CEIBS Doctors Group Co-Founder Xu Qing Highlights Internet-Based Medical Education as an Undervalued Goldmine in IPO Prospectus

Editor’s Note: On December 11, the Internet Pharmaceutical Industry Development Forum—Internet Healthcare Investment and Financing Forum was held in Beijing. This article presents the speech delivered by Xu Qing, Co-founder of China-Europe Doctors Group, at the conference. It is published with authorization from VCBeat, with edits and abridgments.

If we recall the past year, there was a widely circulated saying: “Even a pig can fly if it stands at the eye of the storm.” The first such “storm” referred to the internet sector, the second to healthcare, and the third to internet-based healthcare. Internet healthcare has remained a hot topic in recent years; however, this year I believe many internet healthcare companies have found themselves like pigs without wings, experiencing a hard landing. Why has this occurred? It is because stakeholders still fail to grasp many of the fundamental dynamics underlying the healthcare sector. In contrast, when looking at the training segment, I observe that both medical professionals and my friends are continuously sharing information about hospital management and medical technology training programs, suggesting that this particular industry is thriving.

Internet-based healthcare aims to leverage digital platforms to address the uneven distribution of medical resources, including difficulties in accessing medical care. In reality, however, the number of top-tier physicians and hospitals is limited, and their schedules are already heavily occupied by offline clinical activities, leaving them with little time for online engagements. Training has emerged as a viable solution: if all physicians undergo standardized training, the overall quality of medical care will improve. Consequently, patients would be able to receive comparable treatment outcomes regardless of which physician they consult.

Earlier this year, we hosted a dialogue program for primary care physicians. Chinese-American doctors in the United States noted that the greatest strength of the U.S. healthcare system lies in its standardized physician training, which ensures minimal variation in medical competency and provides patients with consistent quality of care regardless of the provider they choose. Despite extensive discussions on tiered diagnosis and treatment in China, the most critical factor for successful implementation is ensuring that large hospitals support the professional development of physicians in smaller hospitals, thereby helping them enhance their clinical skills. Therefore, I maintain that standardized training is the fundamental solution to addressing the imbalance in medical resources and the difficulty of accessing medical care.

Hospital training can be categorized by content, primarily into medical technology and hospital management. Medical technology training is relatively straightforward, covering specialized knowledge and discipline-specific skills. In contrast, hospital management training encompasses a broader scope, including operational management, human resources management, financial management, and logistics management. Additionally, many courses on medical humanities and doctor-patient communication can also be classified under hospital management training. Training formats mainly include open courses, in-house training, academic forums, and skills coaching.

So, who are the primary instructors for these training programs? They include hospital executives, university professors, department heads, government officials, and successful business professionals, including key technical personnel. These individuals often serve as training instructors, and we can see that the majority of them are experts. Precisely because they are experts, it is difficult for them to work as full-time professional trainers; instead, they are typically engaged on an external or part-time basis. Through delivering training, these experts can earn legitimate income and build their personal brands, which makes them willing to share their knowledge.

A recent report on the training market indicates that the total number of healthcare personnel in China reached 10.69 million in 2015. At a training fee of RMB 1,000 per person, this translates to a market size of over RMB 10 billion. From the hospital perspective, there are more than 2,000 Grade III Class A hospitals in China. In fact, these hospitals allocate substantial annual budgets for training; it is not uncommon for individual institutions to spend several million RMB on training expenses. Viewed from this angle, the market scale would be even larger.

However, the current landscape of the training market is characterized by fragmentation, disorganization, and weakness. "Small" refers to the fact that many training companies are quite small, with annual revenues commonly in the low millions, while those exceeding ten million are rare. "Scattered" indicates that training companies are spread across China, with many focusing on leveraging local resources for training in specific regions. "Disorganized" means that various parties are organizing training programs without unified standards for content, instructor sourcing, or teaching quality, and there is a lack of overall planning. "Weak" signifies that training companies generally have lower-quality personnel and lack brand recognition, core resources, and proprietary technology. Consequently, the barrier to entry in the training industry is not particularly high.

