Qingsong Health Care Group Files for IPO: Pioneering China's Light-Asset Elderly Care Model

As the elderly population continues to rise, the quality of life for this demographic has inevitably drawn societal attention, with the “silver economy” poised to drive a new wave of industrial development. In this context, innovating elderly care models has become imperative.

Qingsong Kanghu Nursing Group was established in 2004, pioneering home-based functional rehabilitation nursing in China. Over the past decade, it has grown into a leader in the elderly health industry, integrating Qingsong Internet, Qingsong Health+, Qingsong Academy, and Qingsong Select.

On the evening of July 20,VCBeat (WeChat ID: vcbeat)Inviting Wang Yanni, CEO of Qingsong Kanghu, to Join the VB Group Interview to Discuss: Asset-Light Elderly Care Models. Below is a Summary of Wang Yanni’s Views.

After studying advanced models in many developed countries and regions, Qingsong has adopted a comprehensive approach tailored to local needs in China through iterative trial and error: providing professional rehabilitation nursing via home visits, complemented by remote medical consultations, multidisciplinary case discussions, and rehabilitation care guidance from its team.

Since the services are delivered either in the homes of elderly individuals or remotely through various technological platforms—including hardware such as Xiaoyu Zaijia—only a computer, an iPad, or even a cable TV system is required to connect service providers with service recipients.

Wang Yanni believes that this model does not impose specific requirements on land or service venues, allowing for flexible service delivery to users and seamless integration into the facilities or projects of various partner institutions. This is why many consider Qingsong Care to be one of the earliest organizations to successfully implement an asset-light business model.

With the introduction of favorable national policies for elderly care, social capital has gradually become the main driver in developing the elderly care service industry. However, bottlenecks in the development process have become increasingly apparent. In just two years, factors such as high development costs and relatively limited financing channels have emerged as significant constraints in the senior living real estate sector.Developing elderly care services through an asset-light model is becoming a key focus for both the government and enterprises.

For many entrepreneurs, the conditions required to launch a capital-intensive business from the outset are often unattainable; the prohibitively high barriers to entry make it an unviable option. However, Wang Yanni believes that, as with entrepreneurship in any sector,Entrepreneurs should base their choice of business model on market demand, as startups need to “directly address market pain points.”

Wang Yanni stated that the decision to enter the elderly care industry was driven by the aspiration to assist as many seniors and families as possible in the future. This implies that elderly care models must not cater exclusively to a small segment of the population. “In other words, regardless of our intended initiatives, we must fundamentally consider the accessibility and affordability of these services—ensuring, as we put it, that they are within reach and financially viable for the greatest number of people.”

There are many successful models, whether asset-light or asset-heavy, that target relatively concentrated customer segments. In other words, during the early stages of a startup, to enhance accessibility and affordability, the focus is generally on a comparatively small population. Wang Yanni remarked, “At that time, we did not envision launching large-scale public welfare initiatives akin to today’s sharing economy. Through Qingsong Care’s explorations, we ultimately concluded that an asset-light model was essential.”

Qingsong is currently focused on delivering integrated health and functional services that combine medical care, rehabilitation, nursing, and elderly care throughout the entire life cycle, provided directly to patients’ homes. Wang Yanni is highly confident in the future growth prospects of this market, believing that there are substantial opportunities for innovation and cross-sector integration within this field.

Services falling under the scope of long-term care have a natural synergy with insurance. Driven by major global and domestic trends, the foundation for the development of such services lies in payment systems, where insurance plays a critically important role.At present, innovation in China’s long-term care insurance products particularly requires collaboration between insurance companies and the service industry.Turning to healthcare institutions and pharmaceutical companies, given the significant overlap in their target populations, the integration of products and services is a natural trend. Wang Yanni highlighted that a human-centric service model requires coordinated resources to help clients seamlessly transition between different settings and scenarios for health services.

Synergies exist among these diverse service providers.Since 2011, Qingsong has collaborated with colleagues from the Department of Geriatrics at Peking Union Medical College Hospital to explore continuous care models. Research data indicate that if diagnosis and treatment within medical institutions can be seamlessly integrated in a bidirectional manner with rehabilitation and nursing care in communities and homes via telehealth and information platforms, health intervention outcomes for patients can improve by at least threefold, and up to tenfold, while the rate of readmission after discharge can be reduced by 30% to 50%.

