Dr. Ying Yu on Clinic Innovation: First-Tier Cities Are Not the Ideal Choice for Opening Clinics—How Can Doctors Attract Patients? [2018 Primary Care Innovation Summit]

Yu Ying, CEO of Beijing Shui'an Youlin Clinic

Conference: 2018 Summit on Innovative Practices in Primary Care

Location: Landison Plaza Hotel, Hangzhou Huashengda, Zhejiang

Speaker: Yu Ying, CEO of Beijing Shui'an Youlin Clinic

In 2013, Yu Ying resigned from Peking Union Medical College Hospital. At the time, due to difficulties in obtaining approval procedures for clinics and other reasons, she abandoned her original plan to lead a community clinic. On May 4, 2014, Yu Ying officially joined Amcare as a partner, serving as the CEO of Amcare’s first comprehensive outpatient center. In September 2017, Yu Ying formally resigned and founded Beijing Shui’an Youlin Clinic.

At the 2018 Summit on Innovative Practices in Primary Care, Yu Ying shared her clinic’s experience with innovative services.

Below is a summary of Ying’s key insights compiled by VCBeat (WeChat ID: vcbeat), consisting mainly of five parts:

1. If the sole objective is profitability, running a clinic would be easy

II. Tier-1 Cities Are Not the Preferred Locations for Opening Clinics

III. Survival Strategies for Early High-End Private Clinics

IV. After Leaving Public Hospitals, What Do Doctors Use to Attract Patients?

V. Sharing of Operational Insights from Shui'an Youlin

I. If the sole objective is profitability, operating a clinic would be easy

Clinics are currently “hot.” From July and August of last year to the present, I have successively attended more than a dozen conferences on “clinics,” each of which was bustling with attendees. Everyone came to see what others were doing and saying, and to identify any clinics that stood out as profitable ventures.

In reality, those who are actually making money from running clinics do not attend such conferences. In fact, generating profit from clinic operations is quite straightforward: the smaller the scale, the better, and the service offerings should be diverse. This type of clinic can indeed become viable, with an investment payback period of just 3–6 months. Operators of such clinics do not attend conferences, as they see no need to draw on others’ knowledge or content; implementing reforms based on what they learn would likely undermine their profitability.

However, many people do not open clinics solely for profit; they may be driven by ideals and passion. For me, the reason for opening a clinic is simple. When I resigned in 2013, I stated my intention to establish a clinic, so now I am committed to seeing this path through, no matter how difficult it may be. Although my 13 years of work experience at Peking Union Medical College Hospital (PUMCH) are now in the past, all my philosophies and steadfast beliefs actually stem from my time at PUMCH.

II. Tier-1 Cities Are Not the Preferred Choice for Opening Clinics

The State Encourages Physicians to Venture into Private Practice by Operating ClinicsSince last year, in a bid to support the development of primary healthcare, policies have lowered entry barriers for chain clinic operations, abolished approval requirements for clinics, and encouraged general practitioners to establish their own practices. Nevertheless, despite government-level support, caution is still advised when opening a clinic.

For physicians who have spent over a decade working in public hospitals, opening a private clinic is an entirely unfamiliar path. As Dr. Yu Gang noted, when he embarked on this journey, he felt like giving up every day. Previously, Dr. Yu had risen to the positions of Department Director and Assistant to the Hospital President at a public hospital. However, after establishing his own clinic, he had to independently handle challenges such as team leadership and communications with investors. Indeed, entrepreneurship presents numerous difficulties.

While there are many initiatives driving this industry, the most effective ones are not found in Beijing or Shanghai, but rather in economically developed second- and third-tier cities such as Guangzhou, Shenzhen, Chengdu, and Hangzhou.In Beijing, Dongcheng District and Xicheng District ceased approving new clinics long ago. Statistics show that the ratio of approved public to private medical institutions in Chaoyang District is 1:1. I have heard reports that Chaoyang District will also halt the approval of new clinics. Furthermore, due to the stringent regulations governing clinic licensing in Shanghai, a black market has emerged.

However, policies in second- and third-tier cities are highly supportive and open. Taking medical insurance reimbursement as an example, it is virtually impossible for a newly established clinic in Beijing or Shanghai to gain approval for inclusion in the national medical insurance scheme. In contrast, in cities such as Hangzhou and Chengdu, clinics that meet the eligibility criteria can even enable patients to directly use their personal medical insurance account balances for payment. Therefore, Beijing and Shanghai are not the preferred locations for opening new clinics; the only viable options are high-end private clinics or low-end clinics located in the urban-rural fringe areas. 

III. Survival Strategies for Early High-End Private Clinics

First, it offers immigration medical examinations. At the time, many people aspired to immigrate to Europe and America, fueling a booming market for immigration-related health screenings. Statistics show that this niche segment accounted for over 35% of the total revenue in the medical examination market.

Second, targeting the high-end commercial insurance population. When foreign enterprises first entered the market, they brought with them substantial demand for premium medical services among their employees. Clinics such as United Family Healthcare captured 70%–80% of the medical service volume from this commercially insured patient pool, resulting in very high practice incomes for physicians at these facilities. In recent years, the number of affluent individuals in China has gradually increased, and they too have begun to choose high-end clinics for their healthcare needs. Meanwhile, patients’ healthcare-seeking habits tend to be stable, which means that high-end clinics are able to retain both the existing base of foreign commercial insurance holders and the newly emerging domestic affluent clientele.

