patient only receives advice and no real treat. It is about to change. If a hospital wants to use a Telehealth platform, it needs to apply for an internet hospital license.

Regulations are constantly evolving in China. Digital healthcare platforms have to comply strictly, especially in terms of security of the data to prevent and limit cybersecurity threats.

China is the number one country in the world when considering the holistic use of the smartphone. Starting in August 2019, patients can access hospitals via WeChat and Alipay. They do not need to bring any medical insurance identity cards.

In May 2020, the country‚Äôs National Health Commission (NHC) supported the provincial governments’ initiatives to establish internet-based hospitals and regulate online medical providers. To apply, hospitals have to show that they have a technological partner.

In August 2020, the government officially introduced electronic licenses and certificates for medical institutions, nurses, and doctors. Altogether, the evolution in Healthcare regulations paves the way for the wide adoption of Telehealth in China.

How the Covid-19 pandemic changed everything

With a congested Chinese healthcare system unable to fulfill the population’s needs, Covid-19 acted as a catalyst for the adoption of telemedicine services. From December 2019 to January 2020, Chine online medical platform saw exponential growth in the number of online consultations: +800% for Ping An Good Doctor, +135% for Ding Xiang Yuan, and +100 for Chunyu Doctor.

Source: Bain & Company

The example of Ping An Good Doctor

Founded in 2014, Ping An Healthcare is a world-leading Telehealth platform. Listed on the Hong-Kong Stock exchange, the service has 346 million registered users and attracts more than 63 million monthly users.

Ping An Good Doctor is undoubtedly the largest mobile medical platform in China. The company has a staff of 1,836 medical professionals. More than 10,000 doctors, 3,700 hospitals, and more than 110,000 pharmacies collaborate with the platform. 

Ping An Good Doctor is a subsidiary of the Ping An Insurance group with more than 200 million registered users, a network of 3,100 hospitals, and 7,500 pharmacies. During the first half of 2020, a survey revealed that the company received 99% positive reviews.

The Telemedicine giant continues to expand its consultation platform and a vast portfolio of medical services. After launching “Ping a Private Doctor” in the second half of 2019, the company is launching “Ping a Doctor home.”

Image: Ping An Good Doctor’s first One-minute Clinic.

They also offer AI-powered medical booths called “One-minute Clinic.” The plan is to install more than 1,000 all across China. Including more than 300 million consultation data, the “one-minute” clinics can identify common diseases and deliver the appropriate medications.

One hundred drugs are refrigerated and stored in the booth. This service is especially valuable for working people who do not have the possibility to miss one day of work to go to the hospital.

This new offer is part of the strategy of Ping An Good Doctor to provide quality and personalized healthcare to the whole family. Private doctors can track long term conditions and become virtual family doctors.

When compared to 2019, the company revenues increase by 21% during the first half of 2020. Even though the company has not yet achieved break-even, Ping An Good Doctor is on its way to raising $1 billion for recruiting new physicians.

The future of Telemedicine in China

The Covid-19 outbreak was a triggering factor for the widespread adoption of Telehealth and medical online consultation. The Chinese government acted quickly to establish a framework for how medical institutions could partner with private companies to establish a consultation platform.

China saw a spread in the adoption of digital health as an opportunity to fix a broken healthcare system. With a vast and aging population seeking new ways to access healthcare, no doubt that telemedicine will continue to expand rapidly in China. One drawback may be linked to the communication network. The need for a robust 5g network will be mandatory especially in China remote areas.

The regulatory and technical bottlenecks are currently being addressed. We can reasonably assume that China will very soon be the world leader in telemedicine services and will lead the digital transformation of global health.

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