Secrets to Clinic Operation and Investment: Insights from 10 Leading Clinic Founders

By Luo Mei and Yang Xue

In recent years, clinics have become highly sought after by physicians and investors. It is reported that the number of clinics (including outpatient departments) in China grew from 217,000 to 230,000 in 2017. This means that more than 13,000 new clinics opened last year, with an average of over 35 new clinics opening daily. Due to low investment and operational costs as well as relatively low regulatory barriers for market entry, clinics in China have been expanding rapidly. In 2017, only 200 new hospitals were established, a figure far lower than that of new clinics.

In fact, the rising prominence of clinics began to spread like wildfire from 2015, when internet healthcare players expanded into offline operations, earning them the moniker “new-type clinics.”

These new types of clinics involve players such as directors of women’s and children’s hospitals, internet-famous physicians, digital health entrepreneurs, and investors. Centered on innovative medical models, they emphasize the service value of physicians and humanistic care in medicine. Adopting a dual focus on both patients and doctors, they fully integrate with emerging developments in healthcare services to provide high-quality, convenient, and effective medical and health services.

What Is the Secret to a Clinic’s Success? Physicians, Products, Services, Management, and Business Model—None Can Be Neglected. So How Should Each Segment Be Designed? What Is the Investment Logic? These Questions Were Answered at the First China Clinic Conference Hosted by DXY Recently.

Chuntian Medical Management is composed of renowned clinical experts and hospital management specialists from both China and abroad. It focuses on the investment, construction, operation, and management of obstetrics, gynecology, and pediatric medical institutions. Adhering to the laws of medical development, it emphasizes disciplinary advancement and pursues the progress of medical technology. The company primarily provides standard-setting and comprehensive solutions in disciplines, talent, technology, services, management, and innovation, aiming to build a professional and high-quality management system for women’s and children’s hospitals and to promote the development of women’s and children’s health.

“We are committed to becoming the most valuable medical management group specializing in obstetrics, gynecology, and pediatrics, serving the transformation and upgrading of China’s healthcare sector. We aim to provide patients with the best quality care and optimal medical experience at reasonable prices (Best quality, best experience, reasonable price),” said Duan Tao.

Duan Tao stated that early representative clinics were in dentistry and medical aesthetics, while obstetrics and pediatrics clinics are now developing rapidly. The obstetrics and pediatrics sector is generally characterized by a stronger consumer attribute than a medical one, with pediatric care placing greater emphasis on the patient’s consumption experience.

Meanwhile, pediatricians are more readily available in the labor market. As pediatricians typically receive the lowest compensation within hospitals and clinics have lower equipment requirements, the trend of rapid growth in pediatric clinics is evident, given the more favorable conditions for entrepreneurship in pediatrics.

He believes that the return on investment (ROI) should be the primary consideration for clinic investments. In addition to low upfront capital and operating costs, clinics can quickly reach the break-even point in the later stages. However, clinic operations also face the dilemma of an unsustainable business model. For high-performing clinics, the ROI can reach 30%, while under generally favorable conditions, it ranges from 10% to 15%. For investors, an initial investment of RMB 50 million yields a return of only RMB 5 million to RMB 6 million. Under such circumstances, although a single clinic can achieve revenue breakeven, this business model is not scalable for investment institutions.

Investment in chain clinics is inseparable from management span. The management span for cross-regional chains is too large, requiring investors to possess exceptional managerial capabilities, excellent coordination skills, a strong management team, and centralized management. To achieve the chain development of clinics, it is essential to replicate management models, reduce costs, and improve efficiency.

Therefore, what Chinese clinics lack most are professional managers—talents who can handle internal policy regulations and administrative approvals, while managing external operations and marketing. With outpatient revenue currently accounting for approximately half of a hospital’s total income, clinics can achieve substantial revenue through economical management under the guidance of professional managers.

Furthermore, attention must be paid to brand building for clinics. Duan Tao believes that while there are no issues with the online and offline operational systems, and although online traffic generation is regarded as a crucial stage for acquiring users, the fan conversion rate across the entire industry is actually only between 0.1% and 0.3%. This indicates that fan-driven traffic generates only a minimal volume of business for clinics.

This is not to say that online patient acquisition is ineffective; it can play a positive role in brand building and patient engagement. “As an influencer myself, I have had followers who began reading my Weibo posts when they were single and have now become pregnant, finally turning into my target customers. This is a form of intangible brand building,” said Duan Tao.

