Ping An HealthKonnect: The Rise of China's Top Healthcare Unicorn Serving Over 800 Million People in Two Years
Recently, in the 2018 “Top 100 Future Healthcare Companies” China Healthcare List released by VCBeat (WeChat Official Account: vcbeat), Ping An HealthCare Technology ranked first, with a valuation of RMB 55.3 billion.
It is reported that Ping An Health Insurance Technology, established in 2016, has provided medical insurance and commercial insurance management services to over 200 cities and a population of 800 million within just two years. Its automated commercial insurance operations network has been integrated with more than 5,000 hospitals, and the “City One-Account Pass” app has been launched in 68 cities. The company raised $1.15 billion in its first round of financing, reaching a post-money valuation of $8.8 billion.
To gain a deeper understanding of this rapidly emerging “blue-blooded unicorn,” VCBeat (WeChat Official Account: vcbeat) conducted an in-depth interview with Zheng Yi, Deputy General Manager and Chief Medical Officer of Ping An HealthCare Technology, during the “2018 Top 100 Future Healthcare Companies” Forum held in Beijing. In the interview, Zheng Yi disclosed for the first time the company’s business philosophy, big data-based application practices, and future development plans.
According to reports, Ping An Health Insurance Technology is a member of the “Healthcare” segment under the Ping An Group. Its business primarily serves China’s basic medical insurance and health administration systems, commercial insurance companies, healthcare institutions, and the pharmaceutical distribution sector. Against the backdrop of national policies encouraging “public-private partnership” and promoting commercial health insurance, Ping An has actively responded to state initiatives by engaging in various forms of cooperation in medical insurance operations. The aim is to assist medical insurance administrative authorities in better managing medical insurance funds, thereby achieving the goal of “One Reduction and Two Improvements” (reducing healthcare costs, enhancing coverage levels, and improving the patient experience with medical services).
It is reported that as early as 2013–2015, Ping An’s critical illness insurance business won bids in 13 cities and prefectures, including Shanghai and Henan Province, earning widespread recognition from the government and the public for its stable operations and high-quality services. During this period, Ping An also actively promoted the “Smart Medical Insurance” model, signing contracts with 108 cities. Its independently developed “Intelligent Audit Eagle Eye System (FWA)” received the First Prize for Financial Innovation in Shenzhen. In September 2016, Ping An HealthCare Technology was spun off from these businesses in response to market demands and trends, and was formally registered and established in Huangpu District, Shanghai.
According to Zheng Yi, Ping An Health Insurance Technology is positioned within the Group to deeply participate in the construction of its broader healthcare ecosystem. It primarily operates from a government-facing (to-G) or business-facing (to-B) perspective, ultimately extending to end consumers (to-C) to form a closed loop, thereby enhancing service assurance levels in the fields of medical insurance and health administration. Additionally, it leverages the ecosystem synergies of Ping An Group’s commercial insurance companies and collaborates with other “big healthcare” entities within the Group, such as Ping An Good Doctor and Ping An Medical Technology. Together, they provide comprehensive intelligent solutions and technical services to medical insurance providers, commercial insurers, healthcare service providers, and individual users, helping to improve the experience of healthcare and urban lifestyle services.
Ping An Health Insurance Technology is committed to building a technology-driven managed healthcare service platform, with a focus on leveraging technology to drive product development and service innovation. It is reported that Ping An Health Insurance Technology is currently employing “cloud governance” as a means, powered by Ping An’s suite of advanced technologies—including biometrics, artificial intelligence, blockchain, AI, and cloud computing/big data—to deploy applications in the healthcare sector, integrate medical care, pharmaceuticals, and health insurance, and address the challenges facing these three sectors.
Zheng Yi introduced to us some application scenarios in the fields of medical insurance and commercial insurance where Ping An Medical Insurance Technology leverages technology empowerment.
Driven by profit, some hospitals and patients are taking risks, with fraudulent insurance claims such as card misuse, medication fraud, and “bed-hanging” remaining rampant despite repeated bans. This has caused significant losses to the medical insurance fund, while traditional approaches like whistleblowing and targeted audits can only achieve coarse-grained management. Once fraudsters become familiar with these rules, they adapt their methods accordingly. In response to these emerging tactics and challenges, Ping An Medical Insurance Technology is leveraging state-of-the-art facial recognition technology to build an intelligent medical identity verification system, seeking smart solutions to combat fraud.
