Dr. Jiang would usually be busy over the Lunar New Year, jabbing patients with acupuncture needles for aches and pains. This year, she was able to oversee her son’s homework and make a few hundred dumplings. The beds on the eleventh floor of her hospital, in Shiyan, Hubei province, were empty—except for the patient in the coma.
Unless they are truly desperate, people are steering clear of hospitals. Even those with flu-like symptoms don’t make the hospital their first port-of-call. Instead, they headed online. Online medicine platforms like JD Health saw respiratory-related queries surge tenfold. JD Health general manager Xiao Junbo said they saw five to seven times as many consultations from people worried about their mental health.
JD Health rivals tell the same story—steep uptakes in consultations. Alihealth reported that its first 24 hours of launch on Jan. 25 saw around 400,000 visits to its homepage. It fielded an average (in Chinese) of 3,000 consultations per hour. Newly registered users increased tenfold for Ping An Good Doctor, which also reported 1.1 billion visits during the outbreak period. Dingxiang, another online consultation provider, reported over 1 million consultations as of Feb. 20.
Industry insiders say a 2018 nod from Premier Li Keqiang was better than any subsidy.
The virus has also pushed regulators to act. For this period, the state insurer now allows prescriptions and consultations handled by designated online platforms to be reimbursed under medical insurance. Previously, they were not covered.
More than two hundred public hospitals opened their own online consultations. In a set of opinions released jointly by the top Party and government bodies on March 5, all the signals (in Chinese) point to online healthcare becoming a big part of ongoing healthcare reform.
Health care is a trillion-dollar market (in Chinese) in China. Put together, tech companies and other established online health care players have just 4% of market share, said a JD Health employee.
That’s not for lack of government resolve. China wants a more efficient, cheap healthcare service enabled by 5G and new tech. But there is not yet a consensus on the precise form the full gamut of e-services should take and what kind of safeguards are necessary to ensure online services solve more problems than they make.
When 2014 regulations created a framework for online healthcare, players rushed in. Investors also loved the industry: at one point there were over five thousand players (in Chinese). By 2017, over a thousand of those were in the online medicine graveyard.
A boost came the following year, when Premier Li Keqiang mentioned online hospitals in a high-profile speech. His nod-from-above reassured doctors that if they participated, they would not get into trouble. Industry insiders say that was more helpful than any subsidy.
Covid-19 has given online medicine platforms a leg up in consumer awareness.
The 2018 retooling of China’s bureaucracy drove drug companies to drug-selling platforms. Previously these companies sold directly to hospitals. This arrangement allowed hospitals to negotiate directly with drug companies, leaving space for kickbacks and corruption. The newly centralized public medical insurance system moved to bulk buy to lower costs for public hospitals. Drug companies that lost tenders were in desperate need of additional sales channels, and many started selling online for the first time.
Once the outbreak ends, online healthcare providers will be watching closely how the government will decide to manage online prescriptions, e-medical records, and online insurance. While all of these have had regulatory mentions, there is not a centralized platform for them all. If the government manages to set standards for these services, it could quicken an online migration of health care service chains.
Medical insurance doesn’t cover all drugs bought from private online platforms, and it’s unlikely this will change completely. A gradual roll-out, first covering chronic illnesses like diabetes, and high blood pressure is more likely, said one industry insider, and would still be a boon to online sales.
Too few doctors
Covid-19 has given online medicine platforms a leg up in consumer awareness. But users may not be the biggest hurdle.
Run out of shirts and you can source more, but that doesn’t apply for doctors.
“A difficulty faced by every player in the healthcare industry is that qualified doctors are in short supply,” a healthcare investment professional told TechNode. The more doctors platforms have (particularly famous ones), the more patients they can attract, and the more they can treat.
Online healthcare players will not sweep away the old system any time soon.
Online platforms want to take on full-cycle treatment, with educational public health videos, preventative advice, initial online consultations, hospital referrals, and offline treatment if you really need it. JD Health’s initiative led by star cardiologist Hu Dayi is the prime example. Tencent and Alibaba are already buying up brick-and-mortar hospitals. Beyond regulation, the race is likely to come down to supply.
They are up against brick-and-mortar hospitals, possessive of their staff. A Shanghai-based medical professional told TechNode that they’ve seen doctors quit Ping An Good Doctor out of fear of consequences at their hospital days jobs. After hospital administrators asked them to fill out a form confirming whether they would work for the platform, two doctors known to the source took it as a warning and stopped.
Online healthcare players will not sweep away the old system any time soon. For one, Covid-19 has disproportionately affected the old and frail—the proportion of the population least likely to use apps. Resources are still concentrated in hospitals, and the rural-urban health gap remains.
“Online consultations definitely have value, if only to point people towards higher-level care in severe situations. But the challenges of access, quality, and availability still remain,” said Pei Hao, a Beijing-based global health expert.
Doctors who spoke to TechNode also described problems with online consultations, mentioning issues of patients presenting only the symptoms they considered important, or self-diagnosing by reading descriptions online. Patients, on the other hand, are worried about fake doctors.
Platforms, however, can bolt on new efficiencies and expand private healthcare. A former senior manager at AliHealth told TechNode that “the government will stay the largest player [in healthcare], but a lot is possible at the periphery.” He expects new players, established pharmaceutical companies, pharmacies and foreign hospitals will enter the market as rival players in years to come.
A JD Health employee said “even focusing on a single district or city gives a small company enough to bite off.” E-retail companies may find they do not define healthcare, as they do markets like beauty and electronics, but they do not need to, simply because the need is so big.