Meihe Medical's Yu Gang: Specialty Doctor Groups Embrace Policy Tailwinds to Enable Dignified Earnings for Physicians – 2018 Primary Care Innovation Summit

Yu Gang, Founder of Meihe Medical Group

Conference: 2018 Summit on Innovative Practices in Primary Healthcare

Location: Radisson Plaza Hotel Huashengda, Hangzhou, Zhejiang

Speaker: Yu Gang, Founder of Meihe Medical Group

It has become commonplace for physician groups to open clinics. Prominent examples include the Hu Dayi, Song Donglei, and Zhang Qiang Physician Groups, all of which have established their own offline physical medical institutions. On April 25 last year, Yu Gang, a 60-year-old pediatric ophthalmology expert, founded Meihe Medical, formally announcing the establishment of his own hospital, clinics, ambulatory surgery centers, and optometry centers, as well as the creation of the Baobao Yan Physician Group.

Yu Gang is one of the first renowned physicians in China to pioneer online medical consultations via the internet and build his own personal brand. With 510,000 followers on Weibo, he ranks first among doctors nationwide in patient visits on “Haodf Online,” with over 74 million views. Children affectionately call him “Grandpa Yu Gang.” After riding the wave of social media popularity on Weibo and WeChat during the era of internet celebrities, he enthusiastically led a team of more than 40 people to launch ophthalmology-focused live streaming, short videos, clinics, and ambulatory surgery centers.

At the 2018 Summit on Innovative Practices in Primary Healthcare, Yu Gang shared his past entrepreneurial experiences, reflected on insights gained during the first year of founding Meihe Medical, and addressed various concerns raised by external parties.

Below is a summary of Gang’s key insights compiled by VCBeat (WeChat ID: vcbeat), which primarily consists of four parts:

I. On the Environment: The Development of Specialty Physician Groups Welcomes a Policy Tailwind

II. On the Original Intention: The Idea Took Root While Working in the Public Sector; This Is My Third Venture

III. On Entrepreneurship: A Year of Many “Unconventional” Pursuits

IV. Addressing External Concerns

I. The Environment: Policy Tailwinds Boost the Development of Specialty Physician Groups

“This remark was made by me two years ago at the First China Physician Group Conference, when I served as Assistant to the President and Director of the Department of Ophthalmology.”

To this day, private clinics still have areas that need improvement. For example, the level of openness is not high enough. Yesterday, I attempted to systematically visit a pediatric clinic in Hangzhou, but for various reasons, I was unable to enter; I was even prevented from looking through the glass doors. Recently, I conducted field visits to outpatient surgical centers at private hospitals in Hangzhou, Shenzhen, Shanghai, and Boao, which provided me with significant insights.

However, it is encouraging to note that the private clinic sector is currently experiencing a highly favorable landscape. Factors such as the allowance of multi-site practice and independent practice, the recognition of internet healthcare, and significant attention from capital markets have created abundant opportunities—a situation I once described with the poetic metaphor, “As if overnight a spring breeze had come, bringing blossoms to thousands of pear trees.” Nevertheless, how to seize these opportunities and leverage the advantages of physician groups remains a topic that warrants collective discussion among industry practitioners.

II. On the Original Intention: The Idea Took Root While Working in the Public Sector; This Is My Third Venture

I believe that every doctor leaving the public healthcare system should ask themselves:

In 2003, I resigned from my position for the first time. Prior to that, I had served as the director of the Eye Hospital in Zhangjiakou, Hebei Province, for 12 years. During my tenure, we operated seven cross-provincial eye care centers, nine cross-provincial optometry and eyewear dispensing centers, and seven local medical aesthetics and plastic surgery centers. We also established optometry and eyewear dispensing centers at Beijing Friendship Hospital and Peking Union Medical College Hospital. In 2002, I collaborated with private capital for the first time in Beijing to co-found Huade Eye Hospital. This marked my team’s and my first entrepreneurial venture. However, when I left the eye hospital, all my accumulated experience effectively reset to zero, requiring me to start anew.

In 2004, I joined Beijing Children’s Hospital to lead the development of its ophthalmology department. The reality of the department at that time was vastly different from what I had envisioned: there were only three staff members in the entire division, with an annual outpatient volume of 10,000 visits and an annual revenue of just over RMB 600,000.

By 2014, after a decade of development, our ophthalmology department had grown to include 29 chief and associate chief physicians and 96 ophthalmic professionals, with an annual outpatient volume of 220,000 visits and annual revenue exceeding RMB 100 million. Over those ten years, my co-founder Wu Qian and I led our team in building a “pediatric ophthalmology empire,” marking my second entrepreneurial venture. At that time, I realized that even within the public healthcare system, it is highly meaningful to establish branded departments and cultivate personal professional brands.

In 2017, I embarked on my third entrepreneurial venture, co-founding Meihe Medical Group with Dean Zhang Feng.