It is reported that Ping An began providing smart healthcare insurance services to local medical insurance programs across China four years ago. By the end of 2018, Ping An Healthcare Insurance Technology had established a big data model encompassing more than 300 dimensions, enabling more precise identification of fraudulent and abusive practices through dynamic analysis. Compared with traditional rule-based engines, this big data model improved the effectiveness of fraud and abuse audits by five to six times, while reducing costs by 60% to 70%.
Another application involves conducting granular analysis of individual health or so-called population management, using models to predict personal health risks. In managing urban medical insurance populations, risk stratification can be applied to categorize the entire population into distinct groups: healthy individuals, those in a sub-health state, at-risk individuals, patients with chronic diseases, and those with complex conditions. Based on this stratification, corresponding management and support services can be matched to each group, thereby reducing costs while ensuring effective management.
“In addition to leveraging claims data for health management, we also aim to utilize behavior-based lifestyle data for population health management. By integrating these data with existing models, we seek to enhance our capability in assessing health risks. This approach not only helps prevent policyholders from providing false information but also capitalizes on the fact that many lifestyle factors have been proven to be closely associated with disease progression and health risks. From an application perspective, such behavioral data are highly valuable,” Zheng Yi further stated.
Subsequently, Zheng Yi summarized several key trends that will significantly impact the entire industry in the future. First, the integration of big data. Ecological information must be incorporated to drive better product innovation, including pricing and risk management. Second, value-based and outcome-based approaches. Currently, China’s National Health Commission and National Healthcare Security Administration are exploring refined management of overall medical costs through Diagnosis-Related Groups (DRGs). Therefore, product innovation should also be guided by value and outcomes, with active exploration in these areas. Third, patient- or individual-centricity. The ultimate goal of business-to-consumer (B2C) models is to further gain insights into and understand customers’ needs, thereby developing services and products better tailored to their personalized requirements.
From the perspective of data transformation across the entire healthcare industry, the sector has evolved from initially using data analytics to understand what happened and why, to conducting predictive analytics that forecast future events, ultimately achieving intelligent intervention. Zheng Yi explained that this represents the development trajectory of big data in the field of medical health management.
From the perspective of the healthcare ecosystem, big data offers a wide range of application scenarios that can impact every critical node across the entire medical ecosystem. These include how patients gain disease awareness, access care, and optimize diagnosis and treatment workflows, as well as enabling payers to develop new products, manage healthcare quality, and improve operational efficiency. From the government’s standpoint, big data supports explorations in pharmacoeconomics, providing an evidence base for performance evaluation and the formulation of payment policies. For pharmaceutical companies, it has the potential to transform their entire R&D process.
Zheng Yi stated that addressing the long-standing “information silo” status of insurance companies and medical institutions, and achieving information connectivity between commercial insurers and healthcare providers, requires intermediary commercial platforms to strengthen further cooperation with the government and medical institutions. These platforms should leverage the market-oriented advantages of commercial entities and enhance data quality through technological means. Meanwhile, they should deeply explore market demands, build application scenarios, and create products that closely align with market needs. For example, in the field of commercial insurance underwriting, replacing traditional offline operational models with data platform-based screening can significantly improve underwriting efficiency and accuracy while reducing operational costs.
He cited an example. “Cloud Enjoy e-Connect,” a smart commercial health insurance service solution launched by Ping An Health Insurance Technology in October 2018, introduced disruptive innovations to its operating model. By establishing a tripartite new operating model integrating “online networked data, offline enrolled users, and AI,” it leverages resource-sharing effects. Ultimately, through the combination of business model, products, and technology, this solution helps commercial health insurance clients enhance efficiency, quality, and service experience while reducing costs.
Regarding why investors are bullish on Ping An Healthcare Technology, whose post-Series A valuation has become unparalleled in China’s broader healthcare sector, Zheng Yi explained that Ping An Group’s “finance + technology” empowerment and its leading corporate culture have undoubtedly been the driving forces behind Ping An Healthcare Technology’s evolution—from its incubation within the Medical Insurance Division of Ping An Pension & Health Insurance in September 2016 to its emergence as an independent unicorn in China’s broader healthcare sector. These factors also constitute a key reason for gaining investor recognition. In addition, rich practical experience and precise insights into customer needs represent another core advantage underpinning the company’s rapid growth.
“‘One Reduction, Two Improvements’ has always been the operational principle of Ping An Health Insurance Technology. Moving forward, Ping An Health Insurance Technology will continue to implement the ‘Healthy China’ strategy, further advance and refine various solutions and technological innovations, expand business scenarios, increase business traffic, and integrate residents’ health and daily life needs. By covering healthcare, wellness, insurance, personal services, and comprehensive urban services, we aim to continuously enhance industry service standards and strive to make due contributions to deepening healthcare reform,” said Zheng Yi.