Decoding Fosun Health: Building the Third Model of Internet Healthcare

During the development of internet healthcare, two major forces have gradually emerged: internet healthcare companies that independently establish internet hospitals, and physical hospitals—primarily public hospitals—that digitize their medical services.

Internet healthcare companies excel in online services and user operations, but they have weak capabilities in mobilizing offline resources and lack sufficient physical medical institutions to meet the demands of online patients; public internet hospitals have more abundant offline service resources and can form a closed-loop system of online and offline services within their own hospital systems, but hospitals remain relatively independent from one another.

Both have distinct advantages and respective shortcomings. Currently, collaborations between internet healthcare companies and public internet hospitals are increasing to achieve complementary strengths.

Meanwhile, is there a model that integrates the advantages of both?

At the recently held 6th Future Healthcare Top 100 Conference, Fosun Health unveiled its internet healthcare strategy, which features the integration of numerous advantages from both sectors. In light of this, VCBeat conducted an exclusive interview with Li Shengli, Global Partner at Fosun and CEO of Fosun Health, to provide a unique interpretation of the value of Fosun Health’s business model.

The essence of internet-based healthcare remains medical services, with medical capability being the key component.

Currently, most physicians on internet healthcare platforms are external collaborators. Although these platforms maintain cooperative and dependent relationships with offline medical institutions, the overall level of integration remains low. The ability of online platforms to coordinate with offline medical resources is weak, and many therapeutic services are still delivered offline. These factors have, to some extent, limited the medical capabilities of such platforms.

Public internet hospitals have abundant medical resources, and high-tier hospitals also possess advanced diagnostic and treatment capabilities. However, public internet hospitals are primarily online extensions of their parent institutions’ services, with nearly all operating as “standalone” internet hospitals. There remains significant room for unlocking the potential of their high-quality medical resources.

How Does Fosun Health Strengthen Its Medical Capabilities? An Analysis from Three Perspectives.

First, the onboarding of internal and external physicians and experts not only diversifies service offerings but also enhances the overall level of diagnosis and treatment.

On Fosun Health’s internet healthcare platform, physicians include those from its 18 controlled hospitals (including medical testing institutions) as well as external practitioners. The platform employs an in-house medical and nursing team of 2,500 professionals and collaborates with 200,000 doctors, primarily leveraging the hospital expert resources accumulated through Fosun Pharma’s long-term industry engagement.

In fact, Fosun Health also boasts high-caliber medical teams among its employed physicians. For instance, Foshan Fosun Chancheng Hospital, a Grade 3A hospital, has topped the Ai Li Bi (CBNData) ranking of single-entity private hospitals for four consecutive years. According to VCBeat’s observations on the Fosun Health app, many specialists at Foshan Fosun Chancheng Hospital are available for consultations with short wait times.

“Internal physicians are required to maintain service volumes across both online and offline channels, external physicians cater to diversified product offerings, and external experts can participate in remote consultations.” Li Shengli noted that internal and external physicians have distinct roles and responsibilities, aiming to provide higher-quality services to patients with specialized conditions.

Second, both online and offline operations are strictly managed in accordance with medical quality control standards to ensure the quality of online services.

The recently implemented Detailed Rules for the Supervision of Internet-based Diagnosis and Treatment (Trial) put forward a key principle: Internet-based diagnosis and treatment must rely on physical medical institutions to carry out integrated online and offline quality control. This measure is formulated in response to certain practices that have emerged in the industry, which violate the principles of offline clinical practice and constitute irregular diagnostic and therapeutic behaviors. Such phenomena mainly occur on internet healthcare platforms operated by enterprises, where the “binding” relationship with physical medical institutions is loose, and there is a lack of sufficient awareness and experience in medical quality control.

Fosun Health has been laying out its offline physical hospitals for more than ten years, accumulating a corresponding medical quality control management system with relatively complete regulations; online and offline services are provided according to the same quality control standards to ensure medical quality and safety.