I previously stated that internet-based training is a gold mine waiting to be tapped; in fact, hospital training itself is also a gold mine. This can be examined from several perspectives:

First, it is our rigid demand., we medical personnel are required to engage in continuous learning as a necessity, whether voluntarily or involuntarily. Even if you are reluctant to study, your professional title requirements and many performance evaluations mandate annual learning.

Second, it is a natural gateway., including natural entry points for product integration and resource consolidation. Through training, we can connect with a wide range of relevant products and effectively integrate related resources.

Third, significant potential for integration, the companies in our hospital's training sector are currently quite fragmented; effective integration could help them improve efficiency.

Fourth, although the landscape is somewhat chaotic, the barrier to entry is low.It is also a relatively easy medical startup project to execute.

Next, I will introduce “Internet+” hospital training. In fact, compared with traditional hospital training, “Internet+” hospital training offers more advantages:

First, from a structural perspective, we recognize that while medical consultations may not be well-suited for the “Internet Plus” model, medical education is highly compatible. Whether it involves doctors assessing patients or patients consulting doctors, both parties tend to view remote consultations conducted via mobile or computer screens as less reliable. In contrast, online learning is more readily accepted than remote clinical care. Second, healthcare professionals generally have limited opportunities for continuing education, particularly for off-site training, despite the vast amount of content available for study. The internet can effectively address this challenge. Third, for training organizations, adopting internet-based approaches can significantly enhance training efficiency. For instance, an in-person training session might accommodate only hundreds or, at most, thousands of attendees; however, by leveraging internet technologies, the same training content can be simultaneously accessed by tens of thousands or even more participants.

Therefore, our "Internet + Training" model is also easy to implement.

In addition, another report indicates that the market size of online education in China is approximately RMB 80 billion, with online vocational education accounting for more than 30%. Moreover, the annual growth rate is around 40%, which is very good news for our internet sector. This industry is, in fact, experiencing rapid growth.

What are the stages of our "Internet + Hospital" training? I have broadly summarized them into three phases. The first phase involves the traditional process of video-on-demand (VOD) training, where many enterprises upload recorded training videos online for viewing. The second phase integrates live streaming, VOD, and social interaction. The inclusion of live streaming enhances participant engagement; with VOD alone, learners may feel less urgency, believing they can watch the videos at any time, which often diminishes their enthusiasm. In contrast, the live-streaming model creates a sense of fleeting opportunity, encouraging participants to value the experience more highly. The third phase, I anticipate, will be immersive simulation-based training. With advancements in virtual reality (VR) technology, users may soon don VR headsets to feel as if they are physically present at the training site. This approach would offer levels of interaction and immersion closely resembling those of in-person participation.

In terms of revenue models, there are primarily four aspects. First, charging users directly. Second, generating income through advertising and sponsorships. Third, product extension, such as offering other offline or online products that can be promoted and monetized through training programs. Fourth, providing pure internet-based technical training services; for instance, some companies solely offer live-streaming equipment services without organizing any events. Additionally, offering free services has become a prevalent trend among many internet companies today.

Below are several representative companies in the “Internet + Healthcare Training” sector. First, 24-Hour Medical Channel, a traditional medical video website founded in 2005, initially focused primarily on professional certification coaching and online question banks for healthcare professionals. It now offers a substantial library of videos, half of which are self-produced and half acquired through copyright licensing. Its revenue model is based on individual membership fees. Doctor Station, a well-known platform that evolved from Yixuejie (Medical World), was launched last year and incorporates all the hospital training functionalities featured in its Version 2.0. Additionally, it provides numerous C2C and B2C services, also charging individuals service fees. The third example is Shenzhen Ruiqu Company, a provider of comprehensive solutions for the informatization of medical education. Originally specializing in online conference and training technical services, it has significantly expanded into the healthcare sector in response to growing industry demand. It currently offers live streaming and medical MOOC platforms, as well as solutions tailored for hospitals, including standardized residency training systems and digital operating room systems.

