How Two Private Medical Institutions Achieved Revenue Growth with Zero Advertising During the Pandemic

Can Growth Persist Across Economic Cycles and Even in Downturns? The “Secrets” of These Healthcare Institutions Are Simple to State, but Difficult to Execute.

As providers of high-quality medical services, Beijing Shanfang Hospital and Basecare Medical Group firmly believe that premium healthcare should not be limited to environment, service, and cultural ambiance, but must address the essence of premium healthcare: being patient-centered and continuously striving for excellence.

In an era of rapid change driven by informatization and digital transformation, how private medical institutions can select the right strategic technology partners for long-term collaboration, actively engage in co-creating “patient-centric” processes and foundational architectures, and build a value moat that aligns with both the inherent laws of medical development and their own operational realities, thereby leveraging new perspectives on transformation to address the pressures and challenges of the post-pandemic era, presents a new topic and a new opportunity.

“Delta” Variant Strikes, Affecting Multiple Provinces. The normalization of epidemic prevention and control has led not only to stricter government enforcement of hospital containment measures but also to public avoidance of hospitals and other public spaces. The new wave of the pandemic has once again dealt a blow to private medical institutions, which had struggled to regain their footing, causing a sharp decline in patient visits and making “plummeting drops” a common keyword for the sector.

“Black swan” events akin to pandemics have once again shrouded the private healthcare sector in anxiety over uncertainty; to break through this industry-wide apprehension, private healthcare providers must further strengthen their market control.At a time when many healthcare institutions are grappling with survival challenges, two hospitals have not only secured their footing but also achieved revenue growth.

Amid the Recurring and Unpredictable Pandemic, How Did These Hospitals Defy the Odds and Turn Crisis into Opportunity?

Amid the prime real estate of Sanlitun’s bustling downtown stands a tall building with a warm and tranquil interior—Beijing Shanhao Hospital, established in 2015.

Exterior View of Beijing United Family Hospital

In 2020, when the entire industry was mired in difficulties due to the impact of the COVID-19 pandemic, all employees at Shanfang Hospital worked together to overcome the significant disruption caused by the pandemic to the hospital’s normal delivery of medical services. The hospital achieved a strong recovery in the second half of the year, registering a 10% year-on-year growth compared to 2019, the year before the outbreak.

How Was Such Growth Achieved? Discussing Shanfang’s Counter-Trend Growth, Marketing Director Quan Xianghua Acknowledged That Competitive Pressure Is Persistent and Inevitable for Any Hospital. “We Have Seen Many Private Medical Institutions That Started Around the Same Time as Shanfang, or Even Earlier, Only to Fade Quickly Due to Poor Management.” Avoiding Failure Is a Critical Issue That All Healthcare Investors and Managers in the Startup Phase Must Carefully Study, and the Pandemic Merely Added Another Layer of Challenge on Top of This.

Moreover, Shanfang chose “the road less traveled” from the very beginning.

“Providing patient-centered, one-stop services” is the foundational philosophy established at the inception of Shanfang Hospital.Yang Wen, the president of Shanfang Hospital and a medical professional by training, worked for ten years at the 301 Hospital, one of China’s top public hospitals, and later served as a senior executive at International SOS for thirteen years. When founding Shanfang, Yang leveraged his extensive experience in both clinical practice and management to develop a deep understanding of the development patterns within the brick-and-mortar healthcare industry. Addressing the gap in high-end comprehensive medical care in China, Yang did not follow the specialized or chain-model approaches commonly adopted by private healthcare institutions. Instead, he positioned Shanfang to provide general-practice-based comprehensive diagnosis and treatment services to the middle class, who have the ability to pay and prioritize service quality. “Although specialized and chain models carry lower risks, only a comprehensive approach can better meet the needs of our target customers.”

For this very reason, Shanfang has made significant efforts to provide deep, premium services to its precisely targeted customer base.In its early development stage, Shanfang focused on building medical technical expertise, establishing an efficient operational system, deploying cutting-edge diagnostic and treatment equipment, recruiting physicians from Grade 3A hospitals, and creating “green channels” with departments at Grade 3A hospitals such as Chaoyang Hospital and Peking Union Medical College Hospital. These comprehensive measures helped Shanfang form a closed-loop healthcare system that meets customer needs.