Third, the team management system is self-contained. My visit to United Family Healthcare clinics left a deep impression; there is indeed much to learn from these established clinics.

On the one hand,Stringentphysician management and medical credentialing system. It is not the case that every physician from a public hospital can immediately begin practicing at United Family Healthcare. It takes six months from recruitment to clinical practice to cultivate their patient communication skills. Many clinics today are unable to achieve this, including my own clinic.

Although our doctors and nurses undergo continuous training after joining, they inevitably lack the deep medical cultural heritage that United Family Healthcare has cultivated over more than a decade. United Family Healthcare’s physicians are able to convey substantial information during patient consultations, a critical aspect often missing in most physician-run clinics. In such settings, doctors frequently limit their guidance to medication instructions without providing adequate rationale or explanation.

On the other hand,Rigorous Attention to Detail. Upon entry, security guards and cleaning staff guide patient flow and engage in brief interactions; the walls display comprehensive notices, including precautions for pediatric medication use.    

IV. After Leaving Public Hospitals, What Do Doctors Use to Attract Patients?

During my tenure at Peking Union Medical College Hospital, appointments with me were extremely difficult to secure, with scalpers even driving the registration fees up to over 6,000 yuan. In reality, however, patients are familiar with the reputation of medical experts as a category, rather than with any specific individual physician. This dynamic necessitates subsequent commercial operations, marketing strategies, and promotional efforts to attract patients.

First, practice perspective-taking. Physicians and patients often approach medical issues differently. Taking HPV vaccination as an example, physicians typically focus on the viral strains covered by the vaccine, its mechanism of action, the age range recommended by the WHO for vaccination, and potential adverse events. In contrast, patients are more concerned about why the eligible age ranges vary. This necessitates that physicians adopt the patient’s perspective to deliver personalized healthcare services.

Secondly, optimize management and carefully select products. Currently, many clinics have core products, but they fail to conduct adequate market research before determining them. It is essential to gain a deep understanding of customer needs, average market prices, and the advantages of competing products. Clinics must also consider whether competitors are improving their services based on customer feedback. This reflects a user-centric mindset, which differs from the traditional physician-centric approach.

Third, diversify patient acquisition channels. In the early stages, clinics can leverage physicians’ “fan economy” to identify seed users within communities located 1–3 kilometers from the clinic as the epicenter. Starting with these seed users, establish social WeChat groups, build trust through quality service, and cultivate the first batch of loyal patients. Subsequently, expand outward by leveraging key opinion leaders (“KOLs”) to drive traffic. It is also essential to build trust with patients’ families and residential communities, relying on word-of-mouth dissemination. Shui’an Youlin primarily achieved this second step by organizing training courses and providing pre-hospital emergency care services. After only one month of operation, the outpatient volume reached 12 patients by yesterday morning.

Furthermore, service radius and health insurance coverage are also critical. Typically, the service radius for pediatric clinics is 3–5 kilometers, unless they offer particularly attractive specialized services. Specifically, clinics specializing in the treatment of pediatric strabismus, myopia, and chronic diseases can be located slightly farther away; whereas clinics focusing on common pediatric illnesses or child healthcare must be situated close to their target customer base, with proximity being a key advantage. Meanwhile, in regions where health insurance is widely adopted, clinics must accept health insurance payments to avoid being marginalized.

V. Sharing of Operational Insights from Shui'an Youlin

First, the logic behind site selection. For instance, in Beijing, I located my clinic outside the Fifth Ring Road. Development in that area only began in 2016, but it is already adjacent to a high-end villa community and numerous newly constructed residential complexes. These developments predominantly feature large-floor-plan units, with an average size of approximately 160 square meters per household and a unit price of RMB 80,000 per square meter. Individuals capable of purchasing property in this area possess considerable spending power.

Meanwhile, we conducted preliminary surveys with the nearby neighborhood committees and real estate agencies to assess the average rental occupancy rates, rental prices, secondary housing prices, commercial property prices, and parking facilities in the surrounding area. Statistics show that the surrounding residential communities (excluding Tiandu Yuan) have a capacity of 200,000 residents across 40,000 households, with an occupancy rate exceeding 70% at the time. The average value of private cars owned by residents was over RMB 500,000, and a significant proportion of households had children. Therefore, we decided to select this location.

Furthermore, observations indicate that the resident population consists primarily of young families born in the 1990s, with a low utilization rate of commercial health insurance. Coupled with the prolonged reimbursement cycle for commercial insurance claims, this places significant pressure on the clinic’s cash flow. Consequently, we opted to forgo integration with commercial insurance providers during the clinic’s establishment phase, thereby substantially reducing labor costs.

Second, the average transaction value is decisive. My clinic’s registration fee is 199 yuan, a price point that is relatively low compared to public hospitals. We adopt precision marketing strategies to lower the barrier posed by registration fees. Specifically, we establish connections with residential property management companies and neighborhood committees to obtain information on residents’ health status, including data on bedridden patients with advanced-stage cancer. This enables us to provide personalized home-care services—a capability that public hospitals lack.

Third, prioritize backend data analysis. For instance, on Mother’s Day, I posted a Weibo message encouraging users to scan a QR code to access health tips related to pregnancy and childbirth. Subsequent analysis of the backend data revealed the number of pregnant followers, their stages of pregnancy and postpartum periods, as well as the number of followers trying to conceive among our 300,000 Weibo fans. These insights will be highly valuable for our future online initiatives.