Alibaba Health Reports 739% Revenue Surge, Focuses on Medical Big Data and Smart Healthcare

VCBeat (WeChat: vcbeat), May 17 – In the early hours of today, Alibaba Health announced its annual report for fiscal year 2017 (from March 31, 2016 to March 31, 2017). During the reporting period, the company’s revenue reached RMB 475 million, representing a year-on-year increase of 739.4%. It achieved a gross profit of RMB 187 million, up 392% year on year.

Alibaba Health stated that the strong growth in revenue and gross profit was primarily driven by the rapid expansion of its pharmaceutical e-commerce business during the year. The annual report also revealed that medical big data and smart healthcare are key strategic focus areas for the company in the near future. Drawing on the annual report and Alibaba Health’s ongoing explorations, VCBeat has provided a brief analysis of the company’s key business highlights.

The Pharmaceutical O2O Pioneer Alliance, spearheaded by Alibaba Health, has partnered with more than 200 chain pharmacy operators, covering over 20,000 retail pharmacies in more than 100 cities across China.

Doctors on the Ali Health platform, based on Mobile Taobao and the Ali Health app, have cumulatively provided over 6 million online medical and health consultations.

More than 5,000 enterprises have signed onboarding agreements with the “Ma Shang Fang Xin” traceability platform, among which the number of onboarded pharmaceutical manufacturers exceeds half of the total number of pharmaceutical manufacturers in China.

Alibaba Health collaborates with government agencies, hospitals, and academic research institutions to develop and explore applications in the fields of medical big data and artificial intelligence. Its product portfolio includes a medical big data research platform, electronic medical records (EMR), a cloud-based remote imaging platform, and an intelligent engine for disease diagnosis.

Since being renamed AliHealth in early 2014 after receiving investment from Yunfeng Capital, CITIC 21st Century has embarked on the exploration of medical big data. In October of that year, AliHealth hosted a thematic forum titled “Transformation and Opportunities in the Pharmaceutical Industry in the Era of Big Data,” where it launched the “AliHealth Cloud Platform – Data Services” and unveiled its corresponding pharmaceutical big data strategy.

The plan at that time was,Alibaba Health will provide data resources and technical capabilities to help customers and partners with their operations., leveraging the storage, computing, and data capabilities of the Alibaba Health Cloud Platform to provide enterprises with products and services such as market assessment and decision-making, sales network optimization, channel governance and tracking, and streamlined supply chain management.

In 2015, Alibaba Health entered into a framework agreement with Baiyunshan. The two parties agreed to jointly explore and develop an “online-to-offline” (O2O) marketing model for pharmaceuticals in the e-commerce sector. Regarding general health products, they would integrate Baiyunshan Pharmaceutical’s existing health product portfolio with Alibaba Health’s platform and co-develop targeted products leveraging Alibaba Health’s big data on general wellness.

Looking back now,Big data business held special significance for Alibaba Health in 2015.The ongoing reevaluation of the “drug supervision code” system has also prompted Alibaba Health to identify more valuable service models for the pharmaceutical industry and commerce, with big data and artificial intelligence serving as an ideal entry point.

At this stage, Alibaba Health has shifted its focus from serving only the pharmaceutical manufacturing and commercial sectors to addressing the entire healthcare and pharmaceutical system. Alibaba Health’s vision is to integrate collaborations among pharmaceutical manufacturers and distributors, mobile health providers, and hospitals. By leveraging its algorithm engine development capabilities and providing data analytics and processing services, it aims to help participants reduce costs and improve efficiency, thereby “empowering healthcare with big data.”

Under these guidelines,Alibaba Health Initiates Broader, Cross-Industry Collaborations, such as collaborations with medical device manufacturers, healthcare institutions, smart wearable device manufacturers, and mobile health providers.

During this period, the most commendable initiative was Alibaba Health’s exploration of the “Online Hospital” model. By partnering with physical hospitals to establish online hospitals, users can access tiered diagnosis and treatment, remote consultations, appointment registration and add-on slots, and offline medication pickup through the mobile app.Alibaba Health’s initiatives also swiftly sparked a trend in the development of online hospitals.