Third, leverage digitalization to amplify the efficacy of high-quality medical resources.

Within its ecosystem, Fosun Health is building an online-to-offline healthcare services ecosystem and developing an internet healthcare platform to achieve synergy in medical resources.

Li Shengli introduced that Fosun Health has initiated the development of capabilities such as Cloud HIS and an Internet Hospital Data Middle Platform, along with private deployment for physical hospitals. Once the system is established, it will enable smart healthcare, patient services, and hospital management for medical institutions; for patients, it will facilitate seamless online-offline cross-hospital consultations through internal and external physician multidisciplinary consultations and remote diagnosis services.

On a broader scale, Fosun Health promotes the decentralization of high-quality medical resources through its digital platform. For instance, to address the shortage of primary care resources, Fosun Health launched the non-profit “Cloud Guardian” platform, which provides village doctors with services such as online learning, online insurance applications, and remote expert consultation guidance. Meanwhile, it offers patients services including remote consultations, remote imaging, and health management.

In fact, from its inception to its recognition and encouragement by policy, internet healthcare has been entrusted with high expectations for promoting the balanced allocation of medical resources. In recent years, the industry has achieved certain results through multi-party exploration, making it more convenient for patients to seek medical consultations online. Currently, internet healthcare can play a significant role in areas such as online patient triage, follow-up consultations and prescription issuance, and pharmaceutical distribution. However, the industry also faces challenges, including insufficient quality of online medical services and inadequate depth of integration between online and offline services, which constrain its development progress.

From the perspective of Fosun Health’s approach to building medical capabilities, it not only focuses on strengthening its own platform-based medical competencies but also leverages the platform to amplify the impact of high-quality medical resources, thereby contributing to the achievement of the industry’s overall objectives.

In healthcare services, medical care, pharmaceuticals, and insurance are all indispensable elements, and internet-based healthcare is no exception.

Internet healthcare companies have generally covered the medical treatment and pharmaceutical segments, but the absence of a payment mechanism has long been a bottleneck for development. On one hand, few internet healthcare platforms are integrated with public health insurance reimbursement. On the other hand, commercial insurance payment models on these platforms have not yet matured, although some enterprises are beginning to collaborate with insurers to launch payment products.

For public internet hospitals, there is greater support from medical insurance payments; however, cost containment remains the overarching trend in medical insurance, resulting in limited room for payment expansion.

Driven by disease diagnosis and treatment needs and the current state of the industry, Fosun Health has achieved coverage across medical care, pharmaceuticals, and health insurance scenarios.

In terms of healthcare, as previously mentioned, Fosun Health has strengthened its medical capabilities through various initiatives, building an integrated online-offline service model.

In terms of pharmaceuticals, Fosun Health also possesses its own unique characteristics.

Backed by Fosun Pharma’s R&D and manufacturing capabilities, Fosun Health has access to abundant pharmaceutical resources. Fosun Pharma boasts a portfolio of leading products in therapeutic areas including metabolic and digestive systems, oncology, anti-infectives, the central nervous system, the cardiovascular system, and hematology. According to its annual report, as of the end of 2021, Fosun Pharma had 64 innovative drugs in its pipeline. Furthermore, Fosun Pharma has deployed home-use medical devices in the respiratory health sector, all of which together constitute Fosun Health’s distinctive supply chain for pharmaceuticals and medical devices.

Meanwhile, Fosun Health has integrated internal and external resources to optimize its supply chain. For instance, it operates physical pharmaceutical warehouses in cities such as Xuzhou and Shanghai, while also sharing inventory with partner distributors through its “online cloud warehouse.” On the retail front, Fosun Health has partnered with Sinopharm Holdings’ retail business. Guoda Drugstore, the largest pharmaceutical retail chain enterprise in China, owns multiple time-honored brands including Guoda Drugstore, Dadesheng, Tianyitang, and Leren Tang, boasting an extensive retail network. Fosun Health will also collaborate with a broader range of chain pharmacy enterprises to jointly build a “pharmaceutical and healthcare” service ecosystem centered on “patient-centricity,” co-creating and sharing value.

