Dusheng Tech Files for IPO: Betting on Specialized Insurance for Patients with Pre-existing Conditions

Have Health Insurers Committed to the Integration of “Pharmaceuticals, Healthcare, and Insurance” Found a Way Out?

In recent years, the insurance industry, which has been under pressure from both sales and service dimensions, seems to have found a new path in the health insurance market. Companies are increasing their investments to seek another performance growth point through innovative health insurance models that integrate medicine, pharmaceuticals, and insurance.

However, the innovative health insurance model integrating “medicine, pharmaceuticals, and insurance” places rather “stringent” demands on insurers’ core capabilities. It requires insurers to possess a vast existing customer base, as well as the ability to integrate medical and pharmaceutical services. Furthermore, they must demonstrate considerable internet-oriented thinking and technological prowess in their user service support systems.

In recent years, although the health insurance market has expanded rapidly, a closer look reveals that traditional products such as million-yuan medical insurance and long-term critical illness insurance still dominate the landscape. How effective are truly innovative health insurance models? Has the integration of healthcare, pharmaceuticals, and insurance proven viable? While each market participant promotes its own narrative, outside observers remain hesitant and uncertain, leaving the answers far from clear.

Yet China’s vast population and the immense market demand it represents continue to draw countless industry professionals, who, armed with their own insights and experiences, are committing wholeheartedly to entering the fray.

Among them was Yang Jianchun.

On an ordinary morning in 2021, as the rising sun cast its usual glow over the Forbidden City, Yang Jianchun made a decision that appeared unusual to outsiders—leaving Baidu Headquarters to wholeheartedly embark on the next chapter of his entrepreneurial journey in healthcare.

Several months later, the logo of a company named Dusheng Technology appeared in a technology startup park in Shanghai.

Yang Jianchun has entered the healthcare startup ecosystem, bringing with him years of experience in internet-based healthcare and his insights and solutions on the integration of pharmaceuticals, healthcare services, and insurance.

“A great company must be dedicated to solving social problems,” said Yang Jianchun.

From a practical standpoint, the positioning of China’s national medical insurance as providing “basic coverage” is firmly established. Based on this positioning, basic medical insurance adequately ensures the affordability of essential medical services for individuals and alleviates the financial burden on residents for such services. However, beyond the scope of basic medical insurance and above individual-specific medical needs, the out-of-pocket medical expense burden is gradually increasing. This is because, in the context of health and survival, there is no upper limit to individuals’ demand for medical and health services.

Therefore, as a secondary payment mechanism, commercial health insurance has borne the expectations of various stakeholders since its inception.

Meanwhile, relevant policies have been continuously strengthened. From the “Opinions on Deepening the Reform of the Medical Security System,” known within the industry as “Document No. 5,” to the General Office of the State Council’s 2022 Document No. 14, “Key Tasks for Deepening the Reform of the Pharmaceutical and Healthcare System in 2022,” all emphasize the need to fully promote the development of commercial health insurance and facilitate the construction of a multi-tiered security system.

The growing emphasis on commercial health insurance is evident.

However, health insurance, which has been pinned with high expectations, also faces development pain points: Who are the users? How can products be developed into a systematic framework? How can services be integrated? How can costs be controlled?

Yang Jianchun discovered that the biggest demanders of commercial health insurance are not receiving the attention and service they deserve. Current health insurance products primarily target healthy individuals. As for non-standard risks, they are either directly excluded, subject to higher premiums, or have their benefits restricted.

Therefore, in a sense, compared with the healthy population, substandard risks appear relatively disadvantaged when facing the current commercial health insurance market. However, it is precisely these “vulnerable groups” who are the ones with genuine demand.

According to Yang Jianchun, individuals with non-standard health profiles can be categorized into three groups based on their health status: those at high risk due to abnormal indicators, patients with mild conditions, and patients with confirmed severe diseases. "High risk due to abnormal indicators" refers to cases where certain test results are abnormal but have not yet progressed to a disease state, such as the relationship between large-sized non-invasive pulmonary nodules and lung cancer. "Mild conditions" refer to cases that have entered a disease state, such as benign tumors or carcinoma in situ. "Severe pre-existing conditions" refer to serious disease states, such as cancer and severe sequelae of cardiovascular and cerebrovascular diseases.