In its efforts to leverage technology to enhance medical efficiency and service capacity, Alibaba Health aims to delve far deeper than just the two domains of online health consultations and tiered diagnosis and treatment platforms.

In October 2016, Ali Health announced the launch of a comprehensive health management service platform for consumers—the “Smart Care Initiative”—in collaboration with Alibaba Intelligence and nearly 20 renowned smart health device and service providers, including Sinocare, Haier Medical, Pocket Diabetes Doctor, Yuwell, Roche, Bayer Ascensia, and Omron.Taking the first step toward an intelligent personal health management platform.

“Smart Care Program” refers to the use of health devices such as smart glucometers, smart blood pressure monitors, smart thermometers, and smart body fat scales to promptly record and upload users’ physiological metrics, automatically generate health trend reports, and incorporate remote physician guidance when appropriate, thereby providing personalized medical services and whole-lifecycle health management. Currently, the program covers areas such as blood glucose and blood pressure management, weight loss, and prenatal/postnatal and maternal-infant care, effectively serving nearly every member of the household.

In the medical field, Ali Health invested in and took a stake in Wanli Cloud, which established“Remote Imaging Center” provides grassroots medical institutions with services including managed operations, interpretation, and expert consultation for complex cases.Meanwhile, Wanli Cloud will also establish a professional “Third-Party Imaging Center” to help divert imaging service demand from large hospitals.

Patients can initiate personal remote imaging requests via the Ali Health App, seeking secondary diagnostic consultation opinions on medical images from experts in the “Expert Studios” hosted by affiliated centers or physicians practicing at multiple institutions. This enables patients to access expert image interpretation and diagnosis not only through offline medical institutions but also via multiple online channels on the client platform. Building on the reduction of misdiagnosis rates, Ali Health will next strive to standardize these related services.

Ultimately, the logic behind Alibaba Health’s approach of “leveraging big data to empower healthcare” is “Helping Existing Business Models Operate More Effectively", of course, enhancing the patient experience in this process is an inherent part of the endeavor.

If the focus of online hospitals, remote imaging platforms, and health management services is to help companies across the healthcare industry chain deliver better services, thenSmart Healthcare Is Undoubtedly a Systematic Medical Solution。

Alibaba Health’s strategic plan is to extend its reforms in consultation and payment processes into the realm of health management, aligning with users’ needs across the pre-consultation, during-consultation, and post-consultation phases, thereby benefiting public health nationwide.

In this regard, there are both shifts in the hierarchy of user needs and guidance at the government level. First, regarding user demand, as the aging population trend accelerates and the incidence of chronic diseases rises, the public’s proactive and upgraded demand for healthcare is gradually increasing.China has currently entered a period of explosive growth in medical demand.。

It is precisely within this window of demand that medical regulatory authorities have introduced a series of policies aimed at addressing this issue through internet-based healthcare and smart healthcare solutions.

Alibaba Health’s “Smart Healthcare” initiative undoubtedly aligns with this shift in demand. So, how has Alibaba Health implemented this strategy? First, through its partnership with Alipay, it connects hospitals and moves certain aspects of the patient journey online, such as appointment registration and payment. Second, by facilitating digital transformation within hospitals, it aims to make smart healthcare a standard practice. Meanwhile, initiatives such as the “Intelligent Care Program,” the “Pharmacy Pioneer Alliance,” and the “One-Minute Clinic” have accelerated this process.

Smart healthcare has several specific application scenarios,First, optimization of the patient consultation process, by completing part of the consultation process online, it shortens patients' stay in hospitals, improves medical efficiency, alleviates congestion at large hospitals, and enables limited resources to serve a larger population.

Next is medical artificial intelligence,Alibaba Health leverages its accumulated medical big data, along with the collection of data on medical practice processes through smart healthcare solutions, to advance the development of medical artificial intelligence.

The initial artificial intelligence product launched by Alibaba Health was calledHealth Honey——An intelligent Q&A engine for medicine and health, its initial use case is to assist users in gathering pre-diagnostic information, thereby helping them more easily find the appropriate physicians.