According to Wang Yanni, “Another area of our collaboration is with pharmaceutical companies. Long-term medication for many patients with chronic diseases faces a significant challenge: poor adherence after returning home, inadequate monitoring of drug efficacy, and a lack of awareness regarding the need for timely adjustments to medication regimens to maintain optimal therapeutic outcomes.”By integrating with in-home rehabilitation nursing services, the proactive and timely intervention of professional teams better ensures rational, safe, and effective medication use, serving as an extended service guarantee from pharmaceutical companies to their customers.

Institution-centric models make it difficult to ensure continuity of care. Many healthcare professionals have deeply experienced the challenges in implementing tiered diagnosis and treatment. In contrast, the needs of the elderly for services such as acute medical care, chronic disease diagnosis and treatment, rehabilitation, nursing, and daily life assistance do not follow a linear pattern; rather, they vary across different periods, requiring constant shifts in the settings and scenarios where services are delivered.

If care institutions are placed at the center, each institution has its own characteristics and systems for operational management. Older adults requiring different services must inevitably adapt to the varying requirements of these institutions. A simple example is that older adults with multiple comorbidities need to visit different departments in traditional hospitals for their various conditions. The examinations, diagnoses, medications, and treatments provided by different departments rarely take other conditions into account, making it relatively common for issues such as polypharmacy and conflicting treatment plans to arise.

If we shift our perspective to place individuals at the core, beginning with a comprehensive assessment of their needs that is dynamic and flexibly adapts to changing circumstances, then a service coordination entity is required. This entity would arrange for older adults to receive differentiated, targeted services according to their varying needs at different stages.

Wang Yanni stated, “At this juncture, akin to modern geriatric medicine, interdisciplinary and cross-sectoral teams must center their efforts on the individual needs of each older adult by conducting multidisciplinary consultations, integrating care, and providing continuous follow-up services. The beneficiaries are not only the recipients of care but also all service providers, as improved service efficiency, demonstrable outcomes, rational resource allocation, and streamlined workflows naturally reduce disputes, facilitate talent attraction and retention, and enhance overall operational performance.”

Elderly care services should adopt a people-centric model focused on human needs. Regardless of whether an asset-light or asset-heavy approach is employed, only by delivering high-quality services can sustainable competitive advantages be achieved through the alignment of timing, location, and human harmony.Wang Yanni believes that there is no direct relationship between asset-light and asset-heavy models and profitability.

Whether a business model is profitable broadly depends on the relationship between revenue and costs.Asset intensity is reflected on the balance sheet. The ultimate profitability is determined by the margin between revenue and costs. In an asset-heavy senior housing real estate model, if the advantages of real estate are effectively leveraged to provide living environments that meet target market demands, the development costs can be recouped and profits generated through mechanisms similar to those in conventional real estate. Moreover, this sector offers numerous opportunities for integration with financial innovations.

On top of this so-called “asset-heavy” model, if services are provided that precisely meet residents’ needs—offering continuous, integrated medical care, rehabilitation, nursing, and elderly care, while combining quality of life with health security—such services can also be fully profitable.

Addressing the profitability concerns shared by many entrepreneurs, Wang Yanni believes that as long as customer needs are accurately identified and flexible operations are properly designed, profitability is entirely achievable regardless of whether the business model is asset-light or asset-heavy.

From a profitability perspective, asset-light elderly care models generally cannot be expected to yield so-called “windfall profits,” and their growth tends to be gradual. Wang Yanni remarked, “While certain industries or business lines may achieve rapid, high short-term profits, such margins are often unsustainable and tend to attract a rush of competitors, intensifying competition and driving down overall pricing and profit levels.”

The elderly care industry, which serves the long-term megatrend of population aging, boasts significant future potential, sustainable growth, and strong momentum. In particular, international experience suggests that the elderly care sector is relatively resilient to some of the potential negative impacts of economic cycles. However, the trade-off for this resilience is lower profitability; consequently, rapid, overnight growth in the elderly care industry is unlikely.

Qingsong’s home-based rehabilitation and nursing care model achieved operational break-even in 2010, just one year after its market launch. Over the years, it has overall reached a level of modest profitability. To achieve better profitability, I believe it is necessary to intensify innovation efforts. Innovations in technology, products, and business models all present fundamental opportunities to enhance value and reduce costs.