Regarding clinic positioning, Xing Yiqun, a highly popular professor in the Department of Leadership and Organization Management at Zhejiang University’s School of Management, stated: “From the patient’s perspective, illness and medical care are inevitable aspects of life. While hospitals focus solely on diagnosis and treatment, primary-care clinics should position themselves as comprehensive providers, encompassing prevention, equal emphasis on traditional Chinese and Western medicine, and rehabilitation.”

The report of the 19th National Congress of the Communist Party of China stated that people’s health is an important indicator of national prosperity and strength, and that comprehensive, full-lifecycle health services should be provided to the public. Under current conditions, can hospitals deliver such comprehensive, full-lifecycle health services? The answer is no. This presents an opportunity and direction for the development of clinics, but it requires enhancing the diagnostic and treatment capabilities at the primary care level.

For the general public, seeking medical care often involves registering for appointments at tertiary hospitals, which are typically overcrowded, and patients may be uncertain about which department to consult. If there were a convenient, accessible, trustworthy, and reasonably priced professional service, people would certainly be willing to pay for it.

This represents the latent demand for clinics, a trend further propelled by policy. Xing Yiqun believes that the future distribution of patient flow will be as follows: 70% at primary care institutions and 30% at tertiary Grade A hospitals.

“Before this trend emerged, ‘we focused on what we did best. There was only one path to success: leverage the strengths of our clinic and concentrate on those advantages.’”

Clinics are currently facing difficulties in attracting medical talent. Some clinics lack equipment or have outdated facilities, and the procedures for medical insurance reimbursement are cumbersome. Doctors’ working hours are identical to those at large hospitals, with no staggered scheduling. Patients are reluctant to visit these clinics. How can this vicious cycle be broken?

Xing Yiqun believes that 30% of consumers are willing to choose community clinics that are close and convenient. Therefore, the location of the clinic is particularly important. The key to opening in a business district is the location, which determines foot traffic; this is a hard requirement.

In terms of pricing, it is necessary to start with low-price promotions rather than aiming for high prices from the outset. However, lower prices mean reduced profit per unit, so volume must be prioritized.

Another crucial point is that doctor-patient communication must be approachable, leveraging the strengths of medical services. The core issue lies in trust. First, let the public understand what the clinic can do and how well it performs. Then, highlight the clinic’s unique features. Finally, ensure that tangible factors such as the clinic environment, orderliness, and standardized processes are well maintained. Doctors can remain permanently accessible through online platforms, which is entirely feasible via the internet.

Furthermore, inviting experts to practice at the clinic on a multi-site basis can help attract a segment of patients, allowing for the gradual establishment of stronger patient-provider relationships. Establishing partnerships with third-party service providers—such as information platforms, intelligent device manufacturers, and laboratory testing platforms—can help compensate for the clinic’s limitations.

“During this process, we must remain confident and press forward with courage; the future is bright, though the path ahead will be winding,” Xing Yiqun frankly stated.

Clinic Product Design and Implementation: Yang Zefang, Head of Dingxiang Clinic, Believes That Internet Product Thinking Should Be Introduced into Medical Service Products, with Effective Planning, Design, and Integrated Implementation Across Various Product Lines.

Regarding design products for clinics, he believes they can be categorized into tangible and intangible products. He emphasizes attention to product depth, length, width, and relevance, optimizing the combination of all products to maximize benefits for the clinic.

For instance, the "width" of a product refers to the number of departments a clinic needs. Is it always better to have more departments and greater breadth? The "length" pertains to the categories of clinical departments, such as pediatrics, health examinations, preventive care, and rehabilitation. Is it preferable to have large, comprehensive departments, or smaller, specialized ones?

Which services can be offered across these departments? Can the services provided by each department be interconnected to facilitate mutual patient referrals and generate profits for the enterprise? These factors cannot be overlooked. This is why Yang Zefang chose to expand into other specialties despite the strong performance of the pediatrics department at DXY Clinic—a move aimed at planning ahead for future contingencies.

If a particular product’s services happen to gain significant user traction over a couple of days, how should one respond to the subsequent influx of competitors and imitators? How can clinics ensure they possess the sustained capacity for continuous new product development and iterative product improvement?

After carefully considering the above questions, the first step Yang Zefang took was market research and needs analysis, aiming to structure his product portfolio based on market demand. He first leveraged DXY’s extensive data resources to develop user personas, as product design requires precisely identifying a market entry point amidst a cluttered landscape. For example, when DXY Clinic launched its weight management service, it discovered that the population with stronger willingness to pay was not those who were already severely overweight, but rather individuals with health awareness and concerns who were only slightly overweight.

