From Enabler to Practitioner: How WeDoctor Leverages Digital Innovation to Advance Sanming's Healthcare Reform
On July 6, the Secretariat of the State Council’s Leading Group for Medical Reform and the National Health Commission held a press conference on promoting the Sanming medical reform experience. How to successfully promote the Sanming medical reform experience has become an important issue in China’s healthcare sector.
It is not difficult to see that behind the Sanming healthcare reform’s emergence as a benchmark lie both bold innovations in systems and mechanisms, and the empowerment of new technological forces. These two elements have worked in synergy to forge a unique path for China’s healthcare reform. This article seeks to elucidate this point by examining the Sanming healthcare reform and the digital health platforms involved in it.
Fujian’s Sanming, which tackled pharmaceutical corruption with resolute courage, might not have imagined in 2012 that it would become a national benchmark for healthcare reform in China within just a few years. Likewise, the healthcare companies that provided digital services for Sanming’s reforms at the time could hardly have predicted that digital technology would later exert such a significant and profound impact on China’s healthcare industry.
This impact extends far beyond merely providing information services to industry stakeholders; it also enhances the effectiveness of healthcare through the internet and big data, and even transforms the overall supply and organizational models of the healthcare system. Nine years on, as healthcare reform enters its deep-water zone, the contours, direction, and pathway of the reforms are becoming increasingly clear.
In March 2021, during another inspection visit to Sanming, Fujian Province, President Xi Jinping emphasized that the health of the people is an important hallmark of socialist modernization. The healthcare reforms in Sanming embody the principles of putting the people first and daring to be pioneers, and their experience deserves to be adapted and learned from by other regions according to local conditions. In June 2021, the General Office of the State Council issued the “Notice on Printing and Distributing the Key Tasks for Deepening the Reform of the Pharmaceutical and Healthcare System in 2021,” with the first item being the further promotion of the Sanming healthcare reform experience.
Sanming’s “Three-Medical Linkage” reform has established a new coordinate system for China’s healthcare reform. In the 1.0 phase, Sanming targeted the governance of pharmaceuticals and medical consumables as its breakthrough point, rectifying chaos and curbing waste to overcome the entrenched problem of being “profit-centered.” In the 2.0 phase, Sanming established charters and institutional frameworks to steer healthcare back onto the track of being “disease-treatment-centered.” Currently, Sanming’s healthcare reform has entered the 3.0 phase, driving the transformation of the entire healthcare service system from being “disease-treatment-centered” to being “health-centered.”
Meanwhile, WeDoctor, a digital healthcare service platform that has been continuously involved in the Sanming healthcare reform, has aligned its strategy with the reform’s objectives, completing a strategic evolution from an internet hospital to an internet medical consortium, and further to a tightly integrated internet medical consortium. The “Primary Care Digital Health Community” piloted by WeDoctor in Tianjin was evaluated by Zhan Jifu, the key architect of the Sanming healthcare reform, as being consistent with the goals of Phase 3.0 of the Sanming reform.
From providing services to empowering the Sanming healthcare reform, and further aligning closely with its top-level design and implementation pathways to explore the broader application of the “Sanming Experience,” Weiyi has become a pioneer in leveraging digital technology to drive the new healthcare reform. In a sense, Weiyi’s practice can be regarded as a microcosm of China’s digital healthcare reform.
It is worth contemplating how Sanming and WeDoctor achieved “resonance” in healthcare reform and maintained consistent strategic focus. What underlying reform logic did both parties follow? Understanding these aspects may offer new insights into leveraging digital technologies to help China achieve its healthcare reform objectives.
History has always followed its own logic; a retrospective look at the Sanming healthcare reform clearly reveals the historical inevitability behind its success.