From a demand perspective, patients with mild conditions prioritize comprehensive service guarantees that can halt disease progression or even improve outcomes, while those with severe conditions seek effective treatment and symptom relief. However, in practice, industry stakeholders’ exploration in this field remains in its early stages, with limited effectiveness achieved so far.

Moreover, constrained by the mismatch between traditional insurers’ capabilities in areas such as medical technology accumulation, risk management methods, actuarial experience for product development, and talent structure, and market demands, the entire commercial health insurance market for individuals with pre-existing conditions remains in its early stages.

The so-called innovative model of health insurance coverage plus services—whether providing green channels for medical care, appointment registration and consultations, specialized drug services, or rehabilitation nursing and chronic disease intervention—inevitably leads to product and service homogenization. This also makes the integration logic of “medicine-pharmaceuticals-insurance” appear somewhat crude, with a lingering sense that “medical care” remains merely medical care and “insurance” remains merely insurance.

“The needs of individuals with pre-existing conditions are ‘to cure my illness’ rather than ‘to receive compensation,’ yet our insurance industry remains stuck at the mere payment stage when addressing such needs,” lamented Yang Jianchun. “Commercial health insurance is still too far removed from medical care.”

So, how does this CEO, who previously oversaw internet hospital operations at WeDoctor and Baidu Health, plan to bridge the gap between “insurance” and “healthcare” and integrate them?

“I aspire to be the connector between commercial health insurance and healthcare services, enabling commercial health insurance to truly address relevant medical issues,” said Yang Jianchun.

As previously mentioned, commercial health insurance currently faces two challenges: first, insufficient coverage for individuals with pre-existing conditions; and second, a significant disconnect from medical care.

In response, Dusheng Technology is determined to build a technology platform dedicated to disease-specific insurance solutions. The term “disease-specific insurance” is used here as a broad concept, referring either to health insurance products targeting a single stage—such as prevention, diagnosis, or prognosis—of a particular disease, or to comprehensive health insurance products that cover the entire continuum of care, including prevention, diagnosis, and rehabilitation.

In summary, Dusheng Technology aims to tailor optimal solutions for patients and address the question of “whether a cure is possible.” In this process, it provides insurers with the most effective clinical pathways to enable value-based payment models that tackle cost containment, while offering public hospitals a secondary payment channel outside of basic medical insurance.

Specifically, Dusheng Technology not only collaborates with pharmaceutical companies and medical device manufacturers to provide patients with cutting-edge, high-quality drugs and medical devices, but has also established its own pharmacy network covering 80,000 pharmacies to deliver pharmaceutical care and certain chronic disease management services. Furthermore, the company is currently building its own rehabilitation nursing and health management service teams to provide corresponding health management services to patients.

Furthermore, Dusheng Technology will collaborate with physicians at public hospitals to build their personal brands and engage them in comprehensive, whole-course patient management.

In other words, across the entire continuum—from pharmaceuticals and medical devices to post-hospital rehabilitation, nursing care, and chronic disease management—Dusheng Technology connects all stakeholders involved in building an integrated healthcare-pharmaceutical-insurance ecosystem, including pharmaceutical companies, medical device manufacturers, pharmacy networks, and physicians, to deliver comprehensive, disease-specific solutions for patients.

Currently, Dusheng Technology has launched its first disease-specific insurance product targeting cartilage injury. This product integrates internationally leading cartilage regeneration and repair technologies and medical consumables, providing patients with exclusive efficacy insurance and rehabilitation management to alleviate their concerns.

In fact, Dusheng Technology’s strategic approach to customizing optimal solutions for patients carries strong connotations of value-based healthcare.

In 2006, Michael Porter, a professor of management at Harvard Business School, proposed the concept of value-based healthcare, which is generally understood as achieving greater health outcomes per unit of healthcare spending.

Yang Jianchun believes that in most medical solutions, the evaluation criterion is whether the current treatment regimen achieves the outcomes required by clinical practice guidelines. In contrast, value-based healthcare enables patients to restore their functional capacity through comprehensive, whole-course disease management solutions. This functional capacity can be quantitatively assessed using more than 30 metrics. Only when these standards are met can patients be considered truly cured, successfully reintegrated into society, and able to live with dignity.

Dusheng Technology is committed to leveraging its specialized disease-specific insurance technology platform to connect stakeholders across the healthcare industry, providing patients with high-quality medical solutions and innovative payment options. This approach not only benefits patients but also empowers insurance companies, pharmaceutical manufacturers, pharmacy networks, medical device vendors, and healthcare professionals.