Product thinking emphasizes not only market demand but also the product matrix. When designing medical service products, DXY Clinic first categorizes them into tangible and intangible products. The combination of these offerings across clinics forms the product line.

If a clinic offers a comprehensive product portfolio, its risk resilience and profitability will both increase in the long run. Taking DXY Clinic’s relatively complete pediatric product line as an example, clinical consultations and health examinations in pediatrics have revealed numerous unmet patient needs for services not yet integrated into its offerings. Consequently, DXY Clinic has developed a series of pediatric-focused products to address these gaps.

Meanwhile, leveraging the clinic’s existing patient flow, conducting data mining and organization on current patients to analyze their most pressing needs, aligning them with the products you can offer, and adopting this approach for customer education during new product promotions is a highly effective strategy that yields twice the result with half the effort. Dingxiang Clinic has mastered this methodology to perfection.

Moreover, DXY’s product philosophy places significant emphasis on medical service products, with the core offering of clinics being the resolution of patients’ health issues. Medical service products are designed to make healthcare tangible and perceptible to patients through clinical interactions. For instance, when administering an injection, nurses should inform patients about the specific measures taken to alleviate the pain associated with the needle stick.

Dingxiang Clinic delivers this suite of products in a quantifiable manner, with the aim of transforming high-quality offerings into replicable best practices that can empower more primary care clinics.

In traditional healthcare institutions and hospitals, doctors and patients are positioned on opposing sides. Patients seek high-quality services, while the distribution of medical resources is highly imbalanced. Under conditions of information asymmetry, effective communication between doctors and patients cannot be achieved, resulting in low patient compliance.

How Can Clinics Achieve a Win-Win Outcome for Patients and Physicians? Dr. Ou Qian, Head of Zhibei Pediatrics in Guangzhou, Provides an In-Depth Analysis of the Value of Clinic Services, Driving Progress in the Healthcare Industry Through Enhanced Patient Satisfaction and Clinic Development, While Upholding Physicians’ Commitment to Healing and Social Responsibility.

In her view, a win-win outcome for both the clinic’s interests and patient interests is essential to achieving the sustainable development of the clinic.

First, it is essential to help patients understand what specific services they are purchasing by paying consultation fees higher than those of public hospitals. Unlike public hospitals, which face a high volume of patients, private clinics provide service-oriented healthcare experiences. In public hospitals, each patient is typically allocated only five minutes for diagnosis and treatment.

For Zhibei Pediatric Clinic, a five-minute consultation cannot alleviate parental anxiety or address irrational demands. Here, the physician’s consultation fee is 500 yuan. A week prior to the appointment, nurses collect detailed records of the child’s daily diet, ensuring that the physician has comprehensive and clear information by the time of the visit. This enables the provision of targeted nutritional guidance. After the patient leaves the clinic, follow-up monitoring is conducted to assess adherence and outcomes. Therefore, this 500-yuan fee is not significantly higher than those at public hospitals. The clinic offers a comfortable environment, but more importantly, it provides the physician’s professional expertise, clinical competence, and respect for patients. By enhancing the value of medical services and involving patients in healthcare decision-making, patient compliance naturally improves. This fosters trust between physicians and patients, leading to better clinical outcomes and patient experiences, as well as a greater willingness to pay.

Next is to enhance physicians’ service orientation. When doctors deliver high-quality care, it is reasonable for them to charge relatively higher consultation fees, and they will not feel guilty. Offline clinics serve precisely as platforms that provide all physicians willing to offer patients high-quality medical services.

For physicians leaving the public healthcare system, becoming a social media influencer is often the fastest way to monetize their expertise. After gaining a large following, they can generate substantial annual income through advertising and group-buying promotions. However, for a large number of professional physicians who are not influencers, offline chain clinics offer a platform that allows them to relax and focus on patient care, while also receiving compensation commensurate with their skills. For instance, Zhibei Physicians provides doctors with dedicated administrative support teams. Doctors do not need to expend effort on insurance reimbursement or patient scheduling; instead, they can concentrate solely on their professional responsibilities, such as optimizing patient management. Similarly, offline clinics provide ongoing training and career advancement opportunities to reward physicians.

