WebMD's First Chapter Ends: What's Next for Online Consultation?

Although 2017 is only halfway through, if we were to predict the top ten global events in the digital health sector for the full year, WebMD’s $2.8 billion “wedding of the century” would certainly not be overlooked.

WebMD once stood head and shoulders above its competitors with its business model of “producing premium content, attracting both patients and healthcare providers, securing business from pharmaceutical and medical device companies, and seizing opportunities to expand into the consumer market.” Regarded as the most intrepid pioneer in the digital health sector, it has also drawn significant attention from numerous entrepreneurs in China’s digital health industry.

Now that WebMD has changed hands to KKR at a lofty valuation of $2.8 billion, it seems to signal to China’s digital health pioneers that the “first half” of their journey—fixated on benchmarking against U.S. counterparts—is over. To embark successfully on the “second half,” the key lies in self-reflection and observing the innovative approaches of peers within the industry.

Following its inaugural industry report, “Market Overview of Companies in China’s Healthcare Informatics Industry,” VBInsight has recently released its second industry report, “Consumption Upgrade: The Dawn of the Era of Paid Online Consultations.” Research conducted by VBInsight reveals that internet healthcare companies are comprehensively transitioning their online consultation services from free models to paid models driven by consumption upgrades.

Over a two-month period, VBInsight conducted a survey of 720 mobile health users, framed against the policy backdrop of “consumption upgrading.” In-depth interviews were also held with senior executives from seven leading Chinese internet healthcare platforms—Chunyu Doctor, Haodf, DXY Doctor, Ping An Good Doctor, Xingren Doctor, Penguin Doctor, and Teng Ai Doctor—to gauge the current trends in paid online medical consultations in China.

The online medical consultation industry in the United States started significantly earlier than in China, with 350,000 American patients using telemedicine services as early as 2003. In China, online medical consultations first attracted attention from the capital market around 2007, but the key turning point for the industry’s growth came in August 2014, when Chunyu Doctor, a startup offering lightweight online medical consultations, secured $50 million in Series C funding from investors including China International Capital Corporation (CICC), Temasek, and BlueRun Ventures, sparking an investment boom.

Due to its early start, the U.S. online consultation industry has become relatively mature. To date, half of all health systems in the United States are utilizing telemedicine. From an overall market perspective, the U.S. mobile health industry has entered a stage of data-driven decision-making. There are detailed legal regulations governing online consultations, telemedicine, and online medical services, while payment mechanisms such as Medicare and commercial insurance have been deeply integrated into the ecosystem. The industry is expected to trend toward more in-depth and specialized development in the future.

Unlike the United States, a pioneer in mobile health development, China’s market has embarked on a distinctive trajectory shaped by its unique healthcare system and resource endowments.

Although China remains in the early stages of doctor-patient interaction and healthcare reform, particularly with payment mechanisms such as public medical insurance and commercial health insurance yet to be finalized, its key advantages lie in its enormous market size and rapid growth. According to publicly available data, the number of mobile healthcare users in China grew from nearly 100 million in 2015 to 294 million in 2016, and is projected to reach 360 million by the end of 2017. In terms of market scale, the sector reached RMB 10.35 billion in 2016 and is expected to increase to RMB 12 billion in 2017. Online service models in mobile healthcare have gradually gained widespread acceptance, and profound changes have also taken place in China’s online light-consultation segment, which represents the frontline of healthcare services.

The payment trends in online consultations are closely tied to the cost pressures faced by mobile health companies, with the largest cost stemming from the physician side; physicians are also a key source of core competitiveness for these companies.

VBInsight conducted a detailed analysis of the operational status of the physician-facing sides of seven major internet healthcare platforms, revealing intriguing differences and commonalities in the profiles of physicians across these platforms.

While the physician pools across various internet healthcare platforms differ, they share significant commonalities. For instance, in online consultation services, most platforms rely primarily on attending physicians and resident physicians as their core workforce. In terms of consultation outcomes, attending physicians play an irreplaceable role.

However, DXY and Haodifu differ in their strategic approach to this aspect. The Haodifu Online platform is primarily staffed by associate chief physicians and chief physicians, who account for 55% of its provider base. On DXY, attending physicians and associate chief physicians constitute the group delivering the highest-quality responses in online consultations. These physicians not only possess substantial clinical experience but also occupy a unique stage within the healthcare system: their workloads are typically not saturated, allowing them sufficient fragmented time to engage with patients, and they demonstrate strong service capabilities and awareness. Consequently, DXY has strategically focused on recruiting this cohort as the core providers for its paid online consultation services.

There is also a certain degree of consistency in the most popular departments for online consultations. Research by Health Point has found that the departments with the highest consultation volumes across various platforms are mostly concentrated in gynecology, pediatrics, dermatology, and internal medicine. Haodf Online stated that, compared to other platforms, its user base primarily consists of patients with relatively complex conditions.

From the perspective of physicians’ institutional affiliations, mobile health companies have consistently prioritized physicians from tertiary Grade A hospitals. For instance, early entrants such as Chunyu Yisheng (Spring Rain Doctor), Haodafu, DXY Doctor, and Xingren Yisheng have each accumulated between 420,000 and 2 million real-name verified physicians. Among them, DXY, the parent company of DXY Doctor, boasts the largest online physician base, with 2 million real-name verified registered physicians.

What is most intriguing lies in the similarities and differences in patient acquisition strategies among various platforms. Platforms such as Ping An Good Doctor and Chunyu Doctor primarily facilitate initial consultations between doctors and patients who have no prior relationship. In contrast, Almond Doctor takes a different approach by positioning itself as a tool-based platform for physicians. It provides specialized tools designed to improve doctors’ work efficiency and facilitate post-consultation doctor-patient communication. Consequently, its core focus is on cultivating established doctor-patient relationships.

