Health160 Founder Luo Ningzheng Outlines Strategy to Empower Primary Healthcare in IPO Filing

In the era of fierce competition within the internet healthcare industry, Health 160 stood out from tens of thousands of competitors. During the 2008 SARS outbreak, it developed the Blue Dragonfly Hospital Infection Control Software to monitor infectious diseases in domestic hospitals, acquiring thousands of hospital clients and laying a critical foundation for its subsequent expansion into mobile healthcare.

In 2009, the Ministry of Health issued the "Opinions on Implementing Appointment-Based Diagnosis and Treatment Services in Public Hospitals," explicitly requiring all public tertiary hospitals to provide real-name appointment registration services. These hospitals were permitted to collaborate with third-party intermediaries to offer such services. In close alignment with this policy, Health 160 (Shenzhen Ningyuan Technology) aggressively expanded into the appointment registration sector, thereby formally entering the field of internet healthcare.

With the continuous relaxation of policies, Health 160 has also seized the opportunity for rapid growth. To date, the platform has connected with more than 3,000 large hospitals across China, boasting over 100 million registered users, approximately 500,000 registered doctors, and more than 300 million user visits.

“Jiuyi 160 will continue to prioritize its strategic layout in primary healthcare in 2017,” said Luo Ningzheng, CEO of Jiuyi 160.

“I believe that primary healthcare can be divided into urban and rural sectors. Rural primary healthcare is severely underdeveloped; medical institutions suffer from a shortage of physicians, who receive low compensation—often earning less than 1,000 yuan per month—while being responsible for the healthcare needs of over 1,000 households. Many village doctors lack dedicated clinic spaces, with most practicing out of their own homes under quite arduous conditions,” said Luo Ningzheng.

Pain Points Facing Urban Primary Healthcare: First, the general public has limited awareness of domestic healthcare policies. For instance, while the national government promotes a tiered diagnosis and treatment strategy, medical costs for the same condition are significantly lower at community health centers than at public hospitals; however, this remains largely unknown to the public. Second, there is a lack of scientifically informed healthcare-seeking habits among the Chinese population, with patients flocking to large hospitals for both minor and major ailments. Given the extremely limited medical resources at these institutions, this behavior has resulted in the current state of severe overcrowding in major hospitals.

Therefore, Luo Ningzheng stated that Health 160 focuses on addressing issues in urban primary healthcare, striving to build an online hospital for the Chinese population. By partnering with public hospitals and optimizing processes such as appointment registration, ticket collection, waiting, and medical payment, the platform aims to reduce patients’ time spent seeking medical care and improve their overall healthcare experience.

In addition, since 2015, Jiuyi 160 has successively partnered with primary healthcare institutions, including grassroots hospitals and community health service centers, to gradually implement services such as tiered diagnosis and treatment and patient referrals. Luo Ningzheng stated that achieving a tiered diagnosis and treatment system is a relatively long-term process. The scarcity of resources in public hospitals can only be alleviated through institutional reforms, while what Jiuyi 160 can do is to gradually guide the public to develop scientific healthcare-seeking habits.

Within the current strategic framework of 160 Healthcare, community health centers, hospitals, and pharmacies constitute the core business segments, which also serve as the primary sources of revenue. These include: first, online hospital services represented by end-to-end hospital operations; second, a tiered diagnosis and treatment platform; and third, online community health center services.

"From the perspective of primary care demands, doctors, patients, and institutions have different needs. 'Therefore, there are many opportunities in primary care centered around these three distinct demands,' Luo Ningzheng admitted."

For healthcare institutions, Shenzhen Ningyuan Technology collaborates with the government to implement tiered diagnosis and treatment and optimize the allocation of medical resources, such as through two-way referral systems and regional appointment platforms.

Therefore, the focus for physicians is primarily on training, particularly for general practitioners in primary care settings. Additionally, we collaborate with numerous community healthcare providers to facilitate the enrollment of patients under family doctor contracts.

Third, patients often bypass primary care providers due to the inability to find competent physicians or a lack of trust in them, seeking treatment instead at county-level hospitals or more distant medical centers. The generally limited clinical capabilities of primary healthcare institutions have eroded public trust, a deficit that will take considerable time to rectify. Furthermore, cross-regional referrals involve complex issues of benefit distribution; relying solely on healthcare institutions and government bodies is insufficient to drive progress, necessitating the involvement of third-party entities as facilitators.

Thus, Health 160 objectively presents the costs of travel distance and price in a data-driven format; as for how to choose, it ultimately depends on how patients weigh these factors.

Regarding the issue of two-way referrals between primary care institutions and higher-level medical facilities, Luo Ningzheng stated that prior to the involvement of third-party platforms, referrals among tertiary hospitals typically occurred only between a limited number of departments, with the majority flowing from community health centers to upper-tier hospitals. Referrals between peer-level medical institutions across different regions were virtually nonexistent, a status quo that has been disrupted by JiuYi 160.

On the Jiankang 160 platform, departments across partner hospitals can facilitate seamless referrals. Hospitals also allocate a portion of their appointment slots to community health centers. When upper-tier hospitals determine that a patient’s condition is not severe, they may refer the patient to a community health center. Additionally, free referrals are enabled between peer-level medical institutions across different regions.

“To date, nearly 4 million patient visits have been referred downward. This type of service addresses a critical unmet need, so we have not engaged in any deliberate promotional efforts,” said Luo Ningzheng.

According to the 2016 Health and Family Planning Statistical Yearbook, there were 925,000 medical and health institutions nationwide, 33 times the number of hospitals. However, the average annual patient visits per primary care institution were only 4,700, while the average for hospitals was 23 times higher. Primary care institutions currently handle a very small proportion of total patient visits, indicating enormous potential for medical service delivery.

Driven by strong policy support and the downward shift in demand, the primary healthcare market is poised for an explosive boom once these initiatives are successfully implemented; Health 160 may have already secured its early entry into this arena.