Dnurse Completes Full Acquisition of Offline Specialty Hospital to Build a Vertically Integrated Diabetes Care Ecosystem

Recently, the development of "Internet + Healthcare" has been in full swing across China. On April 23, the Guangdong Provincial Internet Medical Service Supervision Platform was fully launched, with the first batch of 22 internet hospitals officially commencing operations.

Since the national government introduced the concept of “Internet + Healthcare,” the internet hospital model has been widely favored by the industry, emerging as a major trend. This is primarily due to three factors: First, internet hospitals rely on or have established their own physical medical institutions, providing a foundation for building general practitioner capabilities and enabling cross-regional collaboration between specialists and primary care physicians through online communication platforms. Second, they have developed comprehensive data systems, including electronic health record (EHR) systems, electronic medical record (EMR) systems, electronic prescription systems, and online physician order entry systems, which help promote the development of a tiered diagnosis and treatment system. Third, they facilitate the sharing of medical resources across all segments of Chinese society, allowing patients to access medical care more conveniently while reducing healthcare costs.

Since then, it has become a trend for internet healthcare companies to expand into offline services. In the field of diabetes management, many companies, including Tang Hushi (Sugar Nurse), have established offline diabetes service centers. Unlike other diabetes care companies, Tang Hushi directly enters the core area of medical care—hospitals.

As a leading provider of digital diabetes management services in China, Tanghushi acquired Beijing Sinocare Jianheng Diabetes Hospital in August 2018 through a wholly-owned acquisition. Established and operated for 27 years as China’s first private specialized hospital dedicated to diabetes care, the institution pioneered a deeply vertical, closed-loop “Internet + Specialized Hospital” service model for diabetes management in the country.

Sugar Nurse, established in Beijing in 2013, is a mobile internet company dedicated to digital diabetes management technologies. By leveraging the combination of “smart devices + intelligent decision-making,” it collects patients’ daily behavioral data through smart medical devices. Its Intelligent Decision Support System (IDSS), built upon a diabetes knowledge graph, provides real-time, automated, and personalized guidance and recommendations. Additionally, it offers 100% human-computer interaction services featuring reminders, prompts, encouragement, and interactive support, thereby meeting the self-management needs of diabetes patients and establishing a precise service platform for diabetes users.

To date, Tang Hushi (Sugar Nurse) has amassed over 1.2 million registered users. As a leading mobile internet company specializing in digital diabetes management services, why is it acquiring an offline specialized hospital through a full buyout? What new initiatives will be introduced for the “Internet + Specialized Hospital” model to deliver a deeply vertical, closed-loop diabetes care service? How can online and offline operations truly achieve synergistic development? VCBeat provides an analysis of these questions.

With 114 million diabetes patients, China is the country with the largest number of diabetes patients globally. The diagnosis of diabetes has become a condition managed through empirical medical practice; general endocrinologists, relying on established diagnostic and therapeutic techniques and adhering to guidelines for diabetes prevention and control, can independently diagnose diabetes and prescribe treatment regimens.

As is well known, there is currently no complete cure for diabetes. The globally recognized effective approach to diabetes prevention and control involves comprehensive post-diagnosis management, encompassing healthy diet, appropriate physical activity, pharmacological treatment, diabetes education, and blood glucose monitoring. The mere 6.6% rate of blood glucose target attainment reflects a fundamental lack of post-diagnosis diabetes management in China.

Chronic disease management needs to be divided into two distinct areas of practice: the first is diagnosis and prescription; the second is helping patients adhere to treatment.

Physicians’ diagnoses, along with hospital resources, medical service workflows, and profit models, are well-suited to managing acute conditions. However, the public healthcare system has also delegated the ongoing management of all chronic disease patients to these healthcare providers. Hospitals receive reimbursement for services such as diagnosis, assessment of treatment progress, and management of complications.

However, under the current healthcare payment system, the costs incurred by doctors or hospitals for patient follow-up activities—such as calling patients to schedule regular check-ups and encouraging adherence to treatment plans and lifestyle modifications—are not adequately reimbursed. As primary providers of medical services, public hospitals and physicians face constraints in post-diagnosis management of chronic disease patients due to insufficient medical resources, while also lacking institutional incentives to reduce healthcare costs and improve efficiency.

The second type of chronic disease management business also represents a significant shift in U.S. primary care practice: transferring adherence management for behavior-dependent conditions such as diabetes to more cost-effective and efficient mobile health tools that provide continuous data monitoring, metric analysis, personalized reminders, education, and real-time interaction. Examples include Livongo Health and myDario. This is precisely the digital diabetes management service offered by Tang Hushi (Sugar Nurse).

