How Tencent’s medical ecosystem is shaping the future of China’s healthcare

Here’s what used to happen when you get sick in China:

You go to a public hospital to make an appointment, known as guahao (挂号). If the hospital is busy, which it usually is, you could be waiting in line for half a day. After guahao, you need to pay the consultation fee in another line. Only then can you see a doctor. After diagnosis, you get your prescription and line up again to pay for it. Then you wait in hopefully the last line to pick up your medication… if you’re still standing or have someone helping you.

This type of situation stems from the various issues plaguing the Chinese healthcare system. Its primary care system is underused due to the poor distribution of resources and lack of quality general practitioners, leaving hospitals to bear the brunt of treating patients. China also doesn’t have enough doctors: While the OECD average is 3.19 doctors for every 1,000 people, China only has 2.22 doctors and assisting physicians for every 1,000 people. The government began healthcare reform in 2009, but results have been mixed.

Enter Tencent—China’s largest internet company by market capitalization—armed with government endorsements, the most used app in China, new AI medical imaging technology, and tons of cash to invest in medical startups.

“Any sort of technology solution that adds greater efficiency or accuracy to [the Chinese healthcare] system will help improve it dramatically,” founder of Beijing-based Marbridge Consulting Mark Natkin told TechNode. “Tencent is introducing all these features and processes, WeChat [services] amongst them, that add efficiency and ease to the process. On the treatment side, anything that can pull together data from multiple hospitals and use that data to improve diagnoses is, again, a huge move forward.”

Skipping the Line

In 2014, Tencent launched WeChat Intelligent Healthcare (微信智慧医疗). The platform allows users to book appointments, make payments, and more at hospitals and other medical facilities through WeChat public accounts. As of 2017, over 38,000 medical facilities in China have WeChat accounts (in Chinese). 60% of those provide online consultation and guahao, and 35% support medical bill payment by WeChat pay.

The guahao section of WeChat’s Public Services for Beijing, including (r)a list of hospitals and (l) a list of doctors from the pediatric department of a hospital and their availability

“The last few times I took my child to the hospital, I booked appointments through the public accounts of the pediatric hospitals,” Shanghai resident Wang Yan told TechNode. “Once the booking is successfully made, then we catch a taxi to the hospital. It’s quite convenient.”

Over 110 million users (in Chinese) have searched for or used these services through WeChat. Cutting out physical guahao and payment lines has saved an average of 42.6 minutes—even if there are still long wait times to see a doctor.

Another service that could soon be found on WeChat is WeSure, a medical insurance underwritten by Tencent and insurer Taikang. The service began its pilot in November 2017 for 1% of WeChat users, a meager 9.63 million. In a push for healthy living, WeChat’s step count function can be linked to WeSure. Users who clock over 8,000 steps in a day will receive a hongbao from WeSure that can be deposited in their WeChat wallets.

AIMIS will see you now

Tencent launched in 2017 the AI Medical Innovation System or AIMIS (觅影 miying in Chinese), an AI-powered diagnostic medical imaging service. The internet giant has so far established AIMIS labs in over 10 hospitals across the country. They have also signed agreements to deploy AIMIS to close to 100 hospitals around China. The technology currently has accuracy rates (in Chinese) of over 90% for preliminary diagnoses of esophageal cancer, 95% for lung sarcoidosis and 97% for diabetic retinopathy.

Tencent and Hefei signing an agreement in 2017 to deploy various Tencent Internet+ technologies, including AIMIS. Tencent founder Pony Ma Huateng is in the back, 3rd from left. (Image credit: Huanqiu.com)

“Take esophageal cancer screening as an example,” the Tencent AIMIS team wrote in an email to TechNode. “AIMIS examines an endoscopic image in less than 4 seconds and can accurately determine whether the esophagus is normal, inflamed or already exhibiting signs of cancer. It can also help doctors to develop treatment plans.” This will help the doctors who are often overworked and short on time to make speedy and accurate diagnoses.

Several of Tencent’s AI departments, including the AI Lab and Youtu Lab, collaborated to develop Tencent’s imaging AI using the over 1 billion images on Tencent’s social network. The AIMIS team then worked closely with Guangzhou’s Sun Yat-sen University Cancer Center Oesophageal Cancer Research Institute and used tens of thousands of anonymized patient data to train the diagnostic component of the AI. AIMIS clinical trials are ongoing in several hospitals in Guangdong, continuing to add data to the system and refine its capabilities.

