Kingdee Healthcare Files IPO Prospectus: Built 600 Internet Hospitals in 4 Years with Over RMB 10 Billion in Mobile Transactions
Previously, the National Health Commission formulated and issued three documents: the “Administrative Measures for Internet-based Diagnosis and Treatment (Trial),” the “Administrative Measures for Internet Hospitals (Trial),” and the “Standard Specifications for Remote Medical Services (Trial).” In the eyes of many entrepreneurs who have been continuously exploring internet healthcare, this undoubtedly signaled a policy “opening” and “liberalization.”
As the state actively guides and supports the “Internet + Healthcare” development model, skepticism within the industry—whether among internet companies, brick-and-mortar hospitals, or investors—is gradually waning.
Thus, “Internet + Healthcare” services appear to represent a new direction for the development of the healthcare industry.As early as 2014, Kingdee Medical began deploying the business model and development framework for “Internet + Healthcare” services, continuously leading the transformation of mobile internet hospitals.
Currently, Kingdee Healthcare has covered more than 600 mobile internet hospitals across China, connected with 30 million patient users, facilitated 81 million transactions, achieved a mobile transaction volume exceeding RMB 10 billion, and cumulatively saved patients over 50 million hours in medical consultation time.
To this end, a VCBeat (WeChat ID: vcbeat) reporter conducted an exclusive interview with Ling Zhi, General Manager of the Innovation Business and Solutions Center at Kingdee Medical, during the 5th Internet+ Healthy China Conference and the 2nd Healthy China Hangzhou Summit in 2018. He revealed Kingdee Medical’s key to success: hospital-centric Internet+ healthcare services, and proposed new directions for consideration.
Since entering the "Internet + Healthcare" services industry, Kingdee Medical has consistently adhered to a hospital-centric approach.To date, more than 3,000 hospitals and healthcare institutions have adopted Kingdee Healthcare’s products and solutions, including “Digital Hospital,” “Mobile Internet Hospital,” “Cloud Hospital,” and “HRP.” Among them, over 600 hospitals have partnered with Kingdee Healthcare to co-develop “Mobile Internet Hospital” platforms.
Compared with third-party platform-based internet healthcare, Kingdee Medical’s approach has achieved the following effects:
First, hospital-led internet healthcare ensures the quality of diagnosis and treatment;
Second, it is deeply integrated with hospital information systems, ensuring comprehensive data integrity and establishing a complete closed-loop for diagnosis and treatment.
Third, to complement the services of physical hospitals, hospitals can schedule doctors to provide online services.
For patients, trustworthiness is more important than accessibility.“Internet + Healthcare” is a model that integrates online and offline services. Only by placing hospitals at the core can safer, more reliable, convenient, and continuous healthcare services be provided to patients.
“Internet + Healthcare,” as a new phenomenon in the era of mobile internet, has attracted significant attention from the medical community, regulatory authorities, and public opinion since its inception.
In 2015, Song Shuli, spokesperson for the National Health and Family Planning Commission (NHFPC), stated that online activities involving medical diagnosis and treatment were prohibited; physicians could only provide health-related consultations via the internet and were not permitted to engage in medical diagnosis and treatment. This was interpreted by external observers as a clear ban on “Internet healthcare” by the NHFPC.
The National Health and Family Planning Commission’s concerns are well-founded. Today, with the rapid development of mobile internet, people believe that “Internet Plus” can be integrated with many sectors; as long as these sectors are organically combined with the internet, they can create new avenues for growth, as seen in “Internet Plus Education.” However, “Internet Plus Healthcare” cannot be simply equated to a straightforward addition of the internet and healthcare.
Internet healthcare is a new application of the internet in the medical industry, encompassing various forms of health and medical services such as health education, medical information inquiry, electronic health records, disease risk assessment, online disease consultation, e-prescriptions, remote consultations, remote treatment, and rehabilitation, all delivered via internet-based platforms and technologies.
These services cannot exist independently of hospitals and medical personnel. For Kingdee Medical, hospitals remain the primary providers of healthcare services; therefore, internet-based innovations anchored in hospital operations are more likely to earn patient trust. Since launching its “Internet + Healthcare” services, Kingdee Medical has continuously explored and developed a business model and operational framework tailored to its needs.
Ling Zhi believes that the development of hospital-led internet healthcare services can be divided into three stages. In Stage 1.0, aimed at service improvement, hospitals open non-core medical services to patients via the internet, such as appointment registration, payment, and report retrieval. In Stage 2.0, hospitals gradually open up core medical services to patients online, including follow-up consultations and prescription issuance. In Stage 3.0, hospitals provide remote medical services in collaboration with medical institutions within medical consortia.
According to national reports, 80% of hospitals in China have currently implemented Phase I operations. Over the past few years, Kingdee Medical has continuously expanded its deployments across these three areas. Based on its practical explorations, the development of Kingdee Medical’s internet hospital construction can also be divided into three corresponding stages:
Phase I: Alleviating the “three long waits and one short consultation” pain points in medical services. Within hospitals, we optimized clinical service workflows, improved the quality of medical care, opened up non-core medical service operations, and integrated the end-to-end service flow from medical care delivery to patients and overall hospital operations.
