On the Road to Building a 'Chinese Model' for Internet-Plus Chronic Disease Management, Zhiyun Health Files IPO Prospectus

According to statistics from VCBeat, the digital health sector for chronic disease management saw 62 financing events in 2020, with total funding reaching nearly $1.6 billion, a 60% year-on-year increase. The average amount per financing round exceeded $25 million, significantly higher than the nearly $18 million recorded in 2019. Among these, Zhiyun Health raised over RMB 1 billion in 2020, making it the company with the largest financing amount. Chronic disease management has become the hottest topic in the internet healthcare industry in recent years, attracting widespread attention from various stakeholders.

The 2021 Digital Health Industry Investment Summit, recently held in Beijing, featured “Internet + Chronic Disease Management” as a key agenda item. Organized by the investment firm Reynold Lemkins China (Ruikai China) and co-organized by the Beijing Association for Trade in Services, the summit was attended by invited guests including Mr. Lu Qingjun, Director of the National Center for Telemedicine and Internet Medicine; Mr. Heng Shuang, Director of the Information Center of the Beijing Municipal Health Commission; and Ms. Yang Wenlin, CPO and Vice President of Zhiyun Health.

Among them, Ms. Yang Wenlin delivered a special report on “The Digital Development Path in China’s Chronic Disease Management Sector,” sparking heated discussion among the attendees.

When it comes to chronic disease management, Livongo, the U.S.-based intelligent chronic care platform, is widely recognized in the industry as a “milestone” company.

Founded in 2008, Livongo achieved a market capitalization of over $10 billion in just six years. Its business model primarily involves providing solutions for patients with chronic diseases, addressing the challenge faced by U.S. commercial health insurers in controlling costs, with B-side payments serving as the main source of revenue.

However, due to the fundamental differences between the healthcare security systems in China and the United States, Chinese companies cannot simply replicate the business models of U.S. digital health firms. Ms. Yang Wenlin believes that, currently, the payment landscape is still dominated by basic medical insurance and pooled funds for critical illnesses, with out-of-pocket payments and commercial insurance serving only as supplements. Therefore, it is not aligned with current realities for domestic chronic disease management companies to target commercial insurers as their primary clients. Achieving localized innovation and creating a “Chinese model” of “Internet + Chronic Disease Management” represents the main direction of exploration for domestic chronic disease management companies.

Rather than becoming a “Chinese-style Livongo,” domestic chronic disease management companies represented by Zhiyun Health are carving out a distinctive path of innovative development.

Taking Zhiyun Health, China’s largest digital chronic disease management platform, as an example, Ms. Yang Wenlin shared that, leveraging its self-developed hospital SaaS system, pharmacy SaaS system, internet hospital platform, and Zhiyun Health App, the company has connected diverse scenarios across healthcare providers, pharmacies, insurance payers, and communities. By digitally empowering various collaborators along the industry chain and implementing innovative, scalable solutions, Zhiyun Health has generated a robust network ecosystem effect, ultimately enhancing the efficiency and capability of chronic disease management.

After six years of deep engagement in chronic disease management, Zhima Health has also delivered a rather impressive “report card.”According to Ms. Yang Wenlin, as of December 31, 2020, Zhiyun Health’s hospital SaaS system covered nearly 2,000 hospitals in China; its pharmacy SaaS system served over 110,000 pharmacies. The company has explored sample management models across multiple regions and vertical sectors, establishing a one-stop chronic disease management and smart healthcare platform that reaches hundreds of millions of chronic disease patients nationwide.

Chronic diseases are characterized by their incurability in the short term, prolonged management cycles, and individualized patient needs. However, China has long suffered from an imbalance in the supply of medical resources. Secondary and tertiary hospitals, which account for only 35% of healthcare facilities, serve 90% of chronic disease patients, resulting in severe overcrowding. This not only leads to a poor healthcare experience for chronic disease patients, who often endure hours of travel and waiting time only to receive a few minutes of diagnosis.

Currently, Zhiyun Health has connected various stakeholders across the industry chain—including hospitals, pharmacies, patients, pharmaceutical companies, and insurers—to build a broader and more systematic ecosystem for chronic disease management services. By leveraging solutions such as Hospital SaaS systems, the Zhiyun Internet Hospital, and Pharmacy SaaS systems, it integrates in-hospital and out-of-hospital chronic care scenarios. This enables the provision of full-cycle health management for patients, spanning prevention, treatment, and rehabilitation, while helping healthcare professionals improve diagnostic and therapeutic efficiency, enhance chronic disease management outcomes, and increase patient satisfaction.

Furthermore, according to Ms. Yang Wenlin, against the backdrop of tiered diagnosis and treatment, and given the severe situation of chronic disease prevention and control in China, there is a critical shortage of standardized, one-stop digital management services for chronic diseases. Zhiyun Health is actively promoting the establishment of industry standards for chronic disease data. In late 2020, as the exclusive technology support provider, Zhiyun Health participated in the “National Chronic Disease Management Dynamic Cockpit” project initiated by the National Center for Chronic Disease Management, aiming to collaborate with more partners to address the challenges of “data silos and non-standardized information” in the field of chronic disease management.

(Yang Wenlin, CPO and Vice President of Zhiyun Health)

Certainly, building a “Chinese model” for “Internet + chronic disease management” is not an overnight endeavor; it requires collaborative efforts from all stakeholders across the industry chain, making it inevitably a challenging path. However, for Zhiyun Health, one thing is certain: it will continue to deepen its roots in chronic disease management, closely adhere to its mission of “bringing digital health into millions of households,” and connect all participants in the chronic disease management industry chain to benefit hundreds of millions of Chinese patients with chronic diseases.