On one hand, China launched its new healthcare reform in 2009. With the new landscape just beginning to take shape and many moves yet to be made, the inclusiveness of the policies empowered localities, including Sanming, to boldly “cross the river by feeling the stones.” On the other hand, numerous signs indicated that by 2012, Sanming had reached a critical juncture where reform became imperative: residents faced significant difficulties and high costs in accessing medical care, prices for pharmaceuticals and medical consumables were artificially inflated, and the basic medical insurance fund had run a deficit exceeding RMB 200 million. These pressures compelled Sanming’s reformers to go all out and burn their bridges behind them, blazing a new trail. Furthermore, it is worth noting that this period coincided with the rise of China’s healthcare informatization wave. Digital technology provided foundational support for healthcare reform, and the breakthrough effect of technology in the medical field began to emerge.
Reforms must identify precise entry points. In the early stages of reform in 2012, under the leadership of Zhan Jifu, the key architect of Sanming’s healthcare reforms, Sanming addressed the critical issue of “healthcare insurance fund deficits” by launching Phase 1.0, centered on “rectifying chaos and curbing waste,” and decisively severing the gray profit chains in pharmaceuticals and medical devices. Data show that, through a series of governance, rectification, and innovative reform measures, Sanming achieved relative savings of RMB 12.403 billion in pharmaceutical and consumable costs and RMB 11.068 billion in total medical expenditures from 2012 to 2020, completely reversing the trend of healthcare insurance fund deficits.
In this process, establishing a transparent and open digital procurement platform has become crucial. Xiamen Haixi Pharmaceutical Trading Center, under Micro Medical Group, has built a transparent online joint price-capped procurement platform for pharmaceuticals and medical devices. Focusing on the three core objectives of “reducing drug prices,” “improving efficiency,” and “enhancing regulation,” it has achieved integration of joint procurement, price negotiation, transaction, settlement, and regulatory oversight for drugs and medical consumables.
At a critical juncture in the Sanming healthcare reform, Weiyi’s hands-on involvement was by no means accidental.
“Three-Medical Linkage” is WeDoctor’s core strategy. On the pharmaceutical front, WeDoctor has been exploring the “Internet + Pharmaceuticals” model, leveraging digitalization to support pharmaceutical reforms. By eliminating inefficiencies in the pharmaceutical distribution chain and improving the utilization efficiency of medical insurance funds, it first establishes linkage between pharmaceuticals and insurance.
As the 1.0 version of “volume-based procurement,” the drug and medical device bidding and procurement model of the Sanming healthcare reform has had a profound impact. Its innovatively built digital procurement platform has also explored a new paradigm for how digital technology can empower “pharmaceutical reform.”
After the National Healthcare Security Administration launched the “4+7” centralized procurement pilot in 2018, drawing on the experience of Sanming’s healthcare reform, Weiyi supported Xiamen in being the first to implement the new centralized procurement policies. It has since provided in-depth services for the centralized procurement of pharmaceuticals and medical devices in healthcare reforms in Fujian, Hebei, and other regions, facilitating the implementation of multiple batches of national drug centralized procurement organized by the state, including the “4+7” program.
Following the tangible success of Sanming’s healthcare reform in reducing drug prices, the Sanming Alliance was officially established. Under the direct guidance of the former State Council Healthcare Reform Office and the former National Health and Family Planning Commission, and centered on the Sanming model, the alliance aims to curb inflated prices of pharmaceuticals and medical consumables through mechanisms such as volume-based price negotiation. WeDoctor’s digital platform continues to support the Sanming Alliance in advancing pharmaceutical procurement reforms across various regions in China.
On July 20, 2021, the Sanming Alliance and the Chinese Non-Public Medical Institutions Association jointly issued an announcement on their official websites to launch cross-regional centralized procurement of pharmaceuticals and medical devices not covered by national or provincial volume-based procurement programs. According to the announcement, the entrusted platform, “Xiamen Haixi Pharmaceutical Trading Center,” will facilitate transactions by matching supply and demand parties with the optimal price-volume alignment, adhering to the principle of “same quality, lower price,” through a model characterized by “price-volume compatibility, intelligent matching, and transparency.”
Compared with the volume-based procurement model organized by drug category, this joint procurement approach relies on a digital procurement platform and is driven by market mechanisms. It is flexible, open, and transparent, offering more diverse transaction options for both supply and demand sides. This will help establish a scientific and reasonable drug price formation mechanism on a broader scale, thereby enhancing the overall welfare of all participants. Underpinning this transaction model is the data engine built by the digital platform, which ensures maximized transaction efficiency and effectiveness through intelligent analysis and matching.