Unlike the hierarchical gaps and barriers found in traditional public hospitals, private clinics benefit from significantly lower communication costs among their medical teams. Ou Qian stated, “What I want to emphasize is that we have a mechanism for continuous optimization. Under current conditions, we cannot claim to achieve perfection immediately; instead, we are committed to continually improving our work. When adverse events occur, they are reported, and when disagreements arise, there is a feedback mechanism in place. As a result, internal communication costs within the team are very low, enabling us to make continuous progress.”

Private clinics can not only resolve conflicts between patients and doctors, but also significantly drive the development of the entire healthcare industry. Dr. Ou Qian shared a set of data: according to preliminary estimates by the National Health and Family Planning Commission, China’s total national health expenditure in 2016 was expected to reach RMB 4.63449 trillion. NetEase also reported that the average proportion of pharmaceutical spending in OECD countries stands at 16%. Based on this figure, 16% of RMB 4.63449 trillion amounts to approximately RMB 740 billion. However, what was the actual pharmaceutical sales volume in China? It reached RMB 1.7 trillion. This suggests that nearly RMB 960 billion could potentially be saved.

She believes that even saving just 10% of this RMB 960 billion (RMB 96 billion) would be worthwhile for the general public. “This is the spiritual drive that sustains me along the arduous entrepreneurial journey; it is more meaningful than being an internet celebrity and reflects the responsibility and value of physicians.” Only through offline chain clinics can we provide each user with customized, refined consultation and health management services, thereby reducing overtreatment and drug abuse, and enhancing the value of medical outcomes.

“Our single store achieved break-even in its fifth month, with customer satisfaction exceeding 98%. The average transaction value for Zhibei Doctors’ online consultations is RMB 191, with a peak of RMB 999. The number of paying members in our community has also surpassed 2,000.” Ou Qian expressed great satisfaction with these results.

“Mommy Knows” Pediatric Clinic, located in Shenzhen and not far from Zhibei Pediatrics, currently operates six self-run outpatient departments and two managed ones, according to its founder Liang Liang. The clinic is expected to expand to 10 locations this year.

Mami Knows Pediatric Clinic is a typical clinic with strong internet DNA, having transitioned from online to offline services. It has now expanded from a single entity to a chain operation. How does it replicate its clinic business model? Liang Liang explains from three dimensions—system, organization, and technology—how they serve both online and offline channels, creating a closed-loop service ecosystem that spans hardware, software, IT systems, and organizational structure, thereby exploring the replication of new business models.

From a systemic perspective, Mami Zhidao’s offline clinics have introduced a dedicated Net Promoter Score (NPS) system. Also known as word-of-mouth, NPS is an index that measures the likelihood of a customer recommending Mami Zhidao’s services to others. This is just one part of transforming clinic services through a standardized system.

To develop an operational system truly tailored to pediatrics, Mami Zhidao not only engaged a consulting team but also co-located its physicians, R&D staff, and product managers in a closed-door collaboration. Together, they developed standardized operational management modules for scaling clinic operations from 1 to N, enabling identifiable and traceable patient records, as well as evaluable and feedback-driven clinic quality and services.

In terms of organizational management, Mommy Health must also establish a closed-loop system. To ensure and achieve standardization and quality, Mommy Knows has established three departments for safeguarding these objectives. The first is the Quality Team, responsible for regular system tracking, reporting results, implementing improvements, and formulating improvement strategies and measures. The Quality Team must maintain its independence and public welfare orientation. The second is the Medical Committee, responsible for aligning all specifications and standards with physicians. The third is the Training and Management Medical Trainee Center, where every new physician, nurse, administrative staff, operations personnel, and marketing staff member must undergo rigorous training, followed by guidance from a standardized and onboarding team.

During the operational phase, the initiation team participates in the early stages of opening, while the Quality Department tracks outcomes. All departments discuss improvements to foster an open clinic culture, ensuring that the healthcare institution stays on course as it scales from one to many.

Healthcare service development in China follows divergent paths. High-end clinics adopt a service-oriented approach, centering on patient satisfaction, but their high-cost model is unsuitable for the broad base of the general population. Meanwhile, public hospitals are not only overcrowded but also suffer from uneven distribution of medical resources, placing a heavy burden on medical insurance funds and resulting in low patient satisfaction. Amidst this landscape, where lies the competitive advantage of private clinics?

In this regard, Ni Junfeng, a partner at Linjia Haoyi, believes that the core competitiveness of private clinics lies in their medical value, specifically in diagnosis, treatment, and therapeutic outcomes. Standardization is a cornerstone for the long-term development of private clinics as an emerging healthcare business model.