There are even many opportunities to integrate with innovations in elderly finance. On top of the so-called asset-heavy model, if services that precisely meet residents’ needs by providing seamless, integrated medical care, rehabilitation, nursing, and eldercare can enhance quality of life and deliver health security, such services can certainly be profitable. Wang Yanni stated, “Qingsong has opted for an asset-light model, focusing on a standardized and regulated service system. This represents our strategic positioning and choice.”

Furthermore, Qingsong Kanghu is also exploring collaborations with companies specializing in asset-heavy models, such as real estate developers and insurance institutions involved in elderly care, to jointly design new hybrid models that combine asset-light and asset-heavy approaches.

To this day, Wang Qingyan has personally witnessed the evolution of China’s elderly care service industry, from its nascent emergence to its current phase of accelerated growth. Wang Yanni candidly remarked, “I have observed several major shifts. Admittedly, there have been challenges, such as the volatility associated with emerging market trends, or rent-seeking behaviors spurred by increased government investment. Nevertheless, the industry as a whole remains sound, with its strengths far outweighing its flaws.”

Among the national standards currently issued for the elderly care service industry, most are primarily targeted at institutional elderly care, such as the Code for Architectural Design of Elderly Care Facilities, the National Occupational Standards for Elderly Caregivers, and the Standards for Medical Institutions Established within Elderly Care Facilities. These standards are all formulated from the perspective of institutional services. Wang Yanni believes that even in terms of personnel, the current standards for elderly caregivers fail to reflect the requirements of home-based care services.

“I once saw a draft of national standards prepared by some experts in 2015, based on local standards such as the Basic Specifications for Community-Based Home Elderly Care Services in Shandong Province and Shanghai Municipality; it has still not been released.” The lack of standardization in elderly care facilities and the failure to implement standards have led to an industry that is “working behind closed doors.”

For example, the draft at that time surprisingly failed to include needs assessments for community-based home care services for the elderly. Registration of elderly individuals relied solely on basic medical diagnostic records, with criteria limited to whether they had dementia, mental disorders, or chronic diseases.

The Activities of Daily Living (ADL) scale for the elderly, their psychological and mental status as assessed by the internationally recognized Mini-Mental State Examination (MMSE), as well as evaluations of home-based community living environments, caregiving arrangements, and service risks, have not yet been incorporated into the assessment scope.

If a comprehensive assessment of the needs of older adults is an essential first step for institutional care, then in community and home-based settings, without a scientific and systematic assessment to underpin service plans, standardization efforts cannot be effectively implemented.

For the elderly care service industry, industry standards should take the lead, and these industry standards require the practical foundation of enterprise standards. Qingsong has pioneered a personalized service system based on standardization within the industry.

Wang Yanni stated, “Qingsong is the first home care service provider to obtain ISO 9001, 14001, and 18001 quality management system certifications. We are striving to collaborate with all stakeholders to advance the development of industry standards. The institution-centric service model is difficult to sustain, and we sincerely hope that our practical experience will offer valuable insights and inspiration to all participants.”

For detailed information, please refer to the July 20 VB Group interview: “Exploring Asset-Light Profit Models for Elderly Care”

Replay Address:https://m.qlchat.com/topic/details?topicId=290000396177288&from=singlemessage&isappinstalled=0

The large-scale, asset-heavy construction in the elderly care sector over the past few years is laying a solid infrastructure foundation for asset-light entrepreneurship in this field. Although there remain many skeptical voices regarding the asset-light elderly care sector, we observe that the development of the commercial elderly care market in recent years, continued government support, and the emergence of numerous public welfare and non-public welfare organizations are reintegrating older adults into social structures. Offline institutions, elderly households, relatives/children, and care providers are collectively establishing entry points for seniors to access technology-driven lifestyles. We firmly believe that a wave of asset-light venture capital and innovation targeted at the elderly population is inevitable.

Scan the QR code now to join VCBeat Membership and stay abreast of global asset-light elderly care trends. For further insights into the development of the elderly care industry, please refer to our Elderly Care Report:“Report on the Senior Tourism Industry: Four Major Breakthroughs in a Trillion-Yuan Market”、“Report on Innovative Models of Intergenerational Learning Centers”Scan the QR code below to become a member and access the full report.

Scan the QR code to become a VCBeat member,

Beta Version Trial Price: 365 Yuan/Year.