On Entrepreneurship: A Year of Pursuing Many “Distractions”

The most critical factor in launching a physician group is that partners have a deep understanding of one another. Director Wu Qian has been my colleague for 27 years, and President Zhang Feng has been my colleague for 25 years. Both were once my students; now, they are my mentors.

At the inception of our venture, we clearly defined three strategic directions:

Therefore, in our first year of startup, we engaged in many activities not directly related to physician groups. We traveled to the Qinghai Plateau at an altitude of 2,700 meters to provide village doctors with training on eye care; organized experts to make seven trips to Yunnan and Guizhou provinces to conduct volunteer teaching and free clinic services; and partnered with Baidu Health to provide free ptosis surgery for three left-behind children from mountainous areas. Our public welfare initiatives were covered in full by the program “Super Clinic.”

Engaging in public welfare initiatives inevitably requires a solid financial foundation. Although we are still in the startup phase, with limited funds and a heavy workload, I believe there are many endeavors more rewarding than simply making money, and public welfare is one of them. Therefore, we have organized 16 doctors, nurses, and optometrists to conduct six rounds of volunteer teaching and free clinic activities. I believe that as we develop our physician group, we should strive to sustain our public welfare efforts and fulfill our responsibilities as physicians.

Previously, when people called me a renowned physician, I embraced that identity and maintained an air of superiority. However, upon leaving the public healthcare system, it became essential to adapt to the current landscape. On one hand, I needed to shed my pretensions and engage in more down-to-earth practices. On the other hand, I aimed to provide differentiated medical services. Over the past year since founding our venture, our team of experts has delivered high-quality surgical outcomes and developed numerous advanced, specialized programs for pediatric care.

III. Bottlenecks: The Two Biggest Challenges Currently Under Consideration

First, recruiting renowned physicians. At times, the cost of hiring a single renowned physician can reach millions, a level of expenditure that is often difficult to justify to investors. Second, retaining talent. On one hand, should equity incentives be offered to nurses, physicians, and optometrists? On the other hand, once a certain scale is achieved, can rapid replication be implemented to ensure sustainable development?

IV. Addressing External Concerns

This was not our initial choice; at the time, we approached it with a trial-and-error mindset. Over the first year of our startup journey, I encountered three unexpected outcomes: First, patients’ acceptance of mid-to-high-end medical services is remarkably high. Second, the path for specialists from public tertiary hospitals to leave and launch their own ventures is indeed viable. Third, patients have adapted very well to the clinic-based care model. To date, some of our specialists see more than 80 outpatients per day, sometimes requiring appointments, and certain surgical procedures are already booked out for two and a half months.

In fact, I have always been focused on three types of initiatives: those that tertiary hospitals are unwilling, afraid, or unable to undertake. This means we may need to pioneer many uncharted areas. Recently, I have attempted to integrate principles from aesthetic medicine into pediatric plastic surgery, which will bring us new insights and opportunities. We are preparing to establish China’s first Consultation and Guidance Center for Pediatric Genetic Eye Diseases, with a network comprising leading domestic and international experts in genetic eye disorders.

To date, I have yet to reach a definitive conclusion on this matter. Through discussions with new partners and hospital presidents, I have realized that my perspectives are evolving. I am uncertain which of these two priorities should take precedence, and thus I wish to engage in a discussion with everyone on how to achieve both simultaneously.

Regarding financing, I believe the first step is to conduct a self-assessment to identify the gap between the current status of the project and its established goals. Secondly, one must exercise restraint and avoid overestimating their capabilities, instead proceeding in a pragmatic and steady manner. When deciding between building a century-old enterprise and seeking capital market involvement, it is essential to comprehensively evaluate your own circumstances. If capital is scarce, leverage external funding to drive growth; however, if funds are abundant, focus on building a sustainable, long-lasting business.

For Meihe Medical Group, our defined scope of business encompasses both medical and surgical pediatric ophthalmology. Pediatric ophthalmic surgery falls under surgical services, while optometry, glasses dispensing, and common pediatric eye diseases are categorized under medical ophthalmology. In the future, we will shift towards more intensive medical care, assuming greater risks and social responsibilities. Our goal for this year is to establish day-surgery centers and “Healthy Eye Care Huts” for children’s eye health across China.

Currently, pediatric investments in China fall into two main categories. Pediatric surgery is largely overlooked due to its high barriers, significant risks, and scarcity of specialists. Investments in pediatric internal medicine tend to focus on light medical services, such as child healthcare, parenting support, and general outpatient convenience clinics. In contrast, our pediatric ophthalmology practice integrates both medical and surgical specialties. Our surgical team performed 500 procedures over the past year, while our medical side focuses on services such as pediatric optometry, glasses prescription, and myopia prevention and control. These two complementary pillars reinforce each other, driving balanced and robust growth.