Mobile Healthcare Pioneer '91160' Nears Profitability and Expands into Pharmaceutical E-commerce

On December 20, 2016, “Jiuyi 160,” the first publicly traded mobile health company, jointly held a press conference in Guangzhou with the Second Traditional Chinese Medicine Hospital of Guangdong Province and China Merchants Bank to launch its full-process online hospital project.

During the event, Cheng Kefeng, Vice President of Jiuyi160 and General Manager of its South China Region, stated in an interview with VCBeat that, to date, Jiuyi160 has partnered with over 3,000 hospitals across China, with its services covering more than 200 cities. Notably, the platform achieves nearly 100% coverage of full-process services at major hospitals in Shenzhen, and close to 80% in Dongguan—including the top three largest hospitals.

As one of China’s four major cities—Beijing, Shanghai, Guangzhou, and Shenzhen—Guangzhou will be a key market that JiuYi 160 intends to aggressively expand into. The successful launch of the full-process online hospital services at the Second Traditional Chinese Medicine Hospital of Guangdong Province marks its entry into the Guangzhou market.

The full-process online hospital service primarily extends beyond the appointment registration business that Jianyi 160 was previously known for. By effectively connecting hospitals, doctors, and patients, it directly addresses the longstanding pain point of “three longs and one short” in traditional healthcare—namely, long waits for registration, consultation, and payment, coupled with short consultation times. It streamlines processes such as pre-consultation appointment scheduling, mobile payment during consultations, and post-consultation retrieval of test reports, thereby leveraging IT technology to advance the digital transformation of hospitals.

It is reported that the Second Traditional Chinese Medicine Hospital of Guangdong Province had previously attempted to launch internet-based medical services and coordinated with relevant companies on technical integration, but the progress and outcomes were less than ideal. However, JiuYi160 received praise from the hospital, which stated that its performance on this project “exceeded our expectations.”

President Cao Lizhong of the Second Traditional Chinese Medicine Hospital of Guangdong Province emphasized that, under the new circumstances, the healthcare industry is shifting its focus from “hard power” to “soft power.” In the era of “Internet+,” hospital informatization will bring revolutionary changes to improving patients’ medical experience. He expressed hope that, through this collaboration and by leveraging the mature technology of JiuYi160 and the strong reputation of China Merchants Bank, public access to medical care will become more convenient and efficient.

It was revealed that the Second Traditional Chinese Medicine Hospital of Guangdong Province introduced and launched a trial run of its full-process online hospital in November. As of now, approximately four weeks have passed. From the perspective of the most critical service—online “payment”—there have been over 3,500 transactions, with a total transaction amount exceeding RMB 400,000.

Jiuyi160 stated that for traditional Chinese medicine hospitals, which predominantly serve elderly patients, such growth in the initial phase of the project was quite surprising. However, Jiuyi160 allows each account to add up to five registered patients. This means that if an elderly family member seeks medical attention, their relatives can make online payments remotely after the physician has issued the prescription.

However, the payment business still faces certain obstacles in terms of medical insurance reimbursement. In Shenzhen, the first batch of 17 hospitals has been approved for online medical insurance payment and settlement. In Guangzhou, currently only three hospitals are authorized to accept online payments covered by medical insurance. This means that patients using online payment at the Guangdong Second Traditional Chinese Medicine Hospital still need to visit a manual service counter to complete the reimbursement procedures. It is precisely for this reason that relevant parties are calling for greater policy liberalization.

Guangdong Provincial Second Traditional Chinese Medicine Hospital (Guangdong Provincial Academy of Chinese Medical Sciences and Engineering) is a comprehensive provincial-level institution for TCM medical care, scientific research, and teaching, directly administered by the Guangdong Provincial Health and Family Planning Commission and the Guangdong Provincial Administration of Traditional Chinese Medicine. The hospital employs 1,200 professional and technical staff, including 248 senior-title professionals, seven experts receiving special government allowances from the State Council, and eight renowned TCM physicians of Guangdong Province. Currently, the hospital has developed into a large Grade III Class A TCM hospital comprising the main campus on Hengfu Road, the Baiyun Campus, and three outpatient departments located in Taojin, Wushan, and Lujing East. It currently operates more than 1,200 beds, handles over 4,000 outpatient and emergency visits per day on average, and discharges nearly 30,000 patients annually. The hospital offers more than 30 specialized TCM departments, including four national key disciplines (specialties), three national key TCM specialty construction (incubation) projects, and ten provincial key TCM specialties (specific diseases). The Academy boasts three “Level-3 National TCM Scientific Research Laboratories” and one State Key Laboratory. Its research achievement, “Research and Application of Key Technologies for the Industrialization of TCM Formula Granules,” was awarded the Second Prize of the National Science and Technology Progress Award.