First, it is essential to establish the foundation that distinguishes private clinics from traditional individual practices, and to determine how to realize their core value, particularly the core value of chain clinics. Standardization and normalization represent the critical turning point for the future development of clinics. In the past, private clinics suffered from irregular operations and inconsistent diagnostic and treatment processes. In contrast, new-type private clinics aim to provide patients with standardized and normalized medical services.

Standardization in modern clinics extends beyond clinical practice guidelines to encompass comprehensive protocols covering random inspections, financial management, and supply chain management. In its efforts to standardize clinic operations, Linjia Haoyi equips facilities with essential medical devices to enhance the efficiency and precision of diagnosis and treatment. Furthermore, it establishes standardized, process-driven clinical protocols aligned with existing guidelines and regulations.

Secondly, it is necessary to address the talent bottleneck encountered during the clinic’s development. Linjia Haoyi enables medical staff to implement standardized, documented protocols. It conducts standardized training tailored to the clinic’s specific characteristics, with a focus on clinical and treatment standardization.

Establish a Long-Term Learning and Training System for PhysiciansAt Linjia Haoyi, all physicians are required to log in to DXY.cn on a weekly basis to update their medical knowledge and engage in professional discussions. They must strictly adhere to standardized protocols for documenting medical histories and physical signs. On the physician side, we have established comprehensive training and learning systems to facilitate the replication of these standards, thereby fostering a positive internal learning environment and organization characterized by regular discussions and knowledge sharing. To address the talent bottlenecks encountered during clinic expansion and the broader issue of talent shortages faced by private clinics, Linjia Haoyi has developed Standard Operating Procedures (SOPs) for talent replication and cultivation based on clinical standards. These SOPs ensure that physicians are thoroughly trained before assuming their roles, followed by the provision of robust internal promotion pathways.

Finally, health education and popularization can also serve as a means of building reputation, that is, by driving online traffic to offline services, thereby improving patient satisfaction with medical services.

Linjia Haoyi believes that current health education content with a broad online audience has failed to translate into personalized health management. Users are overwhelmed by a deluge of medical information, which actually deviates from fundamental medical values and ethics. Linjia Haoyi’s approach uses common pediatric conditions as an entry point to drive outpatient visits. By effectively managing and conducting in-depth analysis of the existing patient base, the company provides meticulous management and follow-up for each pediatric patient. This enables the identification and management of health issues that parents have overlooked or not yet prioritized, along with targeted health education. Following internal standard operating procedures and leveraging prior medical training, clinicians order reasonable and necessary tests after making a preliminary diagnosis.

For instance, when a physician predicts potential issues with a child’s dental development, they will recommend referring the patient to a dentist for treatment. Once pediatrics establishes effective operations and builds a strong reputation among parents—thereby fostering trust among users—Linjia Haoyi can leverage pediatrics as an entry point to incorporate other parents into the clinic’s health management system, using pediatric services as the foundational channel for patient acquisition.

Regularizing health education within standardized care can also improve diagnostic and treatment efficiency, as disease management requires cooperation with home care. Parents who lack health knowledge or are anxious often inadvertently hinder care. Linjia Haoyi leverages a SaaS-based platform to deliver scientific health education, addressing parents’ irrational demands.

Since leaving Amcare General Outpatient Clinic, internet celebrity Yu Ying has aimed to establish a clinic that is affordable for the general public. Over the past year or more, she has found that running a clinic is no easy feat, requiring intensive operational management.

To date, she believes the ideal clinic startup team should resemble that of Cui Yutao: a physician-led brand with a high-traffic intellectual property (IP) presence, backed by an IT-enabled management team and a product development team, forming a highly effective marketing mix. However, such a team is not replicable, as the personal branding is too pronounced.

Therefore, when Yu Ying planned to establish a clinic, she deliberated whether to operate a single-site practice or build a chain. She carefully assessed her available resources and determined how to deploy them effectively, while also considering whether to introduce external capital. If leveraged wisely, capital can serve as a powerful catalyst, propelling your career forward and supporting you through every challenge and hardship. However, if investors exert excessive pressure, driving you relentlessly from behind, the experience may ultimately become unbearable.

With such a modular approach, opening a clinic becomes relatively easier. For instance, in the early stages, dental clinics standardized their treatment processes and enjoyed high profit margins, leading to the proliferation of dental chain clinics across China, where many doctors also serve as partners.

