From Putian Roots to Chronic Care Visionary: Chen Tao Files IPO for His Specialty Clinic Chain

At a pivotal moment when mobile health is vigorously shedding its bubble and urgently needs to transform and upgrade, discussing chronic disease management—one of the most typical examples of a “white elephant” in mobile health—may seem somewhat belated, or even slightly untimely.

Yet, what may be even more “incongruous” is that Chen Tao is entirely unbothered by his background in the Putian medical system. For this native of Tianshui, Gansu Province, his tenure at two Putian-affiliated healthcare groups has brought him a greater sense of professional fulfillment than the external skepticism directed at the Putian network.

Chen Tao joined Changsha Liren Obstetrics and Gynecology Hospital in 2017, when his internship began (though he graduated from university in 2008). At that time, the hospital was still in the project preparation phase. This means that Chen Tao experienced the entire process of building a private hospital from scratch right at the start of his career, which was undoubtedly a stroke of luck for a newcomer to the workforce. Starting with the Hunan project, Chen Tao moved across multiple cities—including Handan in Hebei Province, Lanzhou in Gansu Province, Yiyang in Hunan Province, and Chengdu in Sichuan Province—as Bosun Group (Hemei Medical) expanded its operations.

Changsha Liren Maternity Hospital is a subsidiary of Hemei Medical, which is now listed on the Hong Kong Stock Exchange. Prior to its initial public offering, Hemei Medical divested certain hospital assets, ultimately including 11 relatively higher-quality hospitals in the listed entity, thereby joining the select group of privately owned healthcare companies that are publicly traded.

At Hemei Medical, Chen Tao also developed a comprehensive and multidimensional understanding of the private healthcare sector, particularly gaining familiarity with the distinct characteristics of medical markets across China. In 2013, Chen Tao made his first career move, joining Maria Hospital in Panyu, Guangzhou, which is affiliated with the Bo’ai (Medical) Enterprise Group, as Operations Director.

In 2014, Chen Tao spearheaded a bold reform at Maria Hospital under the model of “Treatment First, Payment Later.” The pilot results were surprisingly positive: during the first month, there was only one instance of a patient leaving without paying, which later proved to be a misunderstanding as the patient had simply forgotten and subsequently returned to settle the bill.

This move garnered extensive coverage from many mainstream media outlets across China. As the most satisfying and classic operational success during his tenure at Bo’ai Hospital, Chen Tao still beams with pride when recalling it in an interview with VCBeat. Of course, there were reasons behind this outcome. In an era marked by prominent doctor-patient conflicts, such an unusual phenomenon was able to occur. Chen Tao attributed this primarily to Maria Hospital’s strong reputation. He noted that after several years of operation, Maria Hospital had already established a certain brand advantage among residents in the surrounding areas, even attracting dozens of clients from Hong Kong and Macau each month.

Also in 2015, amidst the sweeping tide of mobile health, Chen Tao jumped on the bandwagon by founding Xianyi Technology. Several key co-founders had years of experience in the healthcare industry, including the technical co-founder, who was Chen Tao’s former colleague and the head of technology at Boai Group.

As a project focused on chronic disease management, the primary challenge lies in choosing between a direct-to-consumer (2C) model and a business-to-business-to-consumer (2B2C) model. Among the wave of internet-based companies offering chronic disease management tools directly to patients, Lanxinkang left the deepest impression on reporters by positioning itself as a provider of chronic disease management solutions for pharmacies—adopting the 2B2C model. At a time when many chronic disease management companies have retreated from the market, Lanxinkang revealed that it now provides chronic disease management and pharmaceutical marketing services to 8,000 pharmacies. The 2B2C model is also hailed as the most effective development strategy in the latest 2016 annual report by the pioneer of online medical consultations in the United States.

Chen Tao also adopted a B2B2C strategy from the outset. However, his target B-side clients were primary care hospitals (Tier 1), primarily those located in relatively peripheral urban areas. He believed that residents in these areas possessed both the spending power and the awareness to consume healthcare services, yet had less access to medical resources compared to those in central urban districts. In contrast, residents in true rural township areas still need to improve their understanding of internet-based chronic disease management and their purchasing power.

Xianyi Technology’s chronic disease management system was officially launched in May 2016. To date, it has focused exclusively on hypertension and diabetes. By partnering with medical institutions to provide smart blood pressure monitors and smart glucometers to community residents—either through rental or complimentary distribution—the system enables physicians at partner institutions to continuously monitor patients’ conditions.

From a functional perspective, the system is quite streamlined. It primarily relies on patient measurement data collected by the system; once values exceed the normal range, it alerts physicians to intervene or issue warnings, such as providing medication guidance or recommending medical consultations. If patients’ children have linked their WeChat accounts, they will also receive synchronized notifications.

The significance of this intervention lies not in remote command and control, but in providing physicians with an appropriate opportunity to bring patients back to the hospital for face-to-face consultations. This approach ensures patient safety and identifies a source of patients for further appropriate treatment. Increasing revenue for primary care hospitals that lack sufficient patient volume is the primary driver for their adoption of new technologies.

According to Chen Tao, the company currently has partnerships with more than 30 community hospitals, among which the earliest collaborationThe Affiliated Hospital of Integrated Traditional Chinese and Western Medicine, Medical College of Qinghai University, has been collaborating for nearly one year, with over 700 individuals under monitoring. Beijing Guoyitang Hospital (formerly Beijing Hou Liping Hospital) has been collaborating for six months, with more than 400 individuals under monitoring. It was specifically emphasized that all operations were conducted purely through market mechanisms without government involvement. Additionally, promotional efforts are simultaneously underway in Shangluo (Shaanxi), Tianshui (Gansu), Xinyang (Henan), Hefei (Anhui), Zhuhai (Guangdong), and other regions, with the number of monitored individuals continuing to grow.

To date, among the more than 30 pilot partner hospitals, nearly all are private institutions. This is primarily due to considerations regarding the speed of collaboration execution, as well as the sustainability of market-oriented decision-making and operations. Notably, Chen Tao’s background in the Putian medical network represents thousands of private hospitals, a resource he describes as critically important. Currently, the company has begun recruiting regional agents, some of whom, leveraging government connections, are collaborating with local health and family planning commissions to advance regional chronic disease management projects.

Regarding the revenue model, Xianyi Technology has nominally set a monthly fee of RMB 15. However, as the project is still in its early stages, the company has largely forgone these fees in favor of physicians, who in turn generally do not charge patients. Consequently, current revenue remains minimal. Looking ahead, Chen Tao stated that the company plans to introduce a broader range of medical and health services once it has accumulated a substantial user base.

However, Chen Tao did not shy away from acknowledging that the rollout speed of this chronic disease management system was less than satisfactory. In light of this, Xianyi Technology launched another strategic initiative in the second half of 2016 by entering into comprehensive, in-depth cooperation with Jiulu Medical, which specializes in establishing brick-and-mortar clinics. This move was driven primarily by two objectives: first, to create model clinics for Xianyi Technology’s chronic disease management system, thereby accelerating its deployment; and second, to actually establish a chain of community-based clinics and micro-hospitals.

By the end of 2016, the first community-based hospital had officially opened in Tianshui, Gansu Province. Covering an area of 2,000 square meters, it features both outpatient and inpatient departments and has obtained designated status for medical insurance reimbursement. According to Chen Tao, the clinic’s medical and nursing team consists of approximately 40 staff members. It currently serves more than 200 outpatients per day, and with chronic disease monitoring and management along with specialized clinical departments, it is expected to reach break-even soon.