Home Who Profits from Online Consultations Priced at Thousands of Yuan? Internet Healthcare Platforms Reassess Monetization Strategies

Who Profits from Online Consultations Priced at Thousands of Yuan? Internet Healthcare Platforms Reassess Monetization Strategies

Feb 25, 2023 08:00 CST Updated 08:00
JD Health

Internet Medical and Health Service Platform Provider

Offline, consultation fees at high-end medical institutions range from several hundred to several thousand yuan, covering physician consultations and attentive hospital services.


Would you be willing to spend several thousand yuan on a brief video or phone consultation with a doctor online?


One notable trend is that, as the wave of widespread free online consultations recedes over the past few years, internet healthcare platforms are refining their fee-charging mechanisms: while charging fees has become commonplace, multi-tiered pricing strategies are being explored. Consequently, the upper limit for consultation fees, which previously hovered around a few hundred yuan, has risen to thousands of yuan or even several thousand yuan.


At this point, we cannot help but ask: Can a more flexible pricing mechanism make consultation fees one of the profit models for internet healthcare?


The Era of Fees Returns, “Ceiling"Elevated"


As the impact of the pandemic wanes, major internet healthcare platforms have largely discontinued large-scale free consultation services subsidized by physician payments.


A review of major platforms reveals that most still maintain sections for free clinics or low-cost consultations, but on a limited scale: these are either available only on specific dates, offer a limited number of slots, or impose restrictions on the number of times individual users can access the service. Beyond these operational measures, platforms no longer provide large-scale or long-term free consultation services.


For example, in the first half of 2020, more than 90% of JD Health’s online consultations were free; subsequently, the scope of free services was gradually reduced, and by 2022, JD Health had essentially discontinued free consultations.


Meanwhile, physician fees on the platform are more flexible, with the trend of not using physician rank as the sole pricing criterion becoming increasingly prominent.


At WeDoctor, an attending physician in the Department of Reproductive Genetics at Hebei General Hospital charges 300 yuan for text-and-image consultations, a service that remains popular among patients and has generated 15,000 consultations. An attending pediatrician at Kunming Yan’an Hospital, who holds considerable local influence, sets their consultation fee at 198 yuan on the Weimai platform. On various major platforms, some chief physicians from Grade A tertiary hospitals charge as little as ten-plus yuan for consultations.


As internet-based healthcare gains recognition from patients, physicians, and other stakeholders, the “ceiling” for online consultation fees has risen. In the past, consultation fee caps were mostly in the range of a few hundred yuan; today, nearly all major platforms feature top-tier specialists whose consultation fees reach over 1,000 yuan, or even 2,000–3,000 yuan.


At the time of its IPO, Ping An Health disclosed in its prospectus that, in addition to its in-house physician team, it collaborated with external doctors through the “Find Renowned Doctors” program, with consultation fees ranging from RMB 50 to RMB 500 per session. Currently, the number of influential external doctors partnering with Ping An Health has increased, and video consultations with certain specialists now command fees as high as RMB 3,000 per session.


Overall, the once-ubiquitous free and low-cost medical consultations have gradually declined in recent years, replaced by a more tiered fee structure.


In fact, long before the pandemic, internet healthcare providers had already recognized that relying on free consultations for customer acquisition was not a sustainable strategy. However, following the outbreak of the pandemic in 2020, both internet healthcare platforms and public internet hospitals extensively adopted free-service models to cope with the surge in online demand. This move represented a rapid response to market needs and served as the most direct approach to capturing a wave of users under the prevailing circumstances.


Now, the comprehensive return to fee-for-service is not only a sign of the industry getting back on track but also an inevitable step in its development.


With Both Price and Volume Rising, Did the Platform Make a Profit?


Let's look at the data from another dimension:


In 2022, JD Health’s internet hospital recorded over 100 million online consultations throughout the year; as of the first half of 2022, Ping An Health had accumulated a total of 1.311 billion consultations; and as of March 2022, AliHealth was handling an average of 300,000 online consultations per day...


Not only these companies, but also some specialized internet medical platforms and the internet hospitals of physical medical institutions are experiencing growth in service volume.


During the large-scale free service phase, platforms were required to subsidize physicians on a per-consultation basis, with higher patient volumes leading to greater losses. Now that paid consultations have returned, featuring substantial price caps, and coupled with growth in consultation volume, can online consultations deliver substantial returns for internet healthcare?


