The Dawn of a New Decade: What Will Internet Healthcare Look Like in 2022?

After a Decade-Long Marathon, Internet Healthcare Embarks on Another Ten Years, with 2022 Marking the Beginning.

Over the past decade, internet healthcare has played a significant role in improving the efficiency of medical consultations. Evolving from appointment scheduling to online consultations and internet-based diagnosis and treatment, expanding from single-step services to end-to-end solutions, and progressing from local pilot initiatives to recognition and encouragement through top-level design, it has become an integral component of the healthcare service system. In the past two years, internet healthcare has also demonstrated remarkable performance in epidemic prevention and control, compensating for the shortfall of offline services during emergencies, thereby driving rapid growth in the industry.

A New Year, a New Phase, and New Hopes: Where Is the Industry Headed? At this pivotal juncture, VCBeat engaged in conversations with multiple industry leaders to jointly explore emerging trends.

Currently, HMOs, internet-based chronic disease management, and internet-based full-course disease management have become high-frequency keywords in online healthcare service models. Industry insiders believe that in 2022, online healthcare will further integrate with the traditional healthcare system, penetrating into the “core” of medical care and empowering new healthcare reforms, tiered diagnosis and treatment, and primary healthcare through digital capabilities. In this process, different companies will address pain points and challenges in various segments of the traditional system, leading to more pronounced differentiation within the industry.

Over the past few years, relentless exploration within the industry has led to a flourishing of internet healthcare models, giving rise to diverse business formats such as digital health, health consulting, and pharmaceutical e-commerce. However, many of these remain confined to the “periphery” of medical care. Liao Jieyuan, Chairman of WeDoctor Group, stated that in recent years, particularly accelerated by the pandemic, digital health is increasingly penetrating the “core” of medical services, a trend that continued in 2022. In this process, only by integrating foundational digital capabilities with institutional innovation, facilitating health insurance reimbursement, establishing a closed loop encompassing pharmaceuticals and medical services, and achieving coordinated interaction among these three elements through systemic and mechanistic reforms, can tangible improvements in service models and quality be realized.

“In 2022, internet-based medical services will penetrate even deeper into the grassroots level.” Liao Jieyuan believes that the most significant weakness in China’s healthcare system lies at the grassroots level, which is also where digital health has the greatest room for growth. In recent years, China has vigorously advanced new healthcare reforms, with the tiered diagnosis and treatment system serving as a key lever. With its decentralized and interconnected features, digital health helps alleviate pressure on large hospitals, enhances the capabilities of primary care institutions, and improves efficiency on the payer side, thereby demonstrating significant value in the ongoing reform process.

“There is a substantial need for improvement and transformation on both the supply and demand sides of healthcare services, which presents significant opportunities for internet-based healthcare,” said Qiu Jialin, founder of Weimai. On one hand, the fundamental role of national basic healthcare—“strengthening primary care and ensuring basic coverage”—will remain unchanged in the long term, while there is also a need to meet the public’s multi-level and personalized healthcare service demands. On the other hand, it is essential to continuously address physicians’ needs for efficiently solving practical problems and creating value, as well as their desire to obtain transparent, legitimate compensation through their professional expertise and services. Therefore, leveraging digital capabilities to empower service delivery, enhancing operational efficiency, expanding service volume, and optimizing service efficiency to fully satisfy the needs of both supply and demand sides represent the major direction for industry development.

Wu Fang, Executive Director of Yuanxin Medical Technology, also believes that the “Healthy China 2030” initiative has charted the course for internet-based healthcare and put forward new requirements. Against the backdrop of homogenization in medical services, online diagnosis and treatment are returning to their fundamental role as “medical care.” With health maintenance as the goal, “Internet+” out-of-hospital management will also become an important model for industry development.

As services become more in-depth, standardized clinical pathways should also become a key focus for the industry. In offline settings, disease diagnosis and treatment are often conducted in accordance with relevant guidelines or expert consensus. In contrast, during the past innovation phase of online internet healthcare, products, services, and processes were each configured by companies based on their own technological or resource advantages, lacking standards such as guidelines or consensus.