In fact, when clinics face a shortage of talent, adopting a partnership model can be an effective strategy to attract physicians. However, careful consideration must be given to retaining these professionals. This requires fostering emotional connections, providing incentives, offering competitive compensation, inspiring with a shared vision, and promoting a sense of solidarity. Physicians embarking on entrepreneurial ventures must avoid monopolizing all benefits; instead, they must embrace the principle of sharing. Jack Ma holds only a small percentage of Alibaba’s shares, yet his team represents the most powerful productive force. The essential prerequisites for building a successful chain include core values, sufficient capital, precise market positioning, standardized management teams, and product standardization.

Next, the issue of site selection must be considered. In Yu Ying’s view, it is essential first to identify the clinic’s target customers and then conduct market research. This involves observing the area at different times—weekends, evenings, and mornings—to see if there are parents bringing their children out for leisure. What do these caregivers look like? How many lights are on in the residential complex at night? What types of vehicles are parked in the lot? Regarding nearby dining options, if the area is dominated by budget-friendly eateries such as Laojia Meat Pies or Chongqing Small Noodles, one must carefully assess the local spending power. Conversely, if the neighborhood appears relatively upscale, it likely indicates a certain level of consumer affordability.

Where are the patients? How do you make your presence known to them? This is critical. Ground-level marketing efforts, such as collaborating with nearby kindergartens and engaging with neighborhood committees, may yield better results. Is there coverage under the national health insurance scheme? In many cities, inclusion in the national health insurance network is a prerequisite for clinics to grow from zero to one. However, this does not apply to Beijing and Shanghai, where obtaining health insurance accreditation is extremely difficult, meaning most clinics operate without it. Moreover, due to the vast geographical areas of these two cities and the inconvenience residents face in accessing medical care, a significant self-pay patient population has emerged.

Finally, regarding the selection of clinic services, in addition to traditional diagnosis and treatment, it is necessary to break through certain bottlenecks and achieve profitability as soon as possible, such as by offering online or home-visit medical services.

According to Yu Ying, Youlin Clinic operates from 8:00 AM to 8:00 PM. She raises the question of whether the space could be repurposed after 8:00 PM to attract more patients to the clinic.

To put it more simply and directly: if you wouldn’t let your own children or parents seek care at your clinic after it opens, how can you possibly expect your neighbors to do so?

How Clinics Can Attract Renowned Physicians and Promote the Mobility of Medical TalentZhou Lujing from Rici Healthcare Group brings extensive experience to this topic. He emphasized that, regardless of new models or methods for physician mobility, the core issue in China’s healthcare system remains a severe shortage of doctors. The pool of professionals capable of delivering high-quality medical services in the short term cannot be rapidly expanded or replicated on a large scale.

Meanwhile, internet-based shared healthcare also faces barriers such as the uneven distribution of medical resources and competition from public hospitals. Against the backdrop of scarce high-quality medical resources, the vast majority remain concentrated in Beijing, Shanghai, and Guangzhou. Furthermore, due to its inherent characteristics, medical service delivery is constrained by service radius. How has Ruici Medical addressed these challenges?

First, regarding customer acquisition, since Rici Healthcare’s four business segments—health checkups, hospitals, clinics, and elderly care—are already listed in Hong Kong, the company is transitioning its light-medical platform into private clinics. Rici Healthcare has recognized that directing traffic from the light-medical platform to its clinics is not straightforward, resulting in low conversion rates. The clinics still need time to build brand awareness among customers, necessitating strategic considerations on how the traffic platform can convert online visitors into new business leads.

At the heart of clinics built on the renowned physician platform are the renowned physicians themselves. Rich Healthcare’s process for cultivating specialists is divided into four stages. The first stage ensures that specialists possess solid clinical expertise, while also leveraging internet-based tools in collaboration with third-party platforms to help them engage and retain their existing base of patients with established reputations.

The second phase involves the platform jointly directing patients to him, referred to as channel-sourced patients. Meanwhile, the physician must collaborate with us on personal brand building.

The third phase involves peer referrals, with experts advised to promptly integrate into private medical institutions and major forums. Rich Healthcare will provide them with such opportunities to build peer reputation.

The fourth stage involves cultivating high-end clients and a loyal fan base, then leveraging this to generate word-of-mouth effects that help the clinic acquire new patients. From an expert’s perspective, this means effectively transforming patients who previously visited tertiary Grade A hospitals into the doctor’s own patients.