To answer this question, let us first understand the pricing and revenue distribution principles for consultations on internet healthcare platforms.


Typically, for specific products launched by the platform with relatively fixed pricing, doctors accept or “grab” consultation requests; whereas for general consultations, physicians primarily set their own fees, with the platform only providing alerts or recommendations for prices that are excessively high or low.


图片1.png 

Common Types of Online Medical Consultations, Source: Public Information


At most companies, the platform shares consultation fees with doctors. The platform typically takes a commission of around 20%–30%, while doctors receive the majority of the remaining revenue. The specific revenue-sharing ratio varies depending on the doctor’s professional competence, specialty, seniority, and reputation. Doctors who make outstanding contributions in dimensions such as medical expertise, patient influence, patient volume, and patient reviews may earn a higher share of the revenue.


Some companies also charge separate fees in addition to consultation fees. For example, since April 2022, Haodf Online has been charging a platform service fee ranging from RMB 6 to RMB 20, based on the amount of platform resources consumed by different consultation formats, including text-and-image, telephone, and video consultations, while the entire consultation fee is paid to the physicians.


Based on the aforementioned standard pricing mechanisms and revenue-sharing principles, theoretically, the platform’s revenue would correspondingly increase as the number of charging physicians and their fee levels rise.


Let us now examine the company’s revenue performance.


Currently, Ping An Health, JD Health, and Alibaba Health have not disclosed revenue from online consultations in their latest financial reports, indicating that such revenue still accounts for a very small proportion of their total income. Most other companies that have released financial data also noted that revenue from consultations is negligible.


Recently, Wang Hang, founder and CEO of Haodf Online, revealed that revenue from platform service fees has been growing steadily since 2022. The company is also expanding its membership services for B-end clients such as enterprises and insurance companies, and expects to break even in 2023.


Overall, the contribution of online consultation revenue remains limited at this stage. There are still many factors influencing the transition from comprehensive fee implementation and an elevated “ceiling” to service volume growth and the ultimate realization of revenue.


For example, on certain platforms, if a patient has a clear need for follow-up visits and medication purchases, the resulting consultation and prescription services are provided free of charge, meaning this volume of services does not generate consultation revenue.


For another example, physicians who charge high consultation fees have limited time and energy, making it impossible to productize and scale their consultation services.


A thoracic surgery specialist in Jiangsu Province charges RMB 1,000 for a text-and-image consultation on an internet healthcare platform (with each consultation lasting two days) and RMB 1,100 for a 15-minute session. He stated that online consultations primarily involve reviewing patients’ QR code images, electronic link-based images, or DICOM digital imaging files. For each patient, particularly those with pulmonary nodules, it typically takes about one hour of continuous review to generate screenshots, annotations, and written diagnostic analyses and management recommendations. Additional time is also devoted to follow-up communications after the initial response. Overall, the total time spent per patient amounts to approximately 1.5 hours. Due to a busy offline clinical schedule, he can only accommodate two new online patients per day.


In other words, although this segment of consultation services commands a high unit price, the patient volume is low, making it difficult to achieve scaled revenue.


Nevertheless, the comprehensive charging for medical consultations, along with more flexible and multi-tiered pricing, is indeed a welcome change and trend, whose significance extends beyond revenue itself.


Low Profit Margins: Why It’s Still Essential to Proceed


Purely B2C services alone are insufficient to sustain overall revenue, a challenge long recognized within the industry. Nevertheless, major platforms continue to spare no effort in investing in and building medical service resources, while exploring diverse revenue models.


First, the most direct reason is, of course, to cover operating costs as much as possible, thereby building the confidence and capacity to explore more business models., particularly B2B businesses that can rapidly and steadily increase revenue scale.


Secondly, a reasonable pricing mechanism combined with a well-structured product system can facilitate patient screening and stratification, thereby achieving better matching of physician resources.


Even in the online space, medical resources remain limited, and renowned specialists are particularly scarce. As internet-based healthcare services become widely monetized, users are unlikely to initiate consultations for trivial issues. With a more clearly tiered pricing structure, patients with common conditions will most likely choose physicians charging tens of yuan rather than spending hundreds or even thousands of yuan on a phone call or video consultation with a well-known expert.