In terms of insurance, Fosun Health leverages the insurance business layout under the Fosun Group to innovate payment scenarios for commercial insurance.

Currently, Fosun Health has established partnerships with Fosun United Health Insurance, Pramerica-Fosun Life Insurance, and other entities. Insurance policyholders can access services provided by Fosun Health, including online consultations, offline medical care, and health management. Furthermore, both parties are alleviating patients’ financial burdens through collaborative efforts such as customized product development and pharmaceutical benefit programs.

It is evident that, by covering scenarios across healthcare, pharmaceuticals, and insurance, Fosun Health has built a comprehensive healthcare service system: optimizing medical capabilities serves as the core of disease diagnosis and treatment; providing patients with high-quality and innovative drugs that are affordable and accessible enhances drug accessibility from multiple dimensions; innovating payment methods and health insurance services not only reduces the financial burden on patients but also constitutes a necessary condition for achieving a closed-loop business model.

Medical services and pharmaceutical services are merely isolated components of internet healthcare. As the industry has evolved, single-segment offerings have long ceased to meet patient needs.

VCBeat’s VBInsight noted in its “2021 Internet Hospital Report” that many internet hospitals integrate multiple service offerings, pharmaceuticals and medical consumables, and health consumer products into specialized packages aligned with disease progression and clinical pathways, thereby delivering continuous, specialty-specific care—such as comprehensive disease management service bundles.

From the patient’s perspective, whole-course disease management can enhance adherence to out-of-hospital care, thereby improving overall treatment and rehabilitation outcomes. From the service provider’s perspective, it facilitates timely monitoring of patient status and adjustment of diagnostic and therapeutic plans, while also generating corresponding revenue from services and products. Consequently, such service bundles have become a common model in the industry.

Public internet hospitals are also attempting to implement whole-course patient management; however, public hospitals often face staffing shortages for operations, making it difficult to provide comprehensive and timely management and interventions for patients by relying solely on in-house medical staff.

For internet healthcare companies, online services alone are insufficient; offline laboratory and imaging tests are an indispensable component of whole-course disease management. However, offline services are not the core strength of internet healthcare enterprises. Therefore, whole-course disease management often requires collaboration between hospitals and internet healthcare companies.

For Fosun Health, what kind of integration has been implemented after its strategic layout across healthcare services, pharmaceuticals, and insurance? It is understood that whole-course disease management based on specialized capability building is one of the distinctive features of Fosun Health.

“Specialty services are the core business of Fosun Health,” said Li Shengli. Leveraging Fosun Pharma’s flagship products and the leading specialties of its affiliated hospitals, Fosun Health has established multiple specialty centers covering nephrology, oncology, hepatology, and central nervous system disorders, and has developed corresponding whole-course disease management services.

Taking the co-established chronic kidney disease (CKD) whole-course management program by Fosun Health and the Nephrology Department of a Provincial People’s Hospital as an example, after signing up for the management program, patients can receive services such as reminders for follow-up visits and re-examinations, medication adherence alerts, regular follow-ups, recording and querying of monitoring results, and health assessments, thereby creating personal health records. On the service provider side, Fosun Health’s health management team assists physicians in jointly developing management plans for patients, tracking various health metrics, and providing timely interventions, thus enhancing physicians’ management efficiency.

In the management of thrombocytopenia associated with chronic liver disease and cancer radiochemotherapy, Fosun Health has collaborated with DTP (Direct-to-Patient) pharmacies, including Fosun United Health Insurance and Guoda Drugstore, to integrate medical care, pharmaceuticals, insurance, and patient management. This initiative has led to the launch of patient management and medication benefit programs such as “Ningju Xinsheng.” Reportedly, the program has served nearly 5,000 patients, significantly reducing treatment costs and improving patient adherence, thereby delivering substantial value to patients’ treatment and recovery.

