Platform-based Internet Hospitals Break New Ground: 'Health Accountability Consortium' Gains Spotlight at Two Sessions and Files IPO Prospectus
In the post-pandemic era, public attention to health has surged. During this year’s Two Sessions, healthcare once again emerged as a hotspot topic. On March 4, the “2021 Two Sessions · Health Policy” Series Interviews – Digital Healthcare Special Session, hosted by the People’s Daily Health Client and the Health Times of People’s Daily, was held in Beijing. Three distinguished guests—Hu Dingxu, Standing Committee Member of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC) and former Chairman of the Hospital Authority of Hong Kong; Ying Yazhen, Vice President of the China Healthcare Security Association and Deputy Dean of the National Healthcare Security Administration Research Institute; and Liao Jieyuan, Chairman and CEO of WeDoctor Group—engaged in discussions centered on the theme “Innovation and Practice of China’s Responsible Healthcare System,” jointly exploring new pathways and trends in the development of digital healthcare.
As the founder of China’s first internet hospital, WeDoctor has long been committed to the specialized niche of digitizing serious medical services. Catalyzed by the pandemic, WeDoctor’s platform-based internet hospital achieved deep integration with mainland China’s primary payer for medical services—the National Health Insurance scheme—seizing this opportunity to emerge as a leader in the digital healthcare industry. During the interview, policy research experts, industry managers, and frontline practitioners reached a strong consensus on the future of implementing a responsible healthcare system in China through digitalization, focusing on WeDoctor’s innovations and practices.
Since 2020, the Chinese government has continuously introduced favorable policies to encourage industry development. The accumulated momentum of China’s digital healthcare services sector has been unleashed, enabling it not only to become a cornerstone in the fight against the COVID-19 pandemic but also to establish a new landscape of overtaking competitors on the international stage.
“We can see that, in fact, our country has performed the best globally, as we adopted internet-based healthcare relatively early. Mainland China has leveraged telemedicine and internet healthcare to help a large number of people,” said Hu Dingxu, highly praising the role of digital health services in combating the epidemic. He noted that medical experts, including those from countries such as the United Kingdom and the United States, believe that the digital health industry has developed more rapidly and achieved greater penetration in China.
It is reported that during the peak of the epidemic, WeDoctor provided up to 280,000 online consultations in a single day, with daily platform visits exceeding 11 million. According to Liao Jieyuan, WeDoctor pioneered the integration of online medical insurance payments across China and met 97% of the follow-up consultation and medication purchase needs for 408,000 patients with chronic and severe conditions in Wuhan during the epidemic peak.
“During the critical period of pandemic control, internet hospitals indeed played an irreplaceable role,” said Liao Jieyuan. It is widely recognized within the industry that, driven by various policies, China’s digital healthcare sector achieved in six months more progress than it had in the previous six years.
“At present, the healthcare security authorities are making every effort to advance reforms in healthcare payment methods, so as to better align with the intrinsic principles of medical services, which holds significant value for future public health management. In the future, a collaborative model in which providers, patients, and healthcare payers jointly assume responsibility for and deliver services aimed at patient health represents a highly effective combination. This approach can be piloted in selected representative regions before being rolled out on a broader scale,” said Ying Yazhen.
As China’s largest digital healthcare platform, WeDoctor has secured medical insurance accreditation for 17 of its 28 internet hospitals, enabling online medical insurance payments and solidifying its leading position in the industry. In his presentation, Liao Jieyuan introduced that WeDoctor implemented China’s first city-level digital chronic disease management model with direct medical insurance reimbursement in Tai’an, Shandong Province. Within just over a year, the average consultation time for chronic disease patients in the area decreased from 2–3 hours to 30 minutes; the average prescription cost per outpatient visit for patients with major chronic conditions dropped by 12.7%; medical insurance expenditures were reduced by more than 10%; and patients’ out-of-pocket expenses declined by over 5%. Meanwhile, after 12 months of standardized, intelligent diabetes management provided by WeDoctor Internet General Hospital to a sample patient cohort, the control rate of glycated hemoglobin (HbA1c), a key indicator, improved significantly. These outcomes fully demonstrate that digital chronic disease management enhances accessibility, effectiveness, and affordability of healthcare for patients.