Since the beginning of this year, the internet healthcare sector has entered its first period of adjustment. Many startups are struggling to move forward, caught between the difficulty of implementing viable profit models and the capital winter, with some even collapsing directly due to broken funding chains.

As the first publicly listed mobile healthcare company, Jiuyi 160 has also faced certain performance pressures. However, Cheng Kefeng revealed that Jiuyi 160 achieved qualitative leaps for two consecutive months in October and November. Additionally, regarding the latest developments in the most recent round of financing, which had long drawn industry attention, the company announced on November 18 that a private placement worth RMB 56.5 million had been completed.

Currently, JiuYi160 primarily comprises three major business segments: first, internet-based medical services, represented by its full-process online hospital operations; second, provision of technical solutions for tiered diagnosis and treatment; and third, platform-based businesses, positioning itself as the “Alibaba of the healthcare industry.” In addition to offering proprietary services such as appointment registration to its over 100 million registered users, it integrates wearable devices and health insurance. For instance, JiuYi160 has launched cancellation insurance in partnership with insurance companies, under which users receive compensation if their scheduled specialist fails to appear for the appointment. Furthermore, JiuYi160 is leveraging its big data resources to collaborate with insurers in developing new insurance products.

These three major business segments also correspond to the company’s current primary sources of revenue.

Taking the full-process online hospital jointly launched by JiuYi160, Guangdong Provincial Second Traditional Chinese Medicine Hospital, and China Merchants Bank as an example, JiuYi160 serves as the technology solution provider, while China Merchants Bank, as the banking partner, will cover the costs of the technical solution. In other words, JiuYi160 also generates a certain amount of revenue from China Merchants Bank through this project.

As for the technical solutions for tiered diagnosis and treatment, such as the Shenzhen Luohu Hospital Group, its medical consortium model—comprising five large hospitals and 35 community clinics—requires a tiered diagnosis and treatment system to support the implementation of actual clinical operations.

Currently, the 91160 platform has nearly 500,000 registered physician users, who have begun providing services such as patient consultations and follow-ups.

Furthermore, JiuYi160 is vigorously promoting international medical services, such as connecting domestic patients with high-end healthcare in the United States, health checkups in Japan, medical aesthetics services in South Korea, and in vitro fertilization (IVF) treatments in Thailand.

Since the beginning of this year, Juyi160 has stated on multiple occasions that its revenue is growing rapidly.

Beyond the aforementioned business operations, Jiuyi 160’s strategic expansion in the pharmaceutical sector is particularly noteworthy.

According to the announcement, following its most recent round of financing, Jiuyi 160 acquired a pharmaceutical e-commerce enterprise and plans to make significant investments in this sector. Recently, its first O2O pharmacy—located next to Shenzhen Bao’an District Central Hospital—has officially opened.

Cheng Kefeng stated that the pilot program at this pharmacy is progressing smoothly, with plans to replicate the pharmacy business model on a larger scale. This indicates that Jiuyi 160 is poised to make significant inroads into the pharmaceutical market.

With the strict implementation of the zero-markup policy on pharmaceuticals, drug-related operations are becoming a financial burden for hospitals, giving more hospitals the incentive to divest these services. Moreover, many hospitals had already chosen to outsource their pharmacy management to pharmaceutical wholesalers.

This is a fiercely competitive market. Whether it is the entry ticket for pharmacy trusteeship services or the subsequent issue of pharmacy inventory, these factors may once again push JiuYi160 back into a cash-burning mode. Its advantage, undoubtedly, lies in its partnerships with thousands of hospitals and its user traffic of over 100 million patients seeking medical care.