Zhongke Cloud Health Files IPO Prospectus: Scaling Chronic Disease Management Through Hospital Partnerships and Integrated Digital Platforms
Chronic disease management organizations have long grappled with the challenge of acquiring more users. In fact, after initially investing heavily in customer acquisition, these organizations have gradually shifted their strategies. Some are now adopting a B2B2C approach to reach end-users, leveraging models such as providing SaaS solutions to healthcare institutions to attract patients into chronic disease management programs, thereby growing their patient user base and enhancing engagement and stickiness.
Guangdong Zhongke Cloud Health Technology Co., Ltd. (hereinafter referred to as “Zhongke Cloud”) is such a company that acquires chronic disease patients by establishing its presence within medical institutions. This model differs from the one we mentioned earlier,Zhongke Cloud entered hospitals through Yunhuigou, a medical consumables platform, converting patients from hospitals that purchased chronic disease testing devices into its own user base. It then managed these chronic disease users via the Yunhuikang Chronic Disease Management Platform, thereby establishing a relatively comprehensive ecosystem.
How exactly did they do it? What entrepreneurial original intention drove them to do such things? VCBeat interviewed Wang Wenming, Chairman of Zhongke Cloud, to reveal the answers for us.
Wang Wenming’s decision to found Zhongke Yun actually stemmed from “personal motives.” His grandmother suffered from a chronic disease, but as he was based in Guangdong year-round and unable to be by her side, he had no way of monitoring the progression of her condition.
Wang Wenming, an early graduate of Guangzhou University of Chinese Medicine, joined Abbott’s medical business division during his internship and later worked at multinational corporations such as Johnson & Johnson, accumulating many years of experience in the healthcare sector. Confronted with the limitations of traditional healthcare in addressing certain challenges, he was inspired to leverage internet-based solutions to monitor his family’s health status remotely and assist them in managing their health while he was away.
In 2019, Wang Wenming founded Zhongke Cloud, which gradually grew into a team of 50 members. Most of the team members have work experience at Fortune 500 companies. The team even includes key talent from well-known enterprises, such as the former management team of Guangzhou Pharmaceutical Holdings and system architects from prominent IT firms. Zhongke Cloud even has its own hardware R&D department. Soon, their products and services were launched.
For Wang Wenming, it is not just he who faces such a dilemma; every family has the demand for health management through family doctor services. However, public hospitals lack the capacity to provide “family doctor” services to meet patients’ needs.Zhongke Yun’s third-party platform serves as a “family doctor,” helping patients with chronic diseases achieve better health management while alleviating the burden on physicians in public hospitals.
Zhongke Cloud achieves its goal of providing “family doctors” to patients with chronic diseases by building two major platforms: Yunhuigou and Yunhuikang.Through collaboration with hospitals, Zhongke Cloud will deploy its Yunhuigou platform for the sale of Class I and II medical consumables within hospital premises, providing patients with safe and traceable consumable products. Meanwhile, the Yunhuigou platform also sells Zhongke Cloud’s chronic disease management devices to external markets. The chronic disease management devices provided by Zhongke Cloud feature an all-in-one functionality for blood glucose, blood pressure, and heart rate management.
When a physician assesses the patient’s physical condition and determines that chronic disease management is necessary, the physician recommends that the patient purchase and bind Zhongke Yun monitoring devices via the Yunhuigou platform. Upon completion, the user can access services provided by the Yunhuikang Chronic Disease Management Platform:
When user monitoring data is missing, health customer service representatives will prompt the user to upload the data. When anomalies are detected in user monitoring data, such as elevated blood glucose or blood pressure levels, the system will send alert notifications to the user’s family members and the Yunhuikang operations team. Upon receiving a ticket and addressing the alert, health customer service representatives will conduct an in-depth investigation into the cause of the anomaly, such as whether the user forgot to take medication or experienced changes in lifestyle. Professional physicians from Zhongke Cloud will then perform assessments and resolve the issue.
When abnormalities persist for two to three days, Zhongke Cloud will engage the physicians at the hospital managing the patient. In addition to accessing the patient’s historical information through the hospital’s HIS (Hospital Information System), doctors can query past monitoring data via Zhongke Cloud. This enables a comprehensive assessment of the patient’s condition and facilitates timely diagnosis and treatment.