Investments aimed at improving medical quality require long lead times and consume substantial, comprehensive resources, without always yielding immediate results. In fact, the history of failures among numerous private hospitals has demonstrated that if investors lack sufficient understanding of the investment and construction cycles of physical medical institutions, or if a hospital fails to identify a clear development model suited to its own circumstances within a limited trial-and-error period, resources not allocated to critical areas will ultimately lead to bankruptcy or change of ownership.

However, with the right direction in place, the hospital’s momentum has continued to soar since its inception. After four years of preparation and nearly six years of operation, the strong reputation built by Shanfang through high-quality medical care and service levels appears to be just beginning to gain traction.In 2021, with the overall effective control of the epidemic in China, Shanfang’s revenue in the first half of the year increased by more than 94% year-on-year compared to the same period last year, and the full-year revenue is expected to grow by approximately 60% year-on-year.

“The power of word-of-mouth is built on long-term accumulation and emerges from within,” said Quan Xianghua, Marketing Director at Beijing Shanfang Hospital. “In the past June and July, the hospital’s monthly revenue consecutively hit record highs since its opening.” Notably, the primary driver of Shanfang’s growth was not advertising.Shanfang’s advertising expenditure is virtually zero.

Also achieving growth with zero advertising spend is Berry Medical Group, headquartered in Shanghai and Hangzhou.

Hangzhou Baymax Meihua Women's and Children's Hospital

Established in 2012, Berry’s, which specializes in women’s and children’s healthcare as well as medical aesthetics, has built three well-known regional brands—Berry’s Meihua, Boman Medical Aesthetics, and Delin Medical Aesthetics—in just nine years. Its portfolio includes two hospitals, three outpatient clinics, and one postpartum care center.

In the fields of women’s and children’s healthcare and medical aesthetics, which have long become arenas for capital-driven profit-seeking, what has enabled Berry to establish a firm foothold in first-tier cities?

For the “slow-paced” healthcare services industry, Berry’s answer is: “Endure.”

Before founding Berry Medical Group and serving as its CEO, Fang Ruimin, a graduate of the Nursing Department at Shanghai Jiao Tong University who completed advanced training in the Hospital Management Executive Program at Harvard University, worked at a tertiary hospital. With a clinical background, she deeply understands the importance of healthcare quality.In her words, Berry's is "approaching consumer healthcare with the rigor of serious medical care."

Ensuring the lawful and standardized operation of private medical institutions was not yet common practice in 2014, when Fang Ruimin founded Boman Medical Aesthetics. Even in 2019, amid the rapid development of the medical aesthetics industry, the number of illegally operated medical aesthetics clinics reached as high as 80,000, according to iResearch’s “White Paper on Insights into China’s Medical Aesthetics Industry 2020.”

However, Fang Ruimin believes that “the market will ultimately move toward standardized development.” Guided by this business philosophy, she has chosen to focus on providing Chinese women who prioritize quality and have relatively higher purchasing power with international-standard, full-lifecycle health management services. Hangzhou Bestree Meihua Women’s and Children’s Hospital, under the Bestree Group, serves as a collaborative hospital of Beth Israel Deaconess Medical Center, affiliated with Harvard Medical School. It implements American medical standards aligned with international practices across all stages, from preconception and prenatal care to delivery and postpartum care. In its medical aesthetics division, Fang Ruimin is committed to safeguarding patients’ right to informed consent, using only certified international equipment and ensuring full traceability of the names, dosages, and prices of all injectable products.

In a market lacking high-end women’s and children’s medical services and licensed medical aesthetics institutions, Baymax’s “upstream” efforts have made it a “pioneer.”“When we entered the Zhejiang market in 2012, we essentially took on the role of cultivating it,” Fang Ruimin admitted. “At that time, many mothers would still choose public hospitals, even if it meant sleeping in corridors. It was only gradually that Berris infused its high-end service philosophy into the local market. This requires resilience; you must not chase short-term traffic by doing things that will ultimately erode customer confidence.”

Shanghai Boman Medical Aesthetics Outpatient Department

Berry’s focused and sustained efforts targeting high-end clientele have gradually earned the trust of female customers in the Jiangsu-Zhejiang-Shanghai region. This trust has proven resilient under scrutiny.