Deep integration with the social medical insurance system is accelerating the development of the digital healthcare industry. In contrast to countries like the United States, where commercial insurance dominates the healthcare payment landscape, China’s basic medical insurance covers 95% of the population. Gaining recognition from this primary payer will unlock a vast market for digital healthcare services in mainland China, while also establishing the deepest competitive moat for WeDoctor, which has been deeply entrenched in this niche sector for over a decade.
“The accountable care system encompasses five key components: prevention, diagnosis, treatment, management, and health promotion. It requires the establishment of a health-oriented community of shared responsibility to achieve collaborative execution,” said Liao Jieyuan. He noted that the development of internet hospitals in China has undergone three stages: Stage 1.0 featured standalone internet hospitals; Stage 2.0 saw the emergence of platform-based internet hospitals; and Stage 3.0 is characterized by health communities of shared responsibility led by platform-based internet hospitals.
WeDoctor has established a new benchmark for Internet Hospital 3.0 in Tianjin. Led by the Tianjin WeDoctor General Internet Hospital, a close-knit medical consortium comprising 267 primary healthcare institutions across the city has been formed. This initiative achieves unified management, shared responsibility, shared benefits, and standardized services, providing users with comprehensive medical and health maintenance services throughout their lifecycle. It also promotes the reform of diagnosis-related group (DRG) payment under medical insurance and facilitates the implementation of an accountable care system centered on health. During the pre-Spring Festival commendation of “Advanced Models for Improving Medical Services” by the National Health Commission, the Tianjin WeDoctor General Internet Hospital was recognized as a “Demonstration Hospital,” standing out as the sole internet hospital among the 484 honored institutions.
“Some of their designs and practices have exceeded our expectations.” Ying Yazhen, who previously conducted field research in Tianjin alongside experts from the World Health Organization, pointed out in her sharing that WeDoctor, as the lead entity and hospital for the Digital Health Community, has also explored institutional and mechanistic innovations. These efforts have helped stabilize the primary care workforce, enabling grassroots physicians to enhance their professional capabilities while achieving reasonable and compliant increases in income and benefits.
“The essence of the health accountability system is the alignment of responsibilities, ensuring that the public’s health outcomes, the performance metrics of doctors and hospitals, and the evaluation criteria for payers and regulatory authorities are consistent.” Liao Jieyuan believes that as the experiences in Shandong and Tianjin mature and become more widely adopted, platform-based internet hospitals will pioneer a Chinese model of accountable care.
Digital healthcare services are fostering a win-win scenario for both social and economic benefits. Digital healthcare has driven an overall improvement in the accessibility, effectiveness, and cost-efficiency of medical services, creating substantial user value. From a commercial perspective, integration with health insurance not only enhances user stickiness but also significantly reduces customer acquisition costs and the expenses associated with scalable replication.
In fact, membership-based chronic disease management services have gained significant recognition from the capital market. Livongo, a U.S. company specializing in digital chronic disease management, had accumulated 440,000 chronic disease members by the third quarter of 2020, with an average annual revenue per user (ARPU) of $669.7 (equivalent to over RMB 3,700). Based on its $18.5 billion valuation at the time of its acquisition by Teladoc, the implied value per user exceeded RMB 250,000. Given that China’s population of patients with chronic diseases is significantly larger than that of the United States, the market size for digital chronic disease management services in China is considerable.
It is understood that WeDoctor’s digital accountable care system, centered on membership-based chronic disease management, is being steadily replicated across multiple regions in China, using medical insurance pooling areas as the unit of expansion. The localized administration of mainland China’s medical insurance system has validated WeDoctor’s long-term strategy of deeply cultivating individual insurance pooling areas. As a fertile ground for innovation, digital healthcare carries high expectations from the government, industry, and society, and is poised to yield even greater achievements in the post-pandemic era.