Xiao Jianbo, General Manager of JD Health’s Internet Healthcare Division, stated that in the new year, the development of internet healthcare will become more in-depth and comprehensive, with greater participation from users, physicians, hospitals, and other stakeholders. The process of building an integrated online-offline service model covering prevention, health maintenance, diagnosis, treatment, and rehabilitation will further accelerate. Meanwhile, internet healthcare service products will become more standardized and regulated, with an increasing number of local, industry, and national standards being introduced.

Sub-segmentation also emerges under the premise of shared overarching trends.

Wang Hang, founder and CEO of Haodf.com, stated that the healthcare industry is highly complex and fragmented, with ample room for improvement and numerous emerging opportunities. Companies cannot all compete in the same lane; instead, they must address challenges in a diversified manner. Exploring and innovating around the various pain points within the industry may well define the direction of future differentiation, ultimately leading to a thriving and diverse healthcare ecosystem.

Xiao Jianbo also believes that as more players enter the internet healthcare industry, there may be more participants deeply cultivating niche disease areas and specific scenarios.

“Perspectives on development trends within the industry vary: some focus on policy, others on technology, while we prioritize user needs,” said Li Tiantian, Founder and Chairman of DXY. He noted that users previously focused primarily on whether they were ill and sought advice on purchasing medications after falling sick. However, at the current stage, particularly in the post-pandemic era, users have demonstrated new demands in areas such as diet, exercise, skincare, sleep, and mental health, placing greater emphasis on personal protection, nutritional balance, and psychological counseling. In 2022 and over the next two to three years, it will be essential to adapt products and services to meet these evolving user needs.

In October 2021, the Medical Administration and Hospital Management Bureau of the National Health Commission released the Detailed Rules for the Supervision of Internet-Based Diagnosis and Treatment (Draft for Comments) (hereinafter referred to as the “Detailed Rules”). This marks the first set of detailed regulations issued by the National Health Commission specifically targeting internet-based diagnosis and treatment since the introduction of the three major documents in 2018, including the Administrative Measures for Internet-Based Diagnosis and Treatment (Trial). It is also the most significant policy document for the internet healthcare industry in 2021.

However, the Detailed Rules have not yet been formally implemented. They are expected to be officially issued in 2022, thereby establishing more substantive regulatory oversight over internet healthcare services.

In Wang Hang’s view, “standardized development” has been a consistent theme throughout 2021, marked by several key events: At the beginning of the year, the Government Work Report proposed for the first time to “promote the standardized development of the ‘Internet + Healthcare’ industry”; in April, media outlets exposed irregular practices related to online prescription drugs on certain platforms; from May to July, Ningxia, as a national-level demonstration zone for “Internet + Healthcare,” carried out a series of self-regulatory initiatives, including launching an assessment project on the implementation of standards for internet-based diagnosis and treatment; and in late October, the National Health Commission released the Detailed Rules for the Supervision of Internet-Based Diagnosis and Treatment (Draft for Comments).

“Initiatives in 2021 were primarily driven by the government, industry associations, and media. Their translation into corporate actions and specific business operations is expected to occur in 2022,” said Wang Hang. He noted that changes are already evident within the industry, such as the gradual standardization of prescription drug sales on certain platforms. “In 2022, policies will inevitably translate into various compliance measures within corporate business development. For innovative industries, once regulatory frameworks are established, stakeholders will genuinely focus on addressing the sector’s challenges and pain points, tackling the ‘hard nuts to crack,’ and pursuing initiatives that truly drive business growth and deliver social value.”

Liao Jieyuan noted that in 2021, national policies were progressively tightening and strengthening regulatory oversight across both the broader internet industry and the internet healthcare sector, making compliance-driven development a fundamental principle of the industry. “The new regulations send a clear signal: internet-based diagnosis and treatment services must achieve maximum ‘homogeneity’ with those provided by physical medical institutions, thereby repositioning internet healthcare to its core role of ‘delivering serious medical services.’ This signal will impact the industry in 2022 and beyond.”