For many years, Tang Hushi has continuously extended its service radius based on the logic of closed-loop services. By leveraging leading digital adherence management technologies, it provides digital diabetes insurance services to commercial insurers such as Taikang Life and Ping An Group; offers patient adherence management solutions to pharmaceutical companies, including most multinational insulin manufacturers, to reduce user churn; supplies chronic disease membership systems to chain pharmacies and primary care clinics, enabling rapid acquisition of member health tags, increasing in-store visit frequency, and boosting product repurchase rates; and delivers digital diabetes management solutions and technical support to healthcare institutions in more than ten countries across Asia and Africa. In this way, Tang Hushi is gradually penetrating the vertical service chain encompassing patients, pharmaceutical companies, drug distribution, commercial insurance, and health management.

“However, the convenience of follow-up consultations and medication refills was still lacking to form a truly closed-loop service,” said Li Chengzhi. “It was not until July 17, 2018, when the National Health Commission released the Administrative Measures for Internet-based Diagnosis and Treatment and the Administrative Measures for Internet Hospitals, that internet-based diagnosis and treatment activities—such as online follow-up consultations for common and chronic diseases and online prescription issuance—had clear policy guidance.”

“Internet-based diagnosis and treatment activities must be anchored to offline physical medical institutions. We have assessed that the cost of building an in-house medical team is significantly lower than the subsidy costs associated with collaborating with part-time physicians. Furthermore, this approach substantially reduces the operational complexity of managing physicians, allowing us to concentrate our efforts on enhancing the experience of follow-up consultations and online prescription renewals for chronic diseases, as well as expanding our user base. This strategy infinitely expands the service radius that physicians can cover for the platform’s online users. Meanwhile, an in-house medical team is more conducive to accumulating and refining our knowledge graph and iterating our intelligent recommendation algorithms.”

Beijing Sinocare Jianheng Diabetes Hospital, China’s first private specialized hospital for diabetes, has become the chosen site for Tang Hushi’s expansion into offline physical facilities. Infused with internet-driven DNA, the new Beijing Sinocare Jianheng Diabetes Hospital is strategically located in the core area of Shangdi in Haidian District, radiating northward to cover the entire northern part of Haidian District and southward to supplement the underserved medical resources in the area north of Zhongguancun.

Li Chengzhi stated, “As a provider of digital diabetes management services, Tang Hushi’s acquisition and operation of Sinocare Jianheng Diabetes Hospital undoubtedly represents a significant step forward in perfecting the closed-loop service model for diabetes.”

Despite having a relatively well-established patient service workflow after 27 years of operation, the specialized hospital still needs to make considerable efforts to integrate online and offline services and truly implement internet-based healthcare.

Leveraging years of experience in internet healthcare development and adhering to the National Health Commission’s standards for graded evaluation of hospital smart services, Tang Hushi has independently developed an in-hospital information system and a patient management system that covers both in-hospital and out-of-hospital settings within medical consortia. This ensures the interconnectivity of patients’ medical information within a defined region, enabling hospitals to provide full-process, personalized, intelligent, and precise smart healthcare services.

Following the integration, Sinocare Jianheng Diabetes Hospital will build upon its personalized, precision diabetes management services by fully leveraging Tanghushi’s digital management platform. This will enhance off-site patient care—including follow-ups, monitoring, behavioral interventions, return visits, online prescriptions, and pharmaceutical services—thereby providing individuals with diabetes a closed-loop service ecosystem that spans from in-hospital to out-of-hospital settings and from offline to online channels.

Meanwhile, Tang Hushi will leverage Sinocare Jianheng’s offline qualifications and medical team to build an internet hospital platform, significantly expanding its service radius to provide online follow-up consultations and e-prescriptions for users on the platform. This will create a convenient, closed-loop service encompassing follow-up visits, adherence management, and medication procurement. The deep integration of healthcare institutions with mobile internet will determine the synergistic effectiveness of these two business models in diabetes care.

“Over the next five years, we will continuously enhance the quality and user experience of our digital diabetes services, improve platform stability, and attract more physicians and physician groups to join the platform. This will enable us to provide online follow-up consultations and prescription renewals to a broader population of patients with diabetes. Meanwhile, we will integrate this closed-loop service model with additional offline pharmacy chains to strengthen implementation effectiveness,” said Li Chengzhi.

Although Tanghushi’s online-offline synergy model is still in its adjustment phase, strengthening its presence in offline physical medical institutions and infusing “Internet DNA” into specialized hospitals under the traditional healthcare model represents a crucial step for Tanghushi in building a more highly verticalized, closed-loop service. Its comprehensive solution, which integrates management and treatment across the continuum from in-hospital to out-of-hospital care, from online to offline channels, and from data to decision-making, has the potential to provide patients with holistic management and therapeutic support.

From an industry perspective, “Internet + Healthcare” is flourishing. Diabetes medical services exist in a highly specialized, closed-loop format, offering a new model of internet-based mobile healthcare for chronic diseases that warrants attention and study.