Merely attracting high-quality physicians to join the platform is insufficient to sustain long-term ecosystem health. Ensuring sustained engagement between physicians and users on the platform is key to maintaining its vitality and dynamism. This requires platforms to invest greater effort in designing revenue and incentive models. Research by VCBeat Insight reveals that, although each platform has its unique strengths, two distinct pathways determine their differing approaches to paid online consultations.

Chunyu Yisheng, Haodafu, Xingren Yisheng, Ping An Good Doctor, Penguin Doctor, and Teng Ai Doctor all follow the first approach—opening their platforms to a large number of physicians, who earn income based on the volume of consultations they handle. Each platform states that it is not feasible to simply calculate the average income of physicians on their platforms, as earnings vary significantly due to differences in professional titles, reputation, types of services offered, and frequency of service provision.

Dingxiang Doctor represents the second approach. Its consultation service was launched relatively late; planning for its precursor, a pilot product called “Ask a Doctor,” only began in April 2016. From the outset, it was decided to offer exclusively paid online medical consultation services.

Although DXY has accumulated 2 million real-name verified physicians, DXY Doctor, which originated from this platform, did not initially open its services to this entire group. Instead, it carefully selected 800 contracted physicians to join the platform, who became original content creators actively writing medical popularization articles for consumer-facing users on DXY. Following subsequent expansion, the total number of consulting physicians on the DXY Doctor platform currently stands at approximately 20,000.

Not coincidentally, Tencent’s internal physician tool platform, Tengai Doctor, has also adopted this model, which starts with physician-generated content and expands into consultation services. The key difference between Tengai Doctor and DXY Doctor is that Tengai Doctor, backed by Tencent’s WeChat, is an open platform where individual physicians as well as medical institutions such as clinics and hospitals can register.

It is worth noting that, unlike the evaluation system for offline physicians, the popularity of doctors in online paid consultation services is closely tied to their personal brand management. Therefore, the content-driven online paid consultation models exemplified by Dingxiang Doctor and Teng Ai Doctor are particularly worthy of reference.

It is evident that online consultation platforms have a strong desire to transition to a paid model. Has the market trend among patients for paid online consultations already taken shape?

In response, VBInsight conducted an online user survey between May and June 2017, collecting a total of 720 valid reader responses from three platforms: Chunyu Doctor, DXY Doctor, and Xingren Doctor. Meanwhile, VBInsight also investigated the paid consultation services of seven major internet healthcare platforms.

The internet principle that “traffic is king” also applies to light consultation platforms. However, compared with the traditional approach of solely pursuing online traffic, current internet healthcare platforms clearly place greater emphasis on integration with offline services. As Zhang Kun, the new CEO of Chunyu Doctor, stated, after nearly three years of refinement, internet healthcare has shifted from a mindset of “disrupting medicine” to one of “embracing medicine.”

From the perspective of online channel collaborations, among the seven internet healthcare platforms surveyed, Haodafu, which was established earlier, stated that although it collaborates with major internet platforms, its primary focus remains on operating its own platform.

DXY aims to integrate its platform service capabilities into other community-based or utility-oriented products, seeking to share its online consultation services. With a strength in medical content production, DXY’s approach to content delivery has also provided it with diverse distribution channels.

Almond Doctor currently has no plans to integrate with the medical service modules of major platforms such as Alipay and WeChat. However, its patient-facing services are built directly within the WeChat Service Account scenario, leveraging existing physician-patient relationships based on personal acquaintances, with patient payments processed via WeChat Pay.

Ping An Good Doctor has chosen to operate exclusively on its own platform, with many of its business modules already embedded into the products of other subsidiaries within the Ping An Group.

Currently, QQ Browser, Mobile QQ, and WeChat are the B-side partners that drive significant user traffic to Penguin Doctor.

The seven internet healthcare platforms surveyed adopted varying strategies for online channel partnerships, yet all demonstrated considerable emphasis on either collaborating with or independently establishing online and offline medical institutions.

After joining Chunyu Yisheng in 2017, Zhang Kun clarified the company’s new development strategy: on one hand, to consolidate its consumer-facing (C-end) online consultation services; on the other hand, to help hospitals build internet-based medical service capabilities by connecting partners such as hospitals, pharmaceutical companies, and insurance providers. This approach represents an expansion into incremental markets beyond traditional Hospital Information System (HIS) vendors, emphasizing operations over product development, delivering strong services, and fostering better connectivity with end-users.

Haodf, a fellow pioneer alongside Chunyu Doctor, explicitly stated to Jiankangdian that the integration of online and offline services is essential. It emphasized that the definition of internet healthcare does not lie in moving treatment onto the internet, but rather in leveraging the internet to span the entire spectrum of patients’ medical needs, thereby optimizing the allocation of medical resources and care processes.

In contrast to Haodf’s model, which emphasizes the online integration of resources, Dingxiang Doctor, Xingren Doctor, and Penguin Doctor have all opted for a “heavier” offline approach. Dingxiang Yuan has established two physical clinics in Hangzhou and obtained qualifications for basic medical insurance reimbursement. Adhering to its online-offline integration strategy based on an “acquaintance-based doctor-patient model,” Xingren Doctor launched its first multi-site practice clinic in Shenyang and planned to complete the rollout of its offline WeWork-style clinics in four Chinese cities by 2017. Penguin Doctor has also joined the ranks of companies building self-owned clinics, with facilities currently operating in Beijing, Chengdu, and Shenzhen.

Source: Caixin Health Point