This engine, similar to an intelligent Q&A chatbot, can answer general medical and health questions from ordinary users and then automatically match them with appropriate doctors or pharmacists based on their needs. Meanwhile, for each user query, the engine automatically generates several candidate responses for healthcare professionals to review. These professionals can directly select a response, make minor modifications, or craft a new one to provide to the user. Furthermore, these modifications and newly added responses are fed back into the engine to automatically optimize its coverage.

The engine’s principle is based on multiple medical and health knowledge bases. By leveraging artificial intelligence (including deep learning) technologies, the intelligent engine can fully integrate, utilize, and accumulate the collective experience and wisdom of physicians, pharmacists, and nutritionists on the platform.This approach not only avoids prolonged user wait times and enhances the user experience, but also improves the overall service quality and efficiency of Alibaba Health’s online physicians.

Not long ago, Alibaba announced the establishment of “ET Medical Brain System”. In line with this strategic direction, Alibaba Health has leveraged its case library and knowledge base to conduct deep machine learning, developing the Doctor You series of artificial intelligence products. These products serve as professional physician assistants in areas such as patient triage, medical imaging diagnosis, clinical care pathways, and health management, significantly enhancing physicians’ work efficiency and quality. The product suite includes a physician competency training platform, a clinical medical research support platform, and a medical imaging engine co-developed with the IDST team, among others.

Taking the physician competency training platform as an example, the system can simulate a patient consultation scenario. Physicians undergoing assessment by the training system are required to obtain medical history, perform physical examinations, order and interpret ancillary tests, and ultimately establish a diagnosis and implement treatment plans. Meanwhile, the system guides physicians in taking appropriate diagnostic and therapeutic actions based on the patient’s status at different stages of the consultation. The virtual patient responds to the physician’s interventions by reflecting corresponding changes in physiological status, generating test results, and updating post-intervention conditions, therebyEnable physicians to complete training in a structured and targeted manner within simulated scenarios.

From optimizing the patient consultation process to AI-assisted healthcare, Alibaba Health has outlined application scenarios for “smart healthcare.” Annual report data also shows that Alibaba Health has made significant investments in this area. In fiscal year 2017, its product development expenditure reached RMB 109 million, an increase of RMB 32.43 million year-on-year, representing a growth rate of 42.6%.Alibaba Health has hired more information technology engineers to expand its healthcare service network, build a health management platform, and develop a medical intelligent analytics engine.”

It is evident that Alibaba Health’s flagship smart healthcare initiative represents a further optimization of the healthcare system built upon medical big data, with a focus on enhancing patient experience and reducing consultation time. Meanwhile, ET Brain, which embodies the highest aspiration of smart healthcare, will chart an even more promising roadmap for its future development.

And just yesterday (May 16), the Zhejiang Provincial Health and Family Planning Commission signed a strategic cooperation framework agreement with Alibaba. The two parties agreed to fully leverageAlibaba’s subsidiaries, including Alibaba Health and Alibaba Cloud, possess technological advantages in mobile payments, cloud computing, big data, artificial intelligence (AI), and internet-based healthcare., building upon the existing foundation of informatization construction by the Zhejiang Provincial Health and Family Planning Commission, with ““Internet+” Thinking: Building an Efficient, Inclusive, and Intelligently Integrated Healthcare Ecosystem, jointly exploring new models of “Internet + Healthcare” services.

Such large-scale provincial trials can also help Alibaba Health’s Smart Healthcare identify more application scenarios and refine its smart service system. If conducted properly, Alibaba Health’s “Smart Healthcare” concept could be rolled out nationwide, becoming a benchmark model for the future of healthcare.

Aligned with the Alibaba Group’s corporate mission of building platforms and ecosystems, Alibaba Health will also focus on establishing a healthcare ecosystem in the future. It aims to serve various enterprises across the industry chain, create a closed-loop ecosystem encompassing pharmaceuticals, medical devices, e-commerce, healthcare services, and insurance, and ultimately benefit every ordinary user.Let Everyone Enjoy “Happiness” and “Joy”。