Taking Narui Medical as an example, in its first phase, it exclusively recruited renowned senior specialists from Grade A tertiary hospitals. In the second year, it established five specialized centers focusing on health issues frequently identified during medical examinations: lung cancer, fatty liver disease, neurosurgery, infectious diseases and hepatology, and sports rehabilitation. The establishment of these centers served a dual purpose: to collect scientific research data and to attract specialists for clinical consultations, thereby enhancing their professional engagement. For specialists whose engagement levels remained low, the company collaborated with enterprises to organize free health clinics. This approach ensured that these specialists felt valued and had meaningful roles within the platform, which was essential for retaining their talent.

To further address treatment needs following specialist consultations, Rich Healthcare has fully leveraged high-quality medical resources through clinics established in conjunction with its health examination centers, exploring the implementation of video consultations. This approach emphasizes greater patient engagement to maximize the efficiency of specialists' time. It also enables multidisciplinary joint consultations via video for patients across China, particularly those requiring follow-up visits, thereby ensuring that patients who cannot travel to Shanghai for every follow-up appointment can still access professional medical services.

Adhering to the philosophy of continuous innovation, serving physicians, and prioritizing patients, Ruici aims to build one of China’s largest private outpatient platforms through a platform-based strategy, while maintaining an open, cooperative, and win-win approach to serve healthcare professionals.

In terms of clinic management, Pan Jing, a partner at Leo Clinic and founder of Baohua Medical, is perhaps better positioned to offer insights. With over 28 years of experience in clinical practice and the operational management of international healthcare institutions, she has fully invested in Leo Clinic, effectively integrating clinic management theory with practice. Her approach has established numerous standards for clinic operations, offering valuable lessons for other clinic directors.

In Pan Jing’s view, clinics need not be positioned strictly as high-end or low-end. Instead, they should focus on upholding individuals’ right to health by creating a friendly and safe healthcare environment. Currently, in the Chinese market, there are no clear criteria for distinguishing between high-end and low-end medical services.

“Does providing care in an English-speaking environment or serving a large number of foreign patients equate to high-end medical care? I don’t think so,” Pan Jing stated bluntly. She believes that internationalization should focus on refining service processes, adopting globally standardized service attitudes, and ensuring privacy standards in diagnosis and treatment that align with international best practices. It should not involve leveraging the concept of internationalization to create barriers to access at private clinics; rather, the goal remains to enable more people to benefit from healthcare services.

As consumption upgrades, more people will purchase services rather than goods, and consumers’ willingness to pay will strengthen. An increasing number of individuals will also be willing to pay for high-quality medical services. According to Pan Jing, the target consumer group envisioned by private clinics such as Baohua Medical primarily consists of the “post-80s” and “post-90s” new middle class, with annual incomes ranging from RMB 60,000 to RMB 600,000 considered within the new middle-class bracket.

Pan Jing also emphasized that private medical institutions must prioritize sales. Unlike public hospitals, which enjoy inherent patient demand akin to “an emperor’s daughter having no worries about marriage,” the primary resources and products in private clinics are the time of medical personnel. The key challenge lies in rationally allocating this time to ensure appropriate consultation durations. Sales strategies, therefore, aim to optimize both the utilization rate of physicians’ effective working hours and the occupancy rate of examination rooms.

Regarding hospital operational models, Pan Jing believes that the relationship between medical personnel and patients constitutes the core of the business model. A key aspect of the value private clinics provide to patients lies in respect for and safety of the patient.

No single clinic’s operational metrics can serve as a benchmark for others. Each clinic must formulate appropriate development strategies based on its actual circumstances. Clinic operations must be implemented down to every detailed item, ranging from air conditioning systems to the calculation of labor costs. Meanwhile, Pan Jing noted that in the early stages, due to slow revenue generation, operators must guard against cash flow disruptions. Running a clinic requires patience with upfront investments.

Regarding the long-term operation of clinics, Pan Jing does not believe that private clinics charge higher prices than public hospitals; on the contrary, as patient volume increases, the average revenue per user (ARPU) can rise. Instead, clinic operators need to carefully calculate labor costs. Taking her own clinic as an example, Ms. Pan Jing noted that after accounting for base salaries and additional benefits, it is normal for human resource costs to account for 60% to 80% in the first year. However, these costs should be controlled within 45% in later stages, eventually declining to 30%–35%.

In terms of physician performance and the allocation ratio of direct compensation, Leo Medical provides a platform for physicians rather than imposing restrictions. However, physicians are not salespeople; although they work alongside clinic managers and their roles carry certain sales-related functions, they should not be evaluated using quantified sales metrics. Pan Jing stated, “We adopt achievable performance targets. The total business volume is assessed in conjunction with structural quality indicators, rather than relying solely on aggregate business figures or numerical targets. Furthermore, professional development serves as a key objective of our performance evaluation.”