The medical aesthetics industry, which had seen rapid growth over the past decade, faced particular hardships during the 2020 pandemic. Its annual growth rate, which had exceeded 20% in previous years, was nearly halved in 2020, and Berryess was inevitably impacted. “Our Boman Center in Hangzhou opened in 2019, only to encounter the pandemic shortly thereafter, leading to a temporary decline in performance,” Fang Ruimin shared with VCBeat.

However, in the face of challenges, Beiruisi quickly adjusted its strategy; instead of increasing additional investments, it boosted revenue by driving conversions across different business formats.“Hangzhou Boman has not relied on any external channels, achieving break-even in a short period solely through customer conversion at Hangzhou Bestay Meihua Women’s and Children’s Hospital and promotion via its own internet platforms,” said Fang Ruimin with evident pride. “This success is attributable to the trust that women’s and children’s healthcare clients place in the Bestay brand, as well as Bestay’s continuous focus on delivering customer value.”

“Some clients have chosen Berry’s Meihua for all three of their childbirths, and medical aesthetics clients frequently refer their close friends to undergo procedures.” To this day, Berry’s revenue continues to derive primarily from repeat purchases and referrals by existing customers, a pattern that appears to reflect an industry-wide trend. According to data from iResearch, 45.1% of medical aesthetics users obtain information through acquaintances. “Customer acquisition costs are rising steadily, particularly in the medical aesthetics sector.”Amidst intense competition, the management and excavation of customer value are of paramount significance to Berries’ growth.

Comparing the counter-trend growth of Shanfang and Basecare, it is easy to identify the commonalities among high-quality private medical institutions: clear differentiated positioning, a precisely defined customer base, and management teams with expertise in both healthcare and administration.All three elements are indispensable to enable a hospital to consolidate cutting-edge medical resources during its initial development phase, thereby ensuring the quality and standard of care for patients.

On the foundation of ensuring high-quality medical care, how to acquire and retain a loyal customer base has become the litmus test for a brand.“Moving from simple user awareness to building trust, and ultimately persuading users to consume high-value virtual medical services, is in fact a protracted decision-making process and conversion chain.” In this regard, Shanfang believes that hospitals, on the basis of an efficient operational system, should further strive to establish a truly “patient-centered” service system.

Building thoughtful, humanistic patient services is often closely tied to the operational system.“For instance, we have established standard operating procedures (SOPs) for standardized customer service process management,” cited Quan Xianghua, Marketing Director at Shanfang Hospital. The full-lifecycle service process encompasses comprehensive pre-visit patient education, seamless and professional cross-departmental medical service workflows upon arrival, and robust post-discharge follow-up management. “For patients, it may seem like merely a brief conversation with a medical consultant or a simple service appointment; however, behind this lies an integrated system of cross-departmental collaboration in customer service processes and enterprise-level customer relationship management.”

Similarly, for Burris, as public hospitals are increasingly focusing on patient experience,The challenge for private healthcare providers lies in enhancing service quality at a low cost.“Taking patient follow-up as an example, we found that refining the rules leads to two major issues: first, our staffing requirements and regulatory costs increase significantly; second, if we rely entirely on manual record-keeping, service quality becomes dependent on employees’ individual professionalism and self-discipline, which is inherently unreliable.” As its customer base expanded and the granularity of customer service became more refined, Baires realized that only by embedding its service system into standardized processes could it achieve standardized management of patient service quality.

However, establishing a standardized and manageable customer service system is no simple task.To build a service system that supports pre-hospital, in-hospital, and post-hospital care, and to achieve the transition from manual to refined management, hospitals need to addressVast and complex, interwoven customer information, medical information, customer tags, work tasks, forms, which is nearly impossible to accomplish without a suitable information system; and with the growth of business volume, the deepening of refined management, and the integration from single-campus operations to group-level consolidation, information management tools are poised to play an even greater role.

“CRM (Customer Relationship Management) is not a new concept in the retail industry, but it has generally been overlooked in the healthcare services sector. For Basecare, we had been seeking a product aligned with our philosophy that focuses on customer value management,” said Fang Ruimin, CEO of Basecare Medical Group.Some companies specializing in consumer-facing CRM systems aspire to enter the healthcare sector, yet they lack experience with its unique characteristics, as the healthcare industry presents substantial barriers to entry.“For example, there are significant differences in marketing strategies and service processes between the consumer sector and the healthcare sector, among different business models within the healthcare sector, and across different institutions operating under the same business model.”