In November 2017, the Chinese government announced plans to build national AI innovation platforms with four partnering companies (in Chinese). Tencent’s AIMIS was chosen as the technology for the national AI diagnostic medical imaging platform. With a government endorsement in hand, AIMIS looks to be the first choice for hospitals in selecting an AI diagnostic medical imaging service.

Money is no object

Tencent is also investing heavily in local and international health and medical startups offering a gamut of innovations, from wearable tech to genomics. An unverified estimate (in Chinese) says Tencent has invested RMB 20 billion in medical startups since 2014 when the internet giant made its first medical startup investment in medical portal DXY for $70 million.

TechNode compiled the available information on 36 of the local and international health and medical companies who have received Tencent investments between 2014 and 2017. 14 out of 36 (40%) startups fall under the medical O2O category, which provides services such as online consultation, doctor and clinic directories, and appointment booking. This is followed by health monitoring startups, 6 out of 36 (17%). These startups provide solutions such as wearable tech and fitness apps to track users’ vitals and other measures. Companies offering genetics solutions are not far behind, at 5 out of 36 (14%).

The Tencent Investment team declined to comment on the company’s medical investment strategy. However, the high proportion of medical O2O startups shows Tencent’s focus on the ease of access to doctors and other medical services for users in China, with an eye on frontier innovations such as genomics and AI. The investments are already starting to bear fruits. We Doctor, one of the first batch of medical O2O startups that received Tencent investments, is preparing for an IPO in Hong Kong later this year.

Welcome to the Tencent Clinic

Only one—out of all the health and medical startups that Tencent has thrown money at—has received Tencent naming rights. Tencent Doctorwork (企鹅医生 in Chinese) is a joint venture between Tencent, GAW Capital, Medlinker and Sequoia China, which operates offline medical facilities called Tencent Clinics.

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After learning the Beijing branch had opened recently, we decided it was time to see the doctor. It’s located on the ground floor of the Pacific Century Place in Sanlitun, just across from the Dunkin Donuts. When TechNode visited, a few doctors and nurses had settled in, but it wasn’t very busy.

“We want to create a WeWork model [for clinics],” Tencent Doctorwork wrote in an email to TechNode. “Other than offline, we’ve also created [an app]. This is currently being tested but it aims to help monitor your health such as sleep patterns, exercise, and diet. The other goal [for the app] is the long-term management of patient health and treatment of diseases that they may have.”

The Tencent Doctorwork WeChat public account (still being tested): (r) A dashboard for monitoring your vitals and health stats and (l) automated testing services are available for diabetes and pregnancy

Long term, the company wants to be a healthcare sharing platform based on big data and integration of various quality medical resources. In 2018, Tencent Doctorwork plans to open 60 to 100 Tencent Clinics around China.

Tencent Doctorwork paints a pretty picture, with its sleek new clinics and handy app to make appointments, track vitals and receive health check results. However, the clinics target the high-end private healthcare market. Tencent Clinic’s Chengdu and Shenzhen branches will accept China’s national medical insurance but due to local policy, the Beijing branch does not. Patients need to have private insurance coverage or pay out of pocket.

Business as Usual

Tencent isn’t the only internet company making in-roads into the medical industry. Rival Alibaba has been offering guahao and medical bill payment on Alipay. Its medical arm Ali Heath tried—and retired—a TMall pilot program to sell and deliver over-the-counter drugs. Ali Health’s AI diagnostic system DoctorYou was launched before Tencent’s AIMIS but has yet to see as wide an adoption. Other companies are also working on AI diagnostic imaging, such as iFlytek.

While Tencent is helping to make the Chinese medical system more efficient, the ultimate boon for the technology firm is providing services to a lucrative healthcare market spurred by China’s aging population and higher prevalence of chronic diseases such as obesity due to the change in lifestyles.

Pony Ma appearing at the 2017 Fortune Global Forum. (Image credit: Visual China Group)

“I feel people are talking about AI as if it’s far out in the future, but I think in the medical field it’s an early and easy adoption, and it affects everyone,” Pony Ma explained at the 2017 Fortune Global Forum (in Chinese).

“The medical industry could be worth hundreds of billions yuan in the future. We’re only at the beginning now,” Ma said.