Yang Zefang, head of DXY, once stated: “In my view, the development of clinics should involve learning healthcare service models from Taiwan and medical technologies from the United States.” So, what innovations have emerged in Taiwanese clinics? The development trajectory of You Nengjun Clinic in Taiwan, which specializes in diabetes management, may offer valuable lessons. Dr. You serves as Chairman of the Yilan Pancreas Care Association and as a member of the Yilan Diabetes and Chronic Disease Care Committee. He provides care to 1,800 patients per month and brings extensive professional experience to the field of chronic disease management for diabetes.

He believes that opening a clinic in Taiwan is not as difficult as one might think. Healthcare is a process of transformation; if you follow the latest medical advancements, you will find that knowledge is updated daily. Meanwhile, the overall progress in healthcare is relatively slow. For instance, regarding treatment methods, the focus has shifted from merely providing treatments to emphasizing value-based outcomes.

As information becomes increasingly transparent, physicians have shifted from working in isolation to operating as part of a team, particularly in the health management of diabetes. In clinics, a multidisciplinary team manages diabetes care, including nurse practitioners, dietitians, physicians, and pharmacists.

Currently, 37% of clinics in Taiwan are engaged in diabetes management, a trend partly driven by national health insurance incentives. The number of such clinics has grown from over 4,000 to more than 6,000, demonstrating significant acceleration. Among these, over 400 clinics provide comprehensive diabetes care with dedicated multidisciplinary teams.

He still remembers that when he first started his business, a senior mentor once advised him: “How can you survive running a clinic without administering IV drips?”

“In the future, there will be a growing elderly population and an increasing prevalence of chronic diseases; therefore, I intend to pursue a different path.” Later, this elder would express great relief each time they met him, remarking, “My concerns back then were unfounded. You have chosen the right path.”

Over the years since our startup, only two team members have left the clinic. One departed during the arduous early stages of the venture, when work often extended past midnight; the other left due to an inability to adapt to the clinic’s work environment. The team has grown from its initial 14 members to 34. So, how should personnel allocation be managed?

It is reported that for every three diabetic patients, You Nengjun hires one dedicated nurse and one nutritionist. Since nutritionists and nurses have different areas of expertise, they provide dietary guidance to users.

For example, when a patient with diabetes visits a clinic, it is ineffective for the physician to remain silent if they aim to engage the patient in educational interventions. Merely monitoring blood glucose levels without inquiring about dietary habits or exercise routines is also insufficient. Furthermore, communication is lacking if the patient fails to mention which types of exercise might benefit their foot health. Typically, patients expect physicians to take the lead; if doctors do not initiate such discussions and instead defer entirely to nurses or dietitians, the outcomes are often suboptimal. Therefore, it is essential to continuously expand physicians’ professional competencies in patient education and lifestyle management.

Furthermore, it is essential to guide patients through role modeling, encouraging them to actively participate in physician-led health management. For instance, we take photos of our daily meals and exercise sessions, followed by blood glucose monitoring afterward. This approach helps patients cultivate similar habits. Such practice not only fosters a culture of chronic disease management through personal embodied experience but also enables healthcare providers to gain deep insight into the patient’s perspective, thereby achieving dual benefits.

How can healthcare efficiency be improved? This is a cumulative process that requires precise decision-making and comprehensive data. Additionally, physicians must possess extensive experience, and the team must demonstrate strong collaborative capabilities. Since patients may not always accept a physician’s decisions outright, patient education through teamwork and the influence of organizational culture are essential.

Therefore, at Dr. You Nengjun’s clinic, all patient data are collected and presented to the physician before the consultation. HbA1c test results are available in approximately 40 minutes. Taiwan’s National Health Insurance system features a cloud-based platform that provides access to patients’ historical medication records, enabling highly efficient clinical workflows. Upon seeing a patient, the physician can directly state, “I know what medications you have been taking, how effective they have been, and whether we should consider adding insulin.”

Medical care does not end after the consultation. Patients proceed to the pharmacy to collect their medications. For patients on insulin therapy, they typically receive complimentary case management follow-up. The clinic also offers referral services to various specialties, such as ophthalmology, cardiology, and nephrology.

Although the clinic was founded in Taiwan 13 years ago, You Nengjun believes that starting a business is not easy at the beginning, and sticking to the original intention will lead you all the way. If you are just calculating in business, your strength will eventually be insufficient.