Established in 2006, the China-Europe International Hospital Management Center previously launched the Chinese Medical Continuing Education Network in 2005. Our initial vision was to create an online platform aggregating information on hospital training, encompassing both medical technology and management. However, as our operations evolved, we transitioned into an organization providing offline services, including hospital training, management consulting, and trusteeship. Our core mission has consistently revolved around supporting hospital development.Currently, we conduct over 50 open-enrollment training courses and more than 100 in-house training sessions annually. Our faculty comprises over 130 renowned experts, and we utilize training bases at more than 100 Grade A tertiary hospitals as our primary venues for instruction. Additionally, we have expanded our service offerings to include hospital management consulting, publishing, and physician group services. While our technical training components have been slightly reduced, we continue to cover comprehensive hospital management topics extensively.Our instructors include university professors, government officials, industry leaders, corporate practitioners with hands-on experience, and distinguished physicians. Professor Chen Yaguang serves as our chief expert. The images shown depict scenes from our training sessions. In the past, we also published numerous training CDs on hospital management, which can be considered Version 1.0 of "Internet Plus Training," designed for playback on computers. Furthermore, we have jointly established hospital management training bases with over 100 Grade A tertiary hospitals across China. Notably, we partnered with the People's Hospital of Xinjiang Uygur Autonomous Region to establish the China-Europe Xinjiang Branch, thereby deepening the roots of our training initiatives in the Xinjiang region.

Another key aspect is our transformation. We observed that while live streaming was not yet widely popular at the beginning of this year, the integration of internet technologies with training—our "Internet Plus Training" model—was clearly an emerging trend. Consequently, we explored transitioning our traditional offline training programs to online platforms, and the initial results have been promising. This shift has enabled many hospitals, particularly those unable to participate in our on-site sessions, to independently organize their medical staff to attend our training. The images shown here depict such hospital-organized sessions, which can also be accessed via mobile devices. Furthermore, we rapidly upgraded our website by adding live streaming and video-on-demand functionalities. Recently, we collaborated with Peking University International Hospital to establish a Remote ECG Diagnosis Center. Looking ahead, we plan to set up a dedicated live streaming studio at Peking University International Hospital each year, regularly inviting their physicians to conduct training sessions.

This outlines our development strategy for “Internet+” initiatives across Central and Eastern Europe, progressing from offline operations to web-based platforms, and then to mobile applications. Currently, our web and mobile platforms primarily serve business-to-business (B2B) clients. In the future, we may expand our offerings to include health education and related training programs tailored specifically for physicians and patients.

Of course, as a traditional training company, we at CEIBS have also encountered significant challenges in our transition to the "Internet Plus" model.First, where do the resources required for transformation come from? This likely begins with an Internet mindset. Second, there is the issue of funding and talent, which are largely absent in traditional industries; indeed, most traditional hospital training companies lack these entirely. Another concern is whether the adoption of “Internet + Training” will deliver a significant shock to traditional training models., we initially did not wish to disrupt our traditional business, but in reality, there may still be some impact.Third, the training industry has relatively low barriers to entry; how can training companies establish their own competitive moats? Fourth, many training firms rely on integrating other resources for profitability or growth, but can “Internet Plus” truly achieve effective integration with other products? These are pressing questions that perplex traditional training companies like ours.

Today’s forum focuses on investment and development. From an investor’s perspective, I believe the following key aspects warrant careful analysis when evaluating hospital training companies:1. Control over expert resources.2. Richness and differentiation of content.3. Distribution channels—ensuring that our training programs reach and engage their intended audience.4. Technology. Although the technological requirements in this sector are relatively modest, breakthroughs in new technologies can still drive significant industry growth.5. Unique characteristics. If training providers offer largely homogeneous content, participants may perceive limited value. In contrast, companies that develop distinctive, independently designed curricula enjoy a substantial competitive advantage.