To address the security and regulatory challenges associated with internet-based medical services, Kingdee Medical pioneered an innovative deployment model adopting a “security middleware + on-premise private cloud” architecture to safeguard data integrity and patient safety. This approach has incentivized deep integration within hospital systems, providing patients with a more comprehensive service and information support system.
“Internet + Healthcare” health services place greater emphasis on connecting out-of-hospital patients with other healthcare service providers, whereas current information systems are primarily designed to serve in-hospital medical staff. Therefore, Kingdee Medical has innovated its operational model by launching comprehensive and more professional brand promotion and marketing campaigns, while integrating online operations with offline outreach.
Ling Zhi stated that under the "Internet + Healthcare" service model, it is essential not only to improve healthcare services but also to ensure the quality of care, thereby achieving patient satisfaction.
In the second phase, Lingzhi believes that the focus should be on addressing the fundamental issues of healthcare by providing patients with core medical services. The limitation of Internet + Healthcare Services 1.0 lies in its failure to penetrate into the diagnosis and treatment stage, thus not fully leveraging the technological advantages of the internet. The utilization efficiency of scarce medical resources needs further improvement, and the impending aging society will require more medical services to meet growing demands.
On the other hand, as living standards improve, public demand for health and wellness has become increasingly prominent, with growing acceptance and recognition of internet-based medical services. Furthermore, continuous support from national policies is facilitating hospitals in delivering core medical services through the “Internet+” model.
Against this backdrop, Kingdee Healthcare has divided its “Internet + Healthcare Services 2.0” initiative into six business segments: “Internet + Healthcare,” “Internet + Pharmaceuticals,” “Internet + Insurance,” “Internet + Convenient Services,” “Internet + Health Management,” and “Internet + Financial Services.” This framework helps hospitals extend their service offerings by establishing core and ancillary medical services, including “Dedicated Physician” programs, online follow-up consultations, online electronic prescriptions with medication delivery, online laboratory and imaging test requests, expedited commercial insurance claims processing, AI-powered triage, express mailing of medical record copies, and in-hospital patient navigation and meal ordering.
Furthermore, Kingdee Medical has achieved deep integration with HIS/LIS/PACS/EMR systems to capture the most comprehensive patient information.
In the upcoming Phase 3.0, the primary focus is to build an internet-based model for medical consortia, namely establishing a platform and operational system for internet healthcare services centered around these consortia. To further develop this internet-based model for medical consortia, Kingdee Medical is continuously improving and refining its core businesses in "Internet Plus Healthcare Services."
However, Ling Zhi believes that to build a robust medical consortium model, Kingdee Medical must continue to upgrade its capabilities by enabling remote health record creation and precise appointment scheduling, thereby facilitating the more effective implementation of tiered diagnosis and treatment. In this regard, Kingdee Medical has already initiated strategic deployments. Building upon existing hospital information systems, it has established a foundational platform for internet hospitals. This platform allows primary care physicians to share patient information with higher-level physicians and specialists, ensuring seamless communication. It supports synchronization across mobile, PC, and web endpoints, and features a referral dispatch console that enables cross-organizational collaboration as well as visualized management of workflows and resources. Ling Zhi emphasizes that, more importantly, it is crucial to support management point systems and online teaching to truly integrate and activate the medical consortium.
Ling Zhi believes that Kingdee Medical has achieved rapid development over the years by consistently meeting the needs of all stakeholders.
For hospitals, Kingdee Medical has always adhered to actively responding to national policies, optimizing the medical consultation environment, improving service quality, and extending high-quality medical services to the grassroots level to provide convenience and benefits to the public;
For medical professionals, the focus is on helping them reasonably increase their income while improving work efficiency;
For patients, leveraging technology platforms to “let data do the running and spare patients the legwork,” thereby providing more convenient and trustworthy mobile healthcare services.
Case 1: Sir Run Run Shaw Hospital, Zhejiang University School of Medicine, with cumulative transaction amounts reaching hundreds of millions of yuan
Sir Run Run Shaw Hospital, Zhejiang University School of Medicine, is a public tertiary general hospital integrating medical care, teaching, and scientific research. It was funded by the renowned Hong Kong industrialist Sir Run Run Shaw and supported by the People’s Government of Zhejiang Province. Since its establishment in 1994, the hospital has continuously drawn on the successful experiences and management models of leading overseas medical institutions, achieving leapfrog development and positioning itself at the forefront of the internationalization of healthcare institutions in China.
In November 2016, Sir Run Run Shaw Hospital, Zhejiang University School of Medicine, partnered with Kingdee Medical to launch a mobile patient service platform, enabling end-to-end mobile services for patients from outpatient visits to hospitalization.
In 2018, the hospital launched in-hospital navigation, online health check-up appointment, and online examination appointment services. As of November 2018, the total number of card-linked users on its online mobile service platform reached 610,000, with daily appointment registrations reaching thousands. The cumulative number of appointment registrations exceeded 800,000, and the total transaction volume amounted to hundreds of millions of yuan, saving patients a combined total of approximately 63 years in consultation time.