First, industry segments are becoming increasingly differentiated. Clearer boundaries have emerged between sectors such as digital health and pharmaceutical e-commerce, enabling players to focus more effectively on their respective niche services, which is conducive to the long-term, healthy development of the industry. Second, industry consolidation is accelerating. New regulations have raised the technical and operational thresholds for internet hospitals, gradually phasing out small, fragmented, and low-quality providers. Large-scale internet diagnosis and treatment platforms with more robust technological infrastructure and mature operations, as well as specialized, high-end platforms, stand to benefit. Finally, the process of large-scale procurement of internet diagnosis and treatment services by medical insurance will be accelerated. The new regulations will promote the establishment of unified standards for internet diagnosis and treatment services and facilitate functions such as data interoperability and sharing, thereby making it more favorable for medical insurance funds to implement large-scale payments for these services.

While platform-based internet hospitals primarily face challenges related to standardized operations, public internet hospitals must address how to achieve effective and efficient operations on the basis of such standardization. According to Qiu Jialin, public hospitals that build their own internet hospitals incur high technical costs and lack professional operational staff. “With the implementation of new regulations, operational systems will become increasingly standardized. To keep pace with these developments in business processes, it is essential to increase investment in operations and R&D for iterative upgrades, which undoubtedly poses a significant challenge. Therefore, hospitals are in greater need of professional, capable third-party companies to leverage their middle-platform advantages and provide systematic solutions to support compliant and effective operation of internet hospitals. Under this collaborative model, third parties provide follow-up consultations and related services for common and chronic diseases, while physical hospitals—especially large tertiary Grade A hospitals—focus more on the treatment of complex and critical cases, inpatient care, and surgeries.”

However, from a broader perspective, the changes brought to the industry by the “Detailed Rules” are aimed at fostering healthy development under certain constraints, rather than constituting pure “negative news.”

According to Li Tiantian, prior to soliciting public comments on the Detailed Rules, extensive industry research was conducted, and interactive exchanges were held with enterprises, resulting in a broad consensus within the sector. “Offline practices such as kickback-driven sales and unauthorized collection of prescription data (‘tongfang’) are non-compliant. The new regulations aim to adopt preventive measures to stop these practices from resurfacing in disguised forms online. Internet healthcare companies will not face risks as long as they adhere to compliant business operations. The new rules establish a baseline for enterprises concerning diagnostic and treatment safety, prescription safety, and medication safety. Rather than hindering industry development, they encourage the sector to thrive while upholding this baseline.”

“The new regulations, which maintain the classification and scope of diagnosis and treatment for internet hospitals as outlined in previous documents, are consistent with a series of policies favorable to industry development. They serve to protect the standardized, healthy, and sustainable growth of the internet healthcare sector while supporting emerging business models,” Wu Fang assessed. She believes that the implementation of the new regulations will mark an end to the past “wild growth” of internet healthcare, ushering in a phase of standardized, high-quality development.

Xiao Jianbo also pointed out that the new regulations provide industry participants with clearer guidelines to follow, offering relevant stakeholders a certain degree of room for exploration while establishing clear baseline standards for basic diagnosis and treatment.

Over the past two years, the internet healthcare industry has experienced rapid growth. However, challenges such as insufficient support from hospitals and physicians, the lack of well-established user habits, and an immature payment system remain unavoidable hurdles for the industry’s development. Will breakthroughs be possible in these areas in the coming year or the next few years? If so, how? Industry experts have engaged in discussions on these issues, holding diverse perspectives.

“Since the onset of the COVID-19 pandemic, public medical institutions have shifted from their previously conservative stance to actively exploring internet-based healthcare. Support from hospitals and physicians is expected to further increase, making the construction and operation of internet hospitals a significant industry force that cannot be underestimated.” Xiao Jianbo believes that under these circumstances, user habits will gradually generate network effects, with mutual influence among users driving internet healthcare to transition from a “supplement” to an “essential” component of medical services.

Wu Fang stated that, against the backdrop of normalized epidemic prevention and control, and with the cultivation of user habits, the number of internet hospitals, the number of online physicians, and the volume of patient consultations are all poised for rapid growth in the coming year.

So, where will the breakthrough lie?

“Companies providing healthcare services must not detach themselves from public hospitals at the current stage; this is a foundational quality and capability we believe winners must possess, and it is also a significant challenge,” mentioned Qiu Jialin. From a macro-trend perspective, public hospitals will remain the mainstream for a considerable period, with private institutions serving as an extension and supplement. Internet-centric thinking, focused on user experience, will be introduced into the healthcare industry, guiding the sector’s shift from treatment-centered to health management-centered care. Companies that succeed in this field in the future will inevitably be those that genuinely address practical problems for hospitals, healthcare professionals, and the general public, while diligently delivering high-quality healthcare services.

