Technology firms are revolutionizing sector by partnering with public hospitals and acquiring private ones

Like many people in China, Chen Hua (not her real name), a 60-year-old from Guangdong province, used to hate visiting hospitals because every time she had to wait in long lines to see a doctor, pay medical bills and buy the prescription drugs.

Now, she has found a better alternative: She visits a nearby drugstore where she can interact with doctors at major hospitals via video link.

 

A nurse checks the body temperature of patients at a medical center in Hangzhou, Zhejiang province.

Recently, Chen had backache and had an online consultation with a doctor at Guangdong Internet Hospital, which is operated by the Second People's Hospital of Guangdong province. "He prescribed medication online, which I could buy immediately (at the drugstore)," she says. "Previously, it took four hours to see a doctor, but now the entire process takes less than 10 minutes."

Chen is among a growing number of patients benefiting from China's booming online medical services. Technology companies are rushing to revolutionize the sector by partnering with public hospitals and acquiring private ones.

Dozens of internet hospitals are popping up across China, fueled by strong support from local governments. Alibaba Group Holding Ltd, Tencent Holdings Ltd and a string of startups are all eyeing the niche.

Internet care services ready to flourish

Jiang Xinwei at consultant company Analysys International says China's internet healthcare industry has entered a new stage after years of explosive growth in basic online medical services, such as making appointments and paying medical bills.

Analysys International estimates the industry was worth 11.3 billion yuan ($1.73 billion; 1.54 billion euros) in 2014, up from 5 billion yuan in 2011, with the figure rising to 15.7 billion yuan this year.

"By setting up online hospitals, tech companies are finally looking at the key aspects of remote diagnosis, which promises bigger chances of profitability," Jiang says.

Qin Zexi, an analyst with iResearch Consulting Group, says the online healthcare industry will continue to gain steam, thanks to the swift development of mobile internet technology and the government's intensified efforts to push medical reforms.

"Public hospitals used to be reluctant to embrace the internet, but now that has gradually been changed by the government," Qin says.

In March, Li Bin, the minister in charge of the National Health and Family Planning Commission, called for more widespread use of the internet to direct patients to different medical institutions based on their needs, so as to reduce the pressure on big hospitals and improve the efficiency of medical resources.

Unlike other web-based services such as e-commerce, which initially boomed in the wealthy eastern provinces, online medical service providers have ventured into less-developed western regions.

We Doctor Group, which has raised more than $100 million in funding from Tencent, opened an internet hospital for northwestern Gansu province recently by teaming up with a local public hospital.

"The internet can help expand medical services to secluded villages and remote regions such as the Tibet autonomous region," says Liao Jieyuan, CEO and chairman of We Doctor Group, who adds that patients can organize video diagnosis, e-prescription and drug deliveries via its platform.

Alibaba is running a similar project in a village in the central province of Hubei, where it hopes to help villagers deal with common and chronic illnesses like hypertension and diabetes.

However, other players are eyeing the higher end of the online healthcare market, which includes handling serious and complicated illnesses by pooling top-level doctors.

"Every year, thousands of people travel to top-tier cities, looking for experts to treat diseases that local doctors can't deal with," says Wang Hang, CEO of Haodf, which says it employs 100,000 qualified doctors.

"By leveraging the internet, patients can first have a video call with experts to see whether they need to be treated in person. This helps reduce unnecessary transportation costs. Local doctors will also be present to offer the most accurate descriptions of patients' symptoms."

Haodf inked a deal with the Yinchuan city government in the Ningxia Hui autonomous region this month to create an online hospital that connects top-level doctors from big cities with local clinics.

Jiang at Analysys says, "The two models are still nascent, but I'm more optimistic about the high-end medical services market because of the enormous demand. Patients in this group are more willing to pay (for services)."

However, Tian Junzhang, president of the Guangdong Second People's Hospital, argues that it is nearly impossible to attract so many experts to offer online diagnoses.

"The more renowned a doctor, the less willing he or she is to treat a patient online because it is too difficult and risky to handle complicated diseases through the internet," he says.

Huang Jinchang, the director of oncology at the Beijing University of Chinese Medicine Third Affiliated Hospital, adds, "The key to internet services is whether doctors can make accurate diagnoses based on the information they get from the video calls."

He says time is not a factor for doctors who budget it efficiently. Currently, he spends up to an hour a day answering questions that patients pose online.

"Online medical services are a growing trend, but they can only complement a face-to-face diagnosis. In the near term, I won't consider shifting to video diagnosis. After all, the technology is not that mature yet," he says.

In addition to technological bottlenecks, analysts say the issue of getting internet medical services covered by China's national medical insurance system remains thorny, especially for prescription drugs sold online.

Ni Jianwen, vice-president of Alibaba's health business division, said in an interview with media group Caixin that, due to the different regional policies, drug sales receipts sometimes are not accepted by local insurance authorities, creating difficulties for people buying medicine from online stores.

Huang Jinchang, the director of oncology at the Beijing University of Chinese Medicine Third Affiliated Hospital, adds, "The key to internet services is whether doctors can make accurate diagnoses based on the information they get from the video calls."

He says time is not a factor for doctors who budget it efficiently. Currently, he spends up to an hour a day answering questions that patients pose online.

"Online medical services are a growing trend, but they can only complement a face-to-face diagnosis. In the near term, I won't consider shifting to video diagnosis. After all, the technology is not that mature yet," he says.

In addition to technological bottlenecks, analysts say the issue of getting internet medical services covered by China's national medical insurance system remains thorny, especially for prescription drugs sold online.

Ni Jianwen, vice-president of Alibaba's health business division, said in an interview with media group Caixin that, due to the different regional policies, drug sales receipts sometimes are not accepted by local insurance authorities, creating difficulties for people buying medicine from online stores.

 

A member of the medical staff operates online diagnostic equipment at a medical center in Hangzhou, capital of Zhejiang province.

 

(Source: China Daily Europe)