In contrast to other internet healthcare platforms that manage chronic diseases for users by remotely assigning physicians online, Wang Wenming believes thatThe advantage of the Yunhuikang platform lies in its collaboration with local hospitals and medical institutions. Physicians at these hospitals have a thorough understanding of patients using the Yunhuikang platform, including their medication regimens and medical conditions. Compared to other internet healthcare platforms, Yunhuikang has established a private-domain service traffic stream for physicians.
Collaborating with hospitals is not solely driven by the aforementioned objectives. In fact, partnering with them,In particular, partnerships with public hospitals at the secondary level or above are pursued due to the significant influence of physicians. The conversion rate for purchases of chronic disease management monitoring devices through physician recommendations can exceed 90%.Recognizing this opportunity, Zhongke Yun is leveraging its own strengths to expand into the hospital market while also seeking city-level partners familiar with the hospital sector to jointly drive market growth, after establishing benchmark hospitals.
Currently, over 50 medical institutions in Guangdong Province have deployed the Yunhuigou platform. Leveraging the R&D capabilities of Zhongke Cloud, the company is also exploring the development of uric acid and blood lipid monitoring devices and will continue to launch new monitoring equipment. Patients can simply scan a QR code and make payments at hospitals where the Yunhuigou platform is available to purchase the corresponding monitoring devices and link them to the Yunhui Kang Chronic Disease Management Platform.
For Zhongke Cloud, it is still in the early exploration stage. Its key focus lies in educating physicians through its operations team to help them identify patients suitable for inclusion in the Yunhuikang Chronic Disease Management Platform. Through physician assessment and referral, each hospital maintains an average daily growth of three high-quality users.According to estimates by Zhongke Cloud, each hospital is expected to maintain an average daily user growth of five. The number of members is projected to reach 10,000 by the end of the year.
Meanwhile, Zhongke Cloud is also striving to establish benchmark hospitals, continuously enhancing its operational service quality and refining its service system. The company plans to expand its reach to 100 medical institutions by the end of this year and enter the South China market in the second half of next year. Wang Wenming stated that Zhongke Cloud aims to partner with 1,000 medical institutions over the next three years and onboard 10,000 physicians onto the Yunhuikang platform.
Having accumulated a base of 10,000 physicians and nearly one million patients under chronic disease management, Zhongke Cloud will launch its Cloud Clinic Platform.Similar to common internet hospitals, the Cloud Clinic platform addresses the pain point of chronic disease management patients who frequently need to visit offline hospitals. After online doctors issue prescriptions for patients, Zhongke Yun will provide medication delivery services through third-party service partners, offering more precise support for chronic disease management.By creating personalized cloud consultation rooms for physicians and providing a comprehensive suite of additional services, Zhongke Cloud believes it will transform doctors into operators, thereby significantly boosting their motivation.
To better achieve its objectives, Zhongke Yun not only focuses on the strategic development of its Yunhuigou and Yunhuikang platforms but also maintains healthy corporate cash flow through other business operations. For instance, it assists Grade A tertiary hospitals in establishing internet hospitals and provides operational support; it also helped Huangpu Customs build a smart mosquito trap platform to aid in the prevention and control of dengue fever outbreaks in southern China. In addition to its online services, Zhongke Yun is actively expanding its offline operations, such as establishing its own chain of clinics to provide in-person medical services for patients with chronic diseases.
To accelerate Zhongke Cloud's strategic layout,Zhongke Cloud plans to raise RMB 60 million in angel-round investment in 2020.The financing will be primarily used to achieve the goal of expanding to 1,000 medical institutions, as well as to support team operations for physician network expansion. Additionally, the funds are planned to be allocated toward establishing service systems, optimizing system platforms, and researching, developing, and iterating medical devices and equipment.
Wang Wenming stated that the most profound insight gained from transitioning from traditional healthcare to internet-based healthcare is that “the path of internet healthcare is both promising and arduous. Achieving profitability remains considerably challenging for both large corporations and startups.” He further emphasized that, for any enterprise, it is more critical to first establish cash-flow-generating businesses, and then strengthen the service system to genuinely build connections with physicians and patients. Zhongke Yun will continuously optimize its service system and product structure throughout this process. For Zhongke Yun, the company will remain firmly rooted in the field of chronic disease management.
Wang Wenming emphasized that, as a startup, it is essential to stay true to its original mission. For Zhongke Yun, this mission is first and foremost to help families maintain their health, followed by bringing these services to market so that more users can benefit from them, rather than merely seeking capital validation.The essence of internet-based healthcare is medical care; greater attention should be paid to medical services, enabling physicians to alleviate their own workload pressures while delivering higher-quality care to patients.