Medical Informatics in Review: 2018 Chinese New Year Special Edition
Happy New Year, everyone! We wish all VCBeat readers health and happiness. As the Spring Festival approaches, the VCBeat content team has specially curated a series of Lunar New Year reports. We have compiled insights gathered over the past year—what we have seen, heard, and thought across various medical subsectors—into this comprehensive series.
This initiative is not only a testament to VCBeat’s in-depth engagement across various healthcare subsectors over the past year, but also provides readers with a comprehensive, one-stop overview of the entire evolution and development of the healthcare industry in 2018.
2018 was a year marked by frequent policy releases for the entire healthcare informatics industry. Whether it was the introduction of standards and specifications for hospital informatization, the issuance of guidelines on “Internet + Healthcare,” or policies further promoting the adoption of electronic medical records (EMR), these initiatives fully energized the market. This not only created new growth engines for traditional healthcare IT companies but also provided opportunities for internet companies that had been cautiously exploring the periphery of the healthcare sector. Below is VCBeat’s comprehensive review of 2018. In addition to this retrospective timeline, we have invited several industry leaders to share their expectations for 2019.
One-Year Review
In April 2018, to promote and standardize the development of hospital information systems, the National Health Commission formulated the “Standards and Specifications for Hospital Information Construction Nationwide (Trial)”. The document comprises five chapters and 22 categories, totaling 262 specific items, which clearly define the content and requirements for hospital information system development in the next phase.
In the past, the absence of established standards forced healthcare IT enterprises to navigate uncharted waters through trial and error, exposing them to significant market risks after product development. This document, however, has provided clear direction for corporate product research and development.
By referencing the document content, enterprises can gain a clearer understanding of hospitals’ needs in information technology (IT) infrastructure development during future product R&D, more accurately identify the niche market segments for their products, and assess the current development stage of their products within the ongoing IT infrastructure buildup. This will facilitate deeper analysis of market demand and future development trends.
Details: 《Standards Set! AI, Big Data, and IoT in Tertiary Hospitals to Be Implemented in These Directions》
In April 2018, the General Office of the State Council issued the "Opinions on Promoting the Development of 'Internet + Healthcare'." The Opinions permit the development of internet hospitals based on medical institutions. Medical institutions may use "internet hospital" as a secondary name and, building upon their physical facilities, leverage internet technologies to provide safe and appropriate medical services. This includes allowing online follow-up consultations for certain common and chronic diseases. Once physicians have access to patients’ medical records, they are permitted to issue online prescriptions for certain common and chronic conditions.
Encourage tertiary medical institutions within medical consortia to leverage artificial intelligence and other technological means to provide remote consultation, remote electrocardiogram (ECG) diagnosis, and remote imaging diagnosis services to primary care facilities, thereby facilitating real-time access, mutual recognition, and sharing of examination and test results among medical institutions within the consortia.
In June 2018, one week after Tencent announced a RMB 1.266 billion investment in Donghua Chengxin, acquiring a 5% stake in Donghua Software, Alibaba also made its move by partnering with Winning Health, another giant in healthcare informatics.
Winning Health announced that the major matter currently under planning involves individual major shareholders of the company negotiating with Yunxin regarding an equity transfer in Winning Health, with the expected transfer ratio reaching 5% or more. However, this equity transfer will not result in a change of control over the company. Based on recent discussions, both parties intend to launch deep and comprehensive cooperation in the “Internet + Healthcare” sector and further advance the upgrade of their strategic partnership.
2018 was destined to be an extraordinary year for domestic medical big data companies. It all seemed to begin after Haihong Holdings was renamed Guoxin Health.
Prior to the capital injection by China National Venture Capital Fund, Haihong Holdings reported operating revenue of RMB 184 million in 2017, a year-on-year decrease of 15.15%; net profit attributable to shareholders of the listed company stood at RMB 17 million, down 40.49% year on year. By April, following the company’s name change, Haihong Holdings’ market capitalization had exceeded RMB 40 billion, doubling its pre-adjustment valuation before the introduction of state-backed investors and business restructuring.
Following Haihong, several other Chinese companies involved in medical big data—WeDoctor, LinkDoc Technology, Quanyu Healthcare, and Medlinker—have also successively attracted investment from state-owned capital, with each securing financing of over RMB 500 million.
In September 2018, the Bureau of Medical Administration and Hospital Management of the National Health Commission issued the “Notice on Further Promoting the Construction of Information Systems in Medical Institutions with Electronic Medical Records at the Core” (hereinafter referred to as the “Notice”). As it pertains to core issues such as hospital accreditation and compliance, it has drawn significant attention from hospitals at all levels.
VCBeat (WeChat ID: VCBEAT) has found, after in-depth research, that the impact of this "Notice" on the healthcare IT market will be extraordinary. The rigid demand driven by policy will bring significant benefits to this market.
Meanwhile, VCBeat has also observed that this market features a wide variety of products, lacking unified standards in terms of naming and functionality, with significant price disparities. Hospitals undergoing informatization construction must carefully select solutions based on their specific needs to comply with the requirements set forth in the “Notice.”
Summary and Expectations
2018 was a year marked by fierce competition and vibrant dynamism. “Artificial Intelligence” emerged as the core force driving innovation and development in healthcare, a progress fueled not only by rapid technological advancements but also by standardized policy guidance. These two factors, akin to “the two wheels of a cart” or “the two wings of a bird,” jointly catalyzed profound transformations in the traditional healthcare industry, expanding the frontiers of medicine with unprecedented momentum.
