Digital Healthcare Drives Integrated Medical Service System: Two Offices' Policy Unveils Three Major Opportunities
“The Digital Medical Consortium” is emerging as a new competitive arena where the healthcare industry is racing with full force.
Recently, the General Office of the Communist Party of China Central Committee and the General Office of the State Council issued the “Opinions on Further Improving the Healthcare Service System” (hereinafter referred to as the “Opinions”), which set forth the goal of establishing a high-quality, efficient, and integrated healthcare service system by 2035, and explicitly stated that “privately operated medical institutions may take the lead in forming or participate in medical consortia.”
It is evident that, with the conclusion of the Two Sessions, this “Opinion” serves as a critical roadmap for healthcare system reform over the next decade and more, acting as a bellwether guiding the entire industry. The full text of the “Opinion” went viral on social media, becoming one of the few major policies to draw joint attention from both the industry and the investment community.
It is worth noting that the “Opinions” mention “medical consortiums” and “medical communities” a total of 16 times, a frequency rarely seen in previous comprehensive reform policy documents. This underscores the high priority placed on this organizational model at the level of China’s top-level institutional design.
As the primary form of an integrated healthcare system, future-oriented Medical Consortiums must be driven by digitalization and intelligence. This trend harbors immense industrial opportunities, including deep participation in the construction of Medical Consortiums and specific scenarios derived therefrom, such as digital chronic disease management and the integration of basic medical insurance with commercial health insurance. These represent key entry points for industry commercialization.
Currently, leading digital health platforms in China, such as WeDoctor, are actively expanding their presence, with typical models of digitized regional medical consortia—such as Digital Health Communities and Chronic Disease Medical Alliances—gaining significant prominence. With the release of the “Opinions,” industry momentum is expected to surge further, attracting more industrial capital into specialized sectors of the market.
Deloitte’s “Analysis Report on China’s Healthcare Services Industry” posits that the market for healthcare services in China is substantial and expanding rapidly, driven by factors such as population aging, urbanization, wealth growth, and the basic medical insurance system. “The deepening of the new healthcare reform has created opportunities for social capital to enter the healthcare services sector, while also profoundly reshaping the market landscape.”
From this perspective, the development trajectory and industry opportunities of China’s digital health sector closely align with efforts to address weaknesses in the healthcare delivery system and the core requirements of the new healthcare reform policies.
It is widely recognized that a fragmented and disjointed healthcare service system is one of the primary causes of low efficiency in medical and nursing services in China. This issue is particularly pronounced as the country enters an era of population aging, making it increasingly difficult to meet the healthcare needs of the population, which are predominantly driven by chronic diseases.
In recent years, China has successively issued several important documents, including the Guiding Opinions on Promoting the Construction of a Tiered Diagnosis and Treatment System, the Guiding Opinions on Promoting the Construction and Development of Medical Consortia, and the Implementation Opinions on Deepening the Reform of the Pharmaceutical and Healthcare System by Further Promoting the Experience of Sanming City, Fujian Province. These initiatives aim to advance the tiered diagnosis and treatment system and build an integrated healthcare service system centered on health. Regional medical consortia and medical communities have become key mechanisms for implementing these objectives.
The “Opinions” summarize the tremendous impact of the three-year pandemic on China’s healthcare service system, as well as the practical experience gained from systematically addressing weaknesses during this period. On this basis, they reaffirm the overall development direction of China’s healthcare sector: “By 2035, establish an integrated healthcare service system that is aligned with the basic realization of socialist modernization, featuring a complete structure, clear division of responsibilities, complementary functions, continuous coordination, efficient operation, and strong resilience.”
The goal has been set, and how to implement it has become the key; the role that digital health can play is drawing attention.
In this regard, Xiao Hongliang, Senior Research Manager at IDC China, analyzed that it is essential to improve the medical and health service system and develop “Internet + Medical Health.” “Internet + Medical Health” can optimize the allocation of medical resources, promote the modernization of medical and health capabilities, facilitate tiered diagnosis and treatment, and advance the integration of the healthcare system.
The EY consulting team believes that the future development of internet healthcare can transcend traditional telemedicine services and transition toward a comprehensive health management model. By centering on clinical diagnosis and treatment while extending outward, this approach shifts from a passive medical model focused on “treating illness when it occurs” to one in which citizens proactively engage in holistic health management.
In terms of the overall arrangement of the “Opinions,” on the one hand, it continues the policy-level encouragement for the digital healthcare industry, requiring the leveraging of information technology support to develop “Internet + Healthcare.” On the other hand, it clarifies that “socially funded medical institutions may lead medical consortiums,” outlining an “integrated” development path for digital healthcare. This path focuses on “expanding high-quality medical resources and achieving balanced regional distribution, while strengthening weak areas such as public health and primary care services,” and aims to shift from a passive medical model of “treating diseases when they occur” to proactive national health management.
Data shows that the global digital health market was valued at $211 billion in 2022 and is projected to expand to $809.2 billion by 2030, with a compound annual growth rate (CAGR) of 18.6% from 2023 to 2030. China has consistently remained one of the most promising and significant markets.
However, under the new normal of economic development, the original digital health business model struggles to sustain the industry’s rapid growth due to multiple factors, including an overall slowdown in economic growth, a bottleneck in internet penetration rates, and cost-containment measures in the healthcare sector. The new market opportunities created by the “Opinions” are expected to provide substantial support for the fundamental base of the digital health industry.
