Core Medical Insurance System Providers Forge Widespread Partnerships with Alipay, Ushering in the Era of 'Cashless Hospitals'
On June 20, the Hangzhou Municipal Human Resources and Social Security Bureau and the Health and Family Planning Commission, in collaboration with Alipay and Hangzhou Citizen Card Co., Ltd., jointly announced the launch of mobile medical insurance payment services in Hangzhou.
According to industry sources, Alipay has partnered with all major national medical insurance system providers and is accelerating the rollout of mobile payment for medical insurance, thereby promoting the transition toward a “cashless” healthcare sector.
Under the newly launched mobile payment scheme for Hangzhou’s medical insurance, residents insured under the municipal medical insurance program can claim their electronic social security cards on Alipay by completing facial recognition.
(The photo shows Hangzhou residents collecting their social security cards via facial recognition.)
During medical visits, residents no longer need to go specifically to payment windows. At doctors' offices, self-service kiosks, registration counters, and other locations, they can simultaneously pay both the insurance-covered and out-of-pocket portions via the electronic social security card in Alipay, reducing consultation time by 60%. This service covers over 9 million insured users in Hangzhou.
At the end of February this year, Alipay announced its ambition to propel China into becoming the world’s first cashless society within five years. This trend has also swept through the healthcare sector. In hospital settings, more than 70% of medical expenses are covered by medical insurance. Therefore, a critical step toward achieving a truly cashless system is enabling citizens to use their medical insurance benefits simultaneously when making payments via mobile phones.
From late May last year to March 2017, Alipay only enabled mobile medical insurance payments in two cities: Shenzhen and Zhenjiang. Going it alone was clearly too slow. According to reporters, Alipay is now seeking ecosystem partners within the industry through a more open approach to jointly promote mobile medical insurance payments. Currently, Alipay has reached cooperation agreements with all core medical insurance system providers across China.
In fact, in addition to payment services, the Ant Financial Open Platform offers a range of proprietary capabilities, such as security and risk control, real-name and real-person verification, credit assessment, and financial services. The openness of these capabilities provides significant advantages for mobile payment solutions in medical insurance.
Against the backdrop of Ant Group’s open platform, the division of labor between the parties is clearly defined in advancing the “Cashless Hospital” initiative.
“Alipay holds advantages in the internet sector, while partners possess deeper industry expertise,” said an industry insider involved in the collaboration. Ant Group has conveyed the philosophy that it will focus on excelling in internet technology, leveraging the industry understanding and capabilities of core medical insurance system providers to jointly and continuously refine medical insurance solutions, achieving mutual benefit and win-win outcomes.
With the joint efforts of the entire ecosystem, Alipay’s pilot program for mobile medical insurance payments is accelerating.
It is reported that, in addition to Shenzhen and Zhenjiang, hospitals in Jiaxing, Hangzhou, and Chengdu have already begun piloting Alipay’s mobile payment service for medical insurance. In the pharmacy setting, over 300 Nepstar pharmacies in Shenzhen are about to roll out the service comprehensively, while pilot programs are gradually being expanded in select pharmacies in Chengdu, Zhenjiang (Jiangsu Province), Zhejiang Province, and Tongchuan (Shaanxi Province).
Previously, Alipay publicly announced that it had reached cooperation intentions for mobile medical insurance payments with more than 100 cities across China. It was revealed that this year, mobile medical insurance payment services will soon be launched in multiple cities, including Xiamen, Zhengzhou, Shenyang, Harbin, Xi’an, Wuhan, and Tianjin.
It is anticipated that, with the integration of mobile payment systems into medical insurance and the expansion of their application scenarios, an increasing number of hospitals will become true “cashless hospitals.”
Appendix: Overview of Alipay’s Mobile Payment Process for Medical Insurance:
In late May 2016, the collaboration between Alipay and the Shenzhen Human Resources and Social Security Bureau pioneered mobile payment for medical insurance in Shenzhen.
In March 2017, Zhenjiang, a national pilot city for healthcare reform, became the second city in China to support Alipay for medical insurance payments.
In April 2017, Tongchuan, a pilot city for mobile medical insurance payments in Shaanxi Province, launched its service.
In April 2017, Jiaxing also became the first city in Zhejiang Province to support Alipay for medical insurance payments.
On June 20, 2017, Hangzhou implemented Alipay’s mobile payment service for medical insurance and became the first city to deploy “facial recognition” technology, allowing users to link their social security cards simply by scanning their faces.
In addition to hospitals, pharmacies across China are also advancing the implementation of mobile payments for medical insurance. To date, over 300 Nepstar pharmacies in Shenzhen are poised for full-scale rollout following pilot programs at select stores; chain pharmacies such as Tongshentang and Derentang in Chengdu are on the verge of fully enabling mobile medical insurance payments, while pilot programs are already underway at certain pharmacies in Zhenjiang (Jiangsu Province), Zhejiang Province, and Tongchuan (Shaanxi Province).