Furthermore, this September, at Building No. 2 of the National Health Commission headquarters, Sir Run Run Shaw Hospital, Zhejiang University School of Medicine, was featured as a case study. Its president, Cai Xiujun, specifically shared insights on building an “Internet + Healthcare” platform, highlighting the hospital’s practical outcomes in internet-based healthcare and telemedicine in recent years.
Next, Sir Run Run Shaw Hospital, Zhejiang University School of Medicine, will continue to deepen its collaboration with Kingdee Medical, with the upcoming launch of its unmanned pharmacy services.
Case 2: The patient mobile service platform of the First Affiliated Hospital of Hunan University of Chinese Medicine has achieved a total transaction volume of RMB 350 million within two years of its launch.
The First Affiliated Hospital of Hunan University of Chinese Medicine, established in 1963, was one of the seven key national traditional Chinese medicine (TCM) hospitals developed during China’s Seventh Five-Year Plan period. It was designated as a National Clinical Research Base for Traditional Chinese Medicine in 2008 and selected as a construction unit for the National Inheritance and Innovation Project of Traditional Chinese Medicine in 2017. As the first Grade A tertiary TCM hospital in Hunan Province, it serves as the leading center for medical care, education, and research in TCM and integrated traditional Chinese and Western medicine in the province. The hospital’s distinctive TCM features and comprehensive capabilities have reached an advanced level among TCM hospitals nationwide.
Following the launch of the “Mobile Internet Hospital—Patient Mobile Service Platform” at the First Affiliated Hospital of Hunan University of Chinese Medicine, the institution became Hunan’s first provincial-level mobile internet hospital of traditional Chinese medicine. In addition to rolling out mobile services, the hospital has placed greater emphasis on medical data security and patient privacy protection. It has adopted an on-premises private cloud deployment based on Apusic middleware, along with a whitelist-based authorization mechanism, to ensure the security of patient information.
Since its launch and promotion on August 8, 2016, the First Affiliated Hospital of Hunan University of Chinese Medicine has demonstrated exceptional performance across various metrics. The cumulative number of users has exceeded 430,000; the average daily mobile payment volume has surpassed RMB 1 million; mobile payments for outpatient services account for over 60% of total outpatient revenue; the total number of registration appointments has reached 468,000; the total number of transactions has hit 1.35 million; and the total transaction amount has reached RMB 350 million.
Case 3: Deyang People's Hospital's Exclusive Physician Online Consultation Service, with Over 260 Physicians Onboarded Within Months of Launch
Deyang People’s Hospital, founded in 1943, was successfully accredited as a National Grade III Class A hospital in 2003. With comprehensive specialty departments and advanced equipment, the hospital integrates medical care, teaching, scientific research, and health management. It has been selected as a national pilot hospital for clinical pathways, named a “National Demonstration Unit for Improving Medical Services” for four consecutive years, and ranked among the Top 100 Prefecture-level City Hospitals in China’s Hospital Competitiveness Ranking for six consecutive years. In January 2018, it was honored as a Five-Star Hospital in the China Hospital Competitiveness Ranking, having received numerous other accolades.
To provide patients with more professional and convenient medical guidance and further alleviate the pressure on outpatient services, Deyang People's Hospital launched Kingdee Medical’s exclusive online physician consultation service in June 2018. Patients need only follow the hospital’s official WeChat account to access online consultations and enjoy “online consultation” services.
Within just a few months of its launch, the service has onboarded over 260 physicians, handled more than 60 daily consultations, accumulated over 9,000 orders, and achieved a total transaction volume of RMB 170,000, giving rise to a cohort of five-star outstanding physician representatives.
Case 4: Zhumadian No. 1 People’s Hospital Launches Online Prescriptions Through Multi-Party Collaboration
Zhumadian First People’s Hospital, established in 1951, is a comprehensive, multidisciplinary tertiary hospital integrating medical care, disease prevention, teaching, scientific research, and rehabilitation. In recent years, the hospital has introduced new management models, emphasized talent development strategies, strengthened specialty construction, and innovated service concepts, achieving simultaneous growth in both social and economic benefits. It has been successively honored with titles such as “Provincial Advanced Unit in Hygiene” and “Henan Province Advanced Unit in Industry Conduct Evaluation.”
In September 2018, Zhumadian No. 1 People’s Hospital, Sinopharm Holdings, and Kingdee Medical jointly launched an online prescription delivery service.Based on Kingdee Medical’s information platform, hospital physicians can intervene in electronic prescriptions online and have medications delivered to patients via express courier.
In addition, physicians can create custom tag-based groups for their patients, enabling them to review medical records and laboratory/test reports via mobile devices, conduct long-term tracking and management, and perform online follow-ups. This approach ensures the quality of care, not only making it more convenient for patients to seek medical attention and obtain medications, but also reducing the costs associated with medication management and distribution.
Furthermore, more than 3,000 hospitals and healthcare institutions, including Peking University Third Hospital, Xijing Hospital, and the First Affiliated Hospital of Kunming Medical University, have improved their medical services and patient care experiences to varying degrees through collaborations with Kingdee Healthcare.