Overall, the three major opportunities brought to the industry by the “Opinions” are most worthy of attention:
First, the Digital Medical Consortium. As previously mentioned, the "Opinions" explicitly state that "socially funded medical institutions are supported to take the lead in establishing or participating in medical consortia." This signifies policy support for new types of digital, socially funded medical institutions to engage in the construction of integrated healthcare service models. Consequently, building a "Digital Medical Consortium" driven by digitalization has become the main strategic direction for the industry.
Secondly, digital management of chronic diseases. Data shows that chronic disease expenditures account for approximately 70% of China’s total health spending. As the population ages further, these costs are likely to continue rising. Consequently, it has become an industry trend to provide patients with chronic conditions with healthcare services covering their entire life cycle at controllable costs. The “Opinions” mention strengthening the health management of major chronic diseases, coordinating chronic disease management, rehabilitation, and nursing services for the elderly, and exploring the establishment of joint chronic disease clinics by primary healthcare institutions and higher-level medical facilities.
Third, innovation in diversified payment methods. Payment method reform is the core driving force for improving the healthcare system. The "Opinions" emphasize the need to improve diversified and composite medical insurance payment methods, and to "explore global budgeting for tightly-knit medical consortia, strengthen supervision and assessment, and implement a mechanism where savings are retained and reasonable overspending is shared." This requires the industry to accelerate the innovation of payment methods centered on health and primarily based on value-based payment, and to form more diversified financing and payment models, which is the core lever for building an integrated healthcare system.
Equally important, the “Opinions” have deepened systemic and mechanistic reforms in multiple areas—including government funding mechanisms, staffing and personnel systems, and compensation structures—while advancing scientific governance, thereby removing obstacles and alleviating concerns regarding the large-scale promotion of digital integration within medical consortia in the digital health industry.
The core growth drivers of digital healthcare are “demand and policy.” In recent years, as policies related to digital healthcare have been progressively streamlined and the pandemic has accelerated public acceptance of online services, the digital healthcare industry has continued to reshape its landscape.
For instance, with the deregulation of online prescription drug sales and the outflow of prescriptions from hospitals, pharmaceutical e-commerce models represented by Ali Health and JD Health, as well as new DTP pharmacy formats represented by Yuanxin and Sipei, have developed rapidly. Moreover, guided by regulatory policies that both encourage and restrain market activities, these sectors have continuously adjusted their market directions, achieving sustained growth in market scale and benefits.
As the state progressively standardizes the development of internet healthcare and mandates a return to “serious medical care,” coupled with the “ice-breaking” inclusion of internet diagnosis and treatment into medical insurance coverage, the digital hospital model exemplified by WeDoctor—characterized by an organizational structure of “internet hospitals + physical hospitals” and integrated online-offline services—has had its viability clearly demonstrated.
Prior to the release of the “Opinions,” WeDoctor had already explored a digital health community model that leverages digital hospitals to lead the development of medical consortia and strengthen chronic disease management services. This approach has emerged in Tianjin, Shandong, and other regions as a breakthrough innovation model through which digital healthcare promotes the improvement of regional medical and health service systems, drawing significant attention from the industry.
For example, Tianjin introduced the localized digital hospital—Tianjin WeDoctor Internet Hospital. Under the guidance of the Tianjin Municipal Health Commission and the Tianjin Municipal Healthcare Security Administration, it took the lead in collaborating with 266 primary healthcare institutions across the city to establish a citywide close-knit digital medical consortium, namely the Tianjin Primary Digital Health Community.
After two years of operation, the Tianjin Primary Care Digital Health Consortium has completed the construction of a three-tier system for primary healthcare services. First, it established a digital and intensive service system, known as the “Four Clouds” platform, which improved the efficiency of primary care resource utilization. Meanwhile, it built a standardized and integrated service system, namely the Chronic Disease Management Center, enhancing the capacity of primary healthcare services. Furthermore, it implemented a performance-based payment health accountability system, adopting disease-specific and capitation payment models, thereby boosting the motivation of primary care physicians.
Data show that, as of December 2022, Tianjin’s Primary Care Digital Health Community had signed chronic disease management cooperation agreements with 204 primary care institutions and seven secondary hospitals, and was progressively co-establishing chronic disease management centers. Over 1.68 million patients had been enrolled in health records for management, and more than 110,000 diabetic patients had been contracted into groups and included in the health stewardship responsibility system for outpatient special care services for diabetes. In pilot primary care institutions, the standardized management rate for diabetic patients reached 81.5%, and the blood glucose control rate improved by over 12.1 percentage points. While demonstrating significant social benefits, the Digital Health Community is also beginning to unlock its market potential.
Han Qide, Former Vice Chairman of the National Committee of the Chinese People’s Political Consultative Conference and Academician of the Chinese Academy of Sciences, pointed out after investigating the effectiveness of Tianjin’s grassroots Digital Health Community that Tianjin’s practice demonstrates the strong determination of government departments to advance healthcare reform. By focusing on addressing the key needs of primary care and disadvantaged populations, while balancing efficiency and equity, it has set a benchmark for healthcare system reform.
As a significant industry exploration in building an integrated healthcare system, the “Digital Medical Consortium,” led by digital hospitals, has achieved alignment of multi-stakeholder interest mechanisms. It has not only strengthened the service capacity of the healthcare delivery system but also fully mobilized social resources and technological capabilities, becoming a key variable driving industry upgrading. In this process, industry practices and national policies have mutually reinforced and promoted each other, creating a decade-long window of development opportunities for digital health.