Liao Jieyuan summarized the breakthrough approaches, stating that “Medical Consortiums” and “Health Accountability Systems” will be the two key terms for overcoming industry challenges. The previous service model of internet healthcare was “isolated and superficial,” lacking an implementation model capable of fully unleashing its value. Meanwhile, the development of medical consortiums has become the central axis of China’s healthcare reform and will also be the key for internet healthcare to “stage a strong comeback” and realize its significant value.

Meanwhile, the healthcare system is actively promoting a shift from being “treatment-centered” to “health-centered.” Health insurance funds are gradually transitioning from the traditional “fee-for-service” and “pay-per-visit” models to outcome-based payment methods such as “capitation” and “diagnosis-related groups (DRGs).” Against this backdrop, by leveraging internet-based medical consortia and deeply integrating health insurance, commercial insurance, and supply chain systems, we can build a regional closed-loop healthcare system based on “pay-for-performance,” implement a “health accountability system,” and ultimately establish Chinese-style Accountable Care Organizations (ACOs). This approach will not only provide comprehensive, lifecycle-spanning health maintenance for the general public but also realize the industrial value of internet healthcare.

For example, Wang Hang holds the view that the healthcare industry is highly complex, and all breakthroughs require a considerable amount of time; quantitative accumulation is necessary to bring about qualitative change. Currently, various sectors are still in an exploratory phase.

“For example, in the original physician-facing interface of internet healthcare systems, usage was primarily driven by physicians. However, many issues could not be resolved by physicians alone, as a significant amount of work following the issuance of medical orders required collaboration among healthcare professionals in various roles. Therefore, we have introduced multiple roles onto our platform, including nurses, pharmacists, rehabilitation therapists, and dietitians. What functionalities will these users have? How will the platform evolve? These remain uncertain,” said Wang Hang. He noted that there are no definitive answers to these questions yet; it cannot be considered a breakthrough, but rather an exploratory process akin to “crossing the river by feeling the stones.”

Wang Hang believes that the same logic applies to medical insurance. “Some practitioners dream of a breakthrough in medical insurance coverage one day, leading to a surge in order volume and revenue, but this is unrealistic. A sharp increase in medical service orders would indicate significant public health issues and raise concerns about the sustainability of the medical insurance fund. Therefore, the cautious integration of internet-based healthcare services into the medical insurance system, along with the careful formulation of payment strategies, reflects the regulatory role played by the medical insurance authorities. Once this logic is truly understood, there will be no unrealistic expectations of achieving large-scale growth simply by connecting to the medical insurance system.”

Li Tiantian also pointed out that disease-centric internet healthcare faces numerous challenges from a commercial perspective, including few payers, heavy offline operational burdens, high risks, and low frequency of use. These difficulties are further intertwined, making them hard to overcome one by one. “The ‘upstream’ of disease is healthy lifestyle, which involves less regulation, higher demand frequency, diverse payers, and does not require heavy operations, thus offering diversified business opportunities. If one insists on focusing on the ‘downstream’ segment such as disease management, sufficient patience will be required.”

Furthermore, Qiu Jialin highlighted the risks inherent in industry development. He argued that the pandemic offered a crucial lesson: low-probability events do not cease to occur simply because their likelihood is small; on the contrary, as long as there is a possibility of occurrence, preparations must be made. “Even though everyone is optimistic about internet healthcare, believing it to be in its best developmental phase in history, no transformation proceeds without setbacks. We must remain vigilant and consider how to address the fluctuations and deviations that arise during the industry’s evolution.”

Indeed, all innovation advances through twists and turns. However, the unique nature of healthcare has made its integration with the Internet a more protracted process compared to the “Internet Plus” transformation seen in other industries. Regardless, those who rise to meet challenges are truly courageous. In the new year and the new decade, let us offer greater support and encouragement to the internet healthcare industry and its practitioners, provide more innovative approaches and constructive suggestions, and exercise greater patience and understanding.