“The Sanming Alliance is one of the core experiences of the Sanming healthcare reform, playing a significant role in reducing artificially high prices for pharmaceuticals and medical consumables, and promoting the ‘vacating the cage to change the bird’ strategy.” Guo Shiyi, Secretary-General of the Sanming Alliance, stated in an interview that this joint procurement initiative will take pharmaceutical reform as its breakthrough point, continue to advance the “three-medical-linkage” reform, establish a national alliance-based procurement mechanism, guide drug prices back to reasonable levels, and facilitate the nationwide promotion of the Sanming healthcare reform experience.
Once the floodgates of reform are opened, the torrent will surge forward.
In 2013, the Sanming healthcare reform moved beyond the “Phase 1.0” of squeezing out inflated drug prices and entered “Phase 2.0.” This new phase focused on establishing charters and institutional frameworks, improving service delivery systems and operational mechanisms, and leveraging technological innovation to promote a more balanced distribution of high-quality medical resources, thereby steering healthcare back onto a track centered on disease treatment.
As it continued to support the breakthroughs in Sanming’s healthcare reform, Weiyi was also opening new windows. With policy deregulation and capital-driven momentum, a new “Internet + Healthcare” business model began to emerge. In 2015, on the eve of the Second World Internet Conference, Wuzhen Internet Hospital, China’s first internet hospital led by Weiyi, was unveiled and commenced operations.
This initiative pioneered online prescribing, online follow-up consultations, and remote consultations, briefly becoming a focal point of public discourse within the industry. Internet hospitals have broken down the walls between traditional medical institutions, connecting doctors and patients across China via the internet. This has improved the accessibility of medical services, enhanced collaborative efficiency among physicians, and established a more rationally structured and specialized healthcare service system. These efforts have provided the necessary foundational conditions and preliminary exploration for building an “Internet-based Medical Consortium” centered on internet hospitals.
Liao Jieyuan, founder of WeDoctor, once stated in an interview, “The internet serves as the ‘central nervous system’ of medical consortia, and the model of ‘Internet Hospital + Medical Consortium’ will become an inevitable path to achieving tiered diagnosis and treatment.” In the following years, the “Internet-based Medical Consortium,” with Internet hospitals at its core, continuously explored and iterated, driving healthcare back to its essential purpose of treating diseases.
In 2017, WeDoctor selected Jia County in Henan Province as a pilot site, leveraging its internet hospital platform and resources to help establish an intelligent tiered diagnosis and treatment system spanning county, township, and village-level medical institutions. The “Jia County Model” was subsequently featured in a special report by the State Council’s Leading Group for Deepening Healthcare System Reform and promoted nationwide.
In 2019, WeDoctor supported Tai’an City, Shandong Province, in exploring an innovative chronic disease management service model integrating “Internet + medical insurance + healthcare + pharmaceuticals.” The “Tai’an Model” has become a typical benchmark for improving public health and medical services—a major livelihood issue—through the focused entry point of chronic disease management.
In 2020, the Shandong Internet Medical Insurance and Health Service Platform, initiated and operated primarily by WeDoctor, commenced operations. It issued China’s first electronic medical insurance settlement statement from a platform-based internet hospital, thereby truly enabling end-to-end integrated services across internet-based healthcare, pharmaceuticals, and medical insurance—the “Three-Medical Linkage.”
In this process, the effectiveness of “Internet+” in driving healthcare reform has become increasingly prominent. In 2018, the General Office of the State Council issued the Guiding Opinions on Promoting the Development of “Internet+ Medical Health,” proposing to promote the deep integration and development of the internet with medical and health services.
With the Dragon Gate flung wide open and the river carp leaping high, a new era of “Internet + Healthcare” is dawning.
In August 2016, at the National Conference on Health and Wellness, President Xi Jinping emphasized placing people’s health in a strategic position of priority development, accelerating the construction of a Healthy China, and striving to safeguard people’s health in all aspects and across the entire life cycle.