According to corporate feedback, during the initial phase of implementing full-fee charging or separately collecting platform service fees, consultation volumes did indeed decline; however, over time, consultation data gradually recovered.


In this way, patients with genuine and varying degrees of need are identified and stratified, achieving a better match between resources and demand.


Meanwhile, a multi-tiered fee structure enables more physicians to find their niche on internet healthcare platforms.


Internet healthcare often discusses “transparent income.” Indeed, reasonable compensation is one of the key factors in attracting physicians to join internet healthcare platforms; however, there is no fixed standard for defining what constitutes “reasonable.”


When a physician advances their clinical skills, enhances online communication abilities, and garners widespread patient acclaim, they can raise their consultation fees to reflect their professional value. Conversely, if a physician sets high fees but attracts no patients, they should reflect on whether they are sufficiently appealing to patients.


For internal medicine conditions that require substantial time and extensive review of medical records, physicians may set relatively higher fees to provide patients with comprehensive and practical treatment recommendations. Conversely, for conditions primarily managed through surgery or where key treatment phases occur offline with limited online intervention capabilities, physicians may set relatively lower fees to attract patients and focus on preoperative consultations.


It is only “reasonable” for doctors to derive varying benefits and gains from the platform, thereby attracting more physicians to join.


Ultimately, the value of platform services and the essence of healthcare are realized.


While these two terms may seem abstract, they must ultimately be grounded in practical implementation. Fee structures that clearly itemize charges for physician consultations and platform services separately represent one pathway for the platform’s commercialization efforts, while also directly demonstrating the value of platform services to all stakeholders. For companies currently reliant primarily on pharmaceutical revenue, the “medical” designation within internet healthcare necessitates that platforms focus their efforts on core medical services.


What More Must Platforms Do to Make Consultation Fees Worthwhile?


It is worth noting that the original intent of this article was not to suggest that online medical consultation fees have become comparable to those of offline high-end medical services. After all, across major platforms, mass-market pricing remains the mainstream; even for renowned specialists, high fees are still largely concentrated in the range of several hundred yuan.


Our primary aim is to explore the industry significance of consultation fees. Regardless of whether patients pay a few yuan or several thousand yuan, how can we ensure that patients receive greater value for their money, while doctors and platforms feel more confident and justified in their earnings? Beyond the issues of compliance, quality, and safety that have been frequently discussed before, let us examine a few additional points.


Recently, a urologist at Beijing Chaoyang Hospital, when discussing internet-based healthcare, suggested establishing a “tiered collaboration” model between online and offline services. For instance, when a specialist in Beijing consults with patients in remote areas, a local offline assistant could be assigned to help ensure that the specialist receives more accurate information, thereby enabling safer and more effective diagnosis and treatment.


Conventional wisdom holds that internet-based healthcare improves physicians’ efficiency. However, in its communications with clinicians, VCBeat has repeatedly heard a different perspective: patients vary widely in health literacy and communicative competence, and most lack a medical background; as a result, online consultations often reduce efficiency. Senior physicians, who manage more complex cases and face heavier workloads, are particularly acutely aware of this issue.


Currently, most platforms have integrated tools such as pre-consultation triage and AI-assisted diagnosis to help physicians obtain patient medical records more efficiently. However, in scenarios involving follow-up assessments of disease progression or complex clinical situations, the role of offline assistants may prove more effective.


Public hospitals do not lack patients; however, physicians’ desire to identify more precise patient matches online remains the primary driver for a large number of doctors joining internet healthcare platforms. While expanding their offline presence, these platforms have acquired users by having patients scan physicians’ QR codes. At the same time, they must also consider how to establish sustainable channels for screening and referring precise patient matches to physicians.


Acquiring more precise patients through online and offline public domain traffic generation, and tapping into various scenarios such as pharmaceutical retail, health checkups, and primary care, will remain a perennial theme in the industry.


Overall, the charging of consultation fees is one of the manifestations of the industry's foundational capabilities. If services provided to individual patients are not recognized, then the entire industry will lose its foundation.


In recent years, policy incentives and growing demand have driven a short-term surge in the user base. If the number of patients and consultation volumes during this phase reflected users’ recognition of the industry, then going forward, whether users are willing to pay for services—and how much they are willing to pay—will become the new benchmark for their recognition of the industry and of specific platforms.