The service system of private medical institutions signifies not only the standardization of service processes and clinical care, but also business innovation.To provide services throughout the entire customer lifecycle, healthcare institutions often extend their product lines: Basecare has expanded its obstetrics and gynecology services to include postpartum rehabilitation, pediatrics, and medical aesthetics; Shifang Hospital has also leveraged its advantages as a comprehensive healthcare institution in consumer-oriented medical services, such as preventive medicine and health management, aesthetic anti-aging and plastic surgery, and comfortable dental care. The extension of product lines signifies a deep exploration of customer value, which has led both Shifang Hospital and Basecare to focus particularly on the operational management of niche private-domain customer segments.

“We need to provide a way for patients to reach the hospital, or for the hospital to reach them, after they leave the hospital. Making phone calls regardless of time and location is actually outdated,” said Fang Ruimin. To this end,Berryce co-developed a mini-program with vendors to provide customers with a channel to learn about the institution’s latest events and purchase medical service products.“For example, with platforms like Meituan or Dianping, it is not the platforms that seek out users; rather, users actively visit them. With the introduction of mini-programs, these platforms have aggregated features such as events, courses, loyalty points, and medical consultation information. As a result, Berry’s customers also browse these platforms from time to time, occasionally making spontaneous purchases.”

"As the pandemic forced offline interactions to move online, Shanfang also leveraged customized mini-programs to achieve traffic conversion from public to private domains."Since the official launch of the Shanfang Mini Program in late 2020, it has recorded over 100,000 visits and attracted more than 30,000 registered users.““Users can access the Shanfang Hospital mini-program with a single click to enable quick online appointments, real-time consultations, examination report inquiries, and discounted package purchases. This aggregation of features not only provides great convenience for patients but also facilitates centralized management of valuable traffic.”Achieving such growth is no easy feat, and Shanfang believes that informatization tailored to the specific characteristics of medical institutions is a crucial strategic move.““It is difficult to have a single digital system that can provide healthcare institutions with management capabilities spanning the digitization of offline services, operational digitization, and sales management digitization.”

Building such an integrated information service system that spans online and offline channels, as well as pre-hospital, in-hospital, and post-hospital care, requires not only trustworthy vendor partners but also leaders with strong management expertise.“During the development and practice of Shanfang, we have increasingly come to believe that informatization is a CEO-level initiative.“Only by combining the hospital’s development philosophy with its actual management systems to create a tailored design can this system solution be made practical and user-friendly.”

Fang Ruimin strongly agreed. While attending the Hospital Management Executive Program at Harvard University in the United States, she noted the importance of information systems within the U.S. healthcare system. She realized that,Only when healthcare institution managers choose to empower patient care with information technology can they unlock the next stage of refined development.

Guided by a “patient-centric” philosophy of care, a reputation built on tangible results, and forward-looking management principles, Shanfang and Baires are seeking deeply aligned partners who share their values and walk side by side with them on the path of sustained growth—rather than engaging generic software vendors.Building on years of trusted collaboration through HIS systems, these two healthcare institutions jointly selected Kangbojia’s HCRM (Healthcare Customer Relationship Management) system to integrate online and offline customer relationship management across the pre-, intra-, and post-care phases.

“We require partners with extensive experience in private healthcare and the deployment of chain medical facilities.”Fang Ruimin said,“Kangbojia has accumulated extensive industry experience serving Grade III Class A general hospitals, specialized hospitals, and health management medical institutions. The integrated deployment of CRM, Mini Programs, HIS, LIS, PACS, and EMR implemented for Baymax effectively connects front-end customer acquisition, medical services, and patient care, achieving horizontal and vertical integration of information.””

 “Shanfang is grateful to have chosen the Kangbojia technical team, which specializes in private healthcare services, during its founding period.“Regarding our partners,” Quan Xianghua stated, “Leveraging its accumulated industry insights and reflective expertise, Kangbojia efficiently addresses the complex requirements encountered in our informatization development process. It provides Shanhao with a one-stop technical solution to realize its patient-centered service philosophy, truly empowering business growth.”

For these healthcare institutions that have achieved robust growth against the tide, efforts to improve medical quality and service levels are indispensable and must be pursued with steady, diligent steps.Meanwhile, information technology construction serves as a sharp blade cutting through thorns, helping medical institutions pave the way for future development and safeguard against unknown risks along the long journey ahead.

In an era of increasing uncertainty, arming oneself with wisdom may be the greatest asset.