In this context, the Sanming healthcare reform has entered its Phase 3.0, establishing closely integrated county-level medical consortia by setting up general hospitals in each county to integrate medical and health resources, improve mechanisms for performance evaluation focused on health outcomes, guide the shift of focus and resources in healthcare delivery to the grassroots level, promote coordination between clinical care and disease prevention, and establish a health “gatekeeper” system.
Meanwhile, medical insurance funds, basic public health service funding, and government subsidies are bundled and allocated to the general hospital, with surpluses retained for its use and reasonable overspending shared. This approach promotes a shift from a “disease-centered” to a “health-centered” model, establishing a health management system focused on “preventive care” and “comprehensive health.”
Meanwhile, leveraging its mature digital infrastructure and extensive service experience, Weiyi has also been exploring initiatives aligned with the goals and direction of the “Sanming Healthcare Reform 3.0.”
As early as early 2017, WeDoctor proposed the concept of establishing a Health Maintenance Organization (HMO).
In January 2020, the Tianjin Municipal People’s Government and Weiyi signed the “Strategic Cooperation Agreement on Digital Health.” Under the leadership of the Tianjin Municipal Health Commission, Tianjin Weiyi General Hospital took the lead in collaborating with 267 primary healthcare institutions across the city to jointly establish the “Tianjin Primary Care Digital Health Community,” with full-scale construction launched on April 29, 2020.
By implementing the “Four Clouds” platforms—Cloud Management, Cloud Services, Cloud Pharmacy, and Cloud Diagnostics—to digitally empower primary care, we provide comprehensive medical and health maintenance services across the pre-diagnosis, intra-diagnosis, and post-diagnosis stages. This approach gradually establishes an efficient, health-centered health maintenance system, implements a health accountability framework, pioneers the digital upgrade of primary healthcare at the provincial administrative level, and offers a practical model for the transition from a “disease-centered” to a “health-centered” paradigm.
It is reported that Tianjin’s grassroots digital health consortium is currently collaborating with primary care hospitals to rapidly deploy and launch digital chronic disease management services. In the initial phase, standardized and intelligent chronic disease management services will be provided to nearly 400,000 diabetic patients in Tianjin by leveraging a digital engine platform to standardize clinical pathways.
Notably, this service will explore new payment models such as capitation-based bundled payments under medical insurance. Based on the assessment results of healthcare management quality, an incentive and constraint mechanism of “retaining surpluses and covering no deficits” will be implemented within internet-based close-knit medical consortia.
From a model perspective, the tight-knit medical consortium led by internet hospitals in Tianjin can be regarded as an upgraded version of traditional medical consortia and close-knit medical communities. From the standpoint of health insurance payment reform, this model enables payers at the provincial level to purchase health outcomes at a predetermined cost.
This move is also consistent with the reform direction of “Sanming Healthcare Reform 3.0.” In a previous media interview, Zhan Jifu affirmed WeDoctor’s practices in Tianjin, stating, “The Digital Health Community currently under construction in Tianjin is led by an internet hospital to establish a close-knit medical consortium, creating a ‘health accountability system’ centered on family doctor contracts and focused on chronic disease management. This is, in essence, the goal of Sanming Healthcare Reform 3.0. The related practical experience has strong demonstrative effects, and its outcomes are worthy of attention.”
Digitalization is the most emblematic hallmark of our era. The success of Sanming’s healthcare reform has been inseparable from the application of next-generation information technologies. As the “Sanming experience” is promoted, implemented, and further evolved in more regions, it will likely rely on digital solutions to break through existing bottlenecks.
On June 30, 2020, at the 14th meeting of the Central Committee for Comprehensively Deepening Reforms, General Secretary Xi Jinping emphasized that great importance should be attached to the application of next-generation information technology in the medical and health sector, so as to reshape management and service models, optimize resource allocation, and improve service efficiency.
The road to healthcare reform is long, meaning that all parties are only just beginning their journey. As the government achieves gradual breakthroughs at the institutional and mechanistic levels, deep integration with digital technologies will ultimately become the dominant theme of the future.