As can be seen from the aforementioned service pathway, Fosun Health not only provides patients with a comprehensive suite of services spanning prevention, diagnosis, treatment, management, and payment, but also enhances operational efficiency for its partners within the ecosystem.

Li Shengli mentioned that, in addition to providing “one-stop” services for specialized diseases, Fosun Health also collaborates with local health authorities to jointly develop “family doctor” services. This initiative involves establishing family health records and delivering comprehensive, end-to-end services for family members, including health management, online consultations, follow-up guidance, medical accompaniment, and assistance with medical visits.

From an industry perspective, internet-based medical services for disease diagnosis and treatment have become a “standard feature,” while health services offer even broader opportunities. In recent years, the healthcare delivery system has been shifting from a “disease-centered” to a “health-centered” model. This transition has been emphasized in multiple guiding documents, including the Outline of the Healthy China 2030 Plan. It is not only a goal pursued by the public healthcare system but has also become a major trend in innovative practices by non-public sector entities.

Currently, from the perspective of the overall landscape of the internet healthcare industry, public internet hospitals account for approximately 70% of all internet hospitals in China, holding an absolute advantage in terms of quantity. Some large tertiary Grade-A hospitals with prominent high-quality medical resources have demonstrated impressive operational performance, significantly facilitating cross-regional medical care for patients. Internet healthcare companies, on the other hand, play roles such as online patient triage, supplementing operational capabilities and technical strength, optimizing the cross-regional allocation of medical resources, and integrating out-of-hospital resources.

So, what is Fosun Health’s industry positioning and value? To answer this, we must first review the company’s development history.

In May 2021, Fosun Health integrated multiple internet healthcare platforms previously under the Fosun Medical Group.Guided by the core values of “benevolence in medicine and pharmacy,” and grounded in professional interventions aligned with disease progression and the essence of healthcare, the company has made building an integrated online-offline healthcare service ecosystem, strengthening specialty capabilities, and implementing disease progression management its core strategies. This approach aims to achieve its strategic positioning as a “medical-grade, all-scenario, one-stop health management platform.”

During the 2022 Shanghai epidemic, Fosun Health further validated its development model through a series of measures.

Li Shengli introduced that when Shanghai residents faced difficulties in purchasing medications during lockdowns, Fosun Health leveraged its pharmaceutical supply chain network and collaborated with Guoda Drugstore to launch “Home Delivery of Medical Services” and “Home Delivery of Medications,” addressing the urgent needs of some patients. Additionally, it promptly supplied residents with COVID-19 antigen test kits developed by Fosun Pharma.

Li Shengli stated that while the internal integration of medical, pharmaceutical, and insurance resources is a distinctive advantage of Fosun Health, more efforts are needed to achieve its strategic goal of building a “medical-grade, all-scenario, one-stop health management platform.” He acknowledged that this goal cannot be achieved overnight; instead, the company should start with its advantageous specialties and replicate the model step by step. In this process, it will collaborate with more external medical institutions, pharmaceutical companies, and insurers to jointly deliver more accessible and affordable healthcare services.

Not only does it possess abundant internal resources, but it also integrates a vast array of external resources; not only does it maintain offline diagnostic and treatment capabilities, but it also strengthens its online service capacity. In the view of VCBeat, these aspects reflect Fosun Health’s industry positioning and value: centering on disease patterns and health principles, leveraging digital tools to deliver high-quality, efficient, and cost-effective healthcare services; while consolidating its own capabilities, it empowers public hospitals, pharmaceutical commercial and retail enterprises, insurance companies, and other partners within its collaborative ecosystem.

Of course, whether it is the Fosun Health model or the other two models, there is still a long way to go before they can be widely and maturely applied. Therefore, the overall task for the industry remains to stay grounded and validate user value and replicability through practice.