2019 will be a year of grounded progress after a period of complexity and chaos. The development of artificial intelligence in the healthcare sector will become more mature and rational, with a greater emphasis on practical product implementation and the translation of applications into tangible results. Efforts will be focused on building an integrated healthcare ecosystem that fosters synergistic development and seamless convergence across clinical care, medical education, research, and management.
In 2019, B-Soft was officially renamed B-Soft Health. Currently, the company has identified big data and AI industry applications, internet hospital services, and health city operations as key strategic development directions. To drive breakthrough growth, it has adopted a new business group organizational model, establishing three major business groups: Healthcare IT, Healthcare Internet, and Healthcare IoT. The company is actively pursuing industrial layout centered on big data, smart healthcare (city-level), and health big data products.
In the future, the company will remain rooted in the healthcare information technology industry, continuously expand its comprehensive advantages, and increase its market share. Meanwhile, it will keep pace with industrial developments, explore emerging markets, and extend its integration into smart healthcare and health services. Focusing on intelligent medical information systems based on internet cloud technologies, big data, and artificial intelligence (AI) applications, as well as regional healthcare operations and maintenance services, the company aims to establish a business framework centered on big data applications, smart healthcare, regional health, and healthy cities. It will prioritize the expansion of intelligent medical information systems powered by big data and AI (Smart Healthcare) and regional healthcare operations and maintenance services (Healthy Cities) as its key strategic directions.
As the healthcare IT sector bids farewell to a bustling 2018 and steps into an even more vibrant 2019, on the occasion of the Spring Festival, I, together with all employees of Wonders Information, extend our best wishes to our colleagues in the healthcare industry for flourishing careers and good health!
In 2018, Wonders Information continued to expand and solidify its strategic layout across the “Three Medicals” (medical care, medical insurance, and pharmaceuticals). In the realm of medical care, the company achieved remarkable results in areas such as multi-campus hospital integration, county-level integration, cross-regional integration, and the national integrated platform. Regarding medical insurance, China’s first nationwide system for cross-provincial direct settlement of medical insurance expenses was officially launched, further promoting the integration of the Yangtze River Delta region. Meanwhile, an innovative medical insurance model based on Diagnosis-Related Group (DRG) point-value calculation was implemented in Guangzhou, leading the national reform of medical insurance payment methods. In terms of health services, Shanghai Health Cloud was designated as the central portal for health services in Shanghai, achieving full coverage across regions, hospitals, and business operations, and realizing breakthroughs in both operational revenue and user base. As a typical example of the national expansion of Health Cloud, “Taizhou Health” connected more than 400 medical institutions across the city, providing integrated services that include mobile payment for medical insurance, online settlement for hospitalization, rapid online claims processing for commercial insurance, and shared prescription dispensing. This comprehensively demonstrated a new future healthcare model based on the “Three Medicals Linkage.”
Looking ahead to 2019, the company will continue to center on its development strategy of “Connectivity, Integration, and Intelligence,” seize opportunities in “Health Cloud Services,” uphold Wonders Information’s corporate mission of “Creating a Better Life for People,” and contribute to the realization of Healthy China. Finally, we wish VCBeat continued success!
As the year draws to a close, reflecting on the development of healthcare informatization and internet-based healthcare over the past years, as well as Kingdee Healthcare’s steadfast growth, my deepest conviction remains that enterprises must strengthen their core competencies. Warren Buffett once famously said, “Only when the tide goes out do you discover who’s been swimming naked.” The ever-changing landscape has granted us the privilege of witnessing both the boom times and the harsh winters. Observing wave after wave of companies fall has only reinforced our entrepreneurial belief in honing our craft over a decade. Since initiating our strategic transformation in 2014 with the “New Four-Year” policy, we have adhered to a hospital-centric internet healthcare service system, acquiring a substantial base of high-quality public hospital clients. Our customer-success-oriented business philosophy has built a strong reputation, allowing Kingdee Healthcare to gradually establish a firm foothold in this industry.
Therefore, by 2019, we had gained sufficient confidence to stride forward, allowing our “cloud-first” business strategy to accelerate the company’s growth. Even if a capital winter were to arrive someday, we, who have long been dedicated to strengthening our core capabilities, will remain steadfast in our original mission and rise to the challenge. Ultimately, we aim to “bring sunshine into every hospital and warmth to every patient,” building a trusted healthcare technology service platform.
Heren Technology’s vision is “Technology Serving Health.” Its current business portfolio primarily follows a “3+1” model: digital healthcare (including Hospital Information Systems [HIS], electronic medical records, etc.), smart hospitals (integrating informatization and the Internet of Things), active exploration of digital health cities (regional smart healthcare and medical consortia), and platform- and data-based operational services.
The new-generation hospital information system represents Heren Technology’s most core R&D achievement over the past two years. Targeting large general hospitals, the system has completed pilot implementations with “seed” clients. Based on trial usage, the system has continuously enhanced functionalities across modules such as day-care wards, emergency department systems, admission preparation centers, clinical pathways, and HQMS.
Heren Technology closely follows cutting-edge information technologies such as big data, cloud computing, the Internet of Things (IoT), and blockchain, continuously exploring their integration with its existing software products and solutions. In projects such as Sir Run Run Shaw Hospital, the incorporation of technologies like blockchain and IoT has become a reality.