Fan Shaofei, Chairman and CEO of Ping An WanJia Medical: Leveraging Health Tech to Empower the New-Generation Pharmacy-Clinic Model – Insights from the 2018 Primary Care Innovation Summit

On June 10, in Hangzhou, at the Frontier Forum on New Clinics held as part of the 2018 Summit on Innovative Practices in Primary Care organized by VCBeat, discussions centered on themes such as the expansion and standardization of new chain clinics, business models, and operational costs.

Fan Shaofei, Chairman and CEO of Pingan Wanjia Medical, is an old friend of VCBeat. As a veteran in the healthcare industry, he has deep insights and extensive experience regarding the current medical landscape and holds high expectations for the future of healthcare.

He believes that the theme of this VCBeat Primary Care Forum, “New Structure,” should be changed to “Restructuring” to be more appropriate, as the healthcare system has long been in urgent need of restructuring.

Over the next five years, 80% of the patient volume currently handled by hospital outpatient departments will gradually shift to primary care institutions, establishing them as offline traffic entry points. This is Fan Shaofei’s assessment of the healthcare industry.

So, focusing on primary healthcare, how can we reconstruct its services? Perhaps the platform model of Ping An Wanjia Medical offers valuable lessons. By building a platform, it has developed industry certification standards for primary care institutions, connected tens of thousands of grassroots clinics, and implemented a rapid-diagnosis model, thereby progressively exploring new approaches to primary healthcare delivery.

As a direct second-generation subsidiary of Ping An Group, Ping An Wanjia Medical has built a primary healthcare ecosystem platform, deploying a wide range of products including rapid consultation models and certification standards for primary care.

Fan Shaofei stated that platforms should lead industry development, integrate technology into industrial growth, and aggregate high-quality medical resources, thereby driving industry transformation and building a sustainable new ecosystem for primary healthcare.

Ping An Wanjia Medical began its strategic deployment in the rapid diagnosis sector as early as 2016. Through continuous research into the development pathways of rapid-diagnosis clinics, Ping An Wanjia Medical creatively introduced the concept of “Smart Rapid-Diagnosis Stores,” aiming to monetize products and resources and swiftly help these clinics transition their profitability models.

In fact, this model draws on the integration of overseas clinics with traditional pharmacies, giving rise to a new “pharmacy-clinic” format that already has numerous proven success stories, such as MinuteClinic. First, its advantages are evident: it is convenient and fast, with 46% of patients considering convenience (i.e., accessibility) when choosing where to seek care. Second, while all medical services in the United States operate on an appointment-based system, the pharmacy-plus-clinic model offers advantages in terms of consultation availability and turnaround time. Third, retail clinics are more affordable and cost-effective. Fourth, the staffing requirements are relatively modest, relying primarily on nurse practitioners and physician assistants to meet the needs of screening, diagnosing, and managing common conditions, as well as conducting health examinations. Compared with conventional care pathways, this approach reduces costs by more than 80%.

Based on this, Ping An Wanjia Medical’s quick-diagnosis model is positioned as a safe, convenient, and intelligent community pharmacy-clinic. It selects an existing community pharmacy for renovation and upgrading, dedicating 45 square meters to be transformed into a standardized clinic, thereby providing residents with medical services that can be accessed via appointment or walk-in within a 15-minute walk.

From a practical standpoint, Ping An Wanjia Medical employs diverse and intelligent medical technologies to support the clinical practice and operations of pharmacy-clinics.

Intelligent System. Powered by innovative technologies, the Ping An Wanjia Medical Cloud Clinic System helps pharmacy-clinics rapidly adopt information-based management through information systems and smart devices. The Wanjia Cloud Clinic enables multi-role, cross-platform interaction, offering user-friendly access anytime and anywhere across multiple terminals, including computers, mobile apps, iPads, WeChat, and all-in-one machines. The platform integrates all resources and services required for pharmacy-clinic operations, facilitating lean management and enhancing operational efficiency.

Currently, AI-based clinical diagnosis and treatment decision support systems, intelligent medical image recognition, and pathological classification have been applied in certain disease areas. Ping An Wanjia Medical’s “Medicine-Consultation Clinics” leverage intelligent diagnostic tools—such as smart fundus cameras, skin analysis devices, and remote ECG monitoring—to rapidly perform medical image analysis, thereby assisting physicians in improving diagnostic efficiency and consistency. In formulating treatment plans, these clinics also employ cognitive decision-making technologies to provide decision support for physicians. Research, development, and commercialization of technologies for natural language processing and human-computer dialogue are progressively deepening.

Undoubtedly, through the application of intelligent healthcare solutions, pharmacy-clinics will continuously improve medical quality, reduce healthcare costs, and enhance medical efficiency.

Internationally, the new model of pharmacy-clinics has already seen successful cases. Represented by CVS MinuteClinic in the United States, it is highly favored for meeting consumers' needs for convenient and quick medical care, offering a brand-new experience in diagnostic and treatment services. Ping An Wanjia Medical draws on the MinuteClinic model, tailoring it to national conditions and industry pain points to create its "Quick Diagnosis" model. In 2018, Ping An Wanjia Medical will continue to actively expand its network of safe, convenient, and intelligent community pharmacy-clinics.

According to relevant data, hospital outpatient services accounted for 62% of the healthcare market share in 2017, with revenues exceeding RMB 780 billion. With reforms in family physician systems and payer structures, along with policies encouraging the development of private hospitals, hospital outpatient services are projected to account for only 10% of the market share in the future.

By 2020, community health service centers will account for 35% of the market, with a total value approaching RMB 400 billion. At that time, private clinics will unlock significant growth potential, increasing their market share from less than 4% currently to around 20%, representing an absolute total exceeding RMB 200 billion.

Community pharmacies are also projected to capture a 10% market share, amounting to over RMB 100 billion. This is Fan Shaofei’s forecast and judgment for the future. Over the next five years, where will the outpatient volume diverted from hospitals under the tiered diagnosis and treatment system ultimately flow? Private clinics and pharmacies may well represent the future direction.

Therefore, Ping An Wanjia Medical has built a platform and ecosystem, developed frameworks, and established system standards, while connecting more than 50,000 primary healthcare institutions. It aims to share its proven expertise in this field with tens of thousands of primary healthcare service providers.

“The road may be long, but perseverance ensures arrival. We have taken solid steps forward and look forward to further communication and exchange with everyone in the future. We also hope to work closely with industry practitioners and implementers to explore China’s tiered diagnosis and treatment system,” said Fan Shaofei.

He stated that the day China achieves a tiered diagnosis and treatment system will be the day healthcare reform succeeds.