Yu Ying, 'Superwoman of the ER': Internet Hospitals Will Play an Increasingly Vital Role

In the past year or two, concepts such as internet hospitals, online hospitals, and cloud hospitals have emerged in rapid succession. Statistics show that there are already dozens of internet hospitals, with participating entities including internet healthcare companies, local government departments, healthcare IT enterprises, and offline physical hospitals. To date, there is no unified definition of an internet hospital. The continuous emergence of new concepts and terminology reflects, to some extent, the deepening and intensifying integration and penetration of the “Internet + Healthcare” model.

On November 26, at the iYiou Vertical Salon on Internet Hospitals, Yu Ying, known as the “Superwoman of the Emergency Department,” shared her perspectives and insights on internet hospitals. The following is a summary of her speech compiled by VCBeat (WeChat ID: vcbeat):

Today’s topic is “Internet Hospitals.” Investors, healthcare internet startups, many physicians from public hospitals, and even some individuals without medical backgrounds are all eager to jump into the fray and make a splash in this entrepreneurial wave.

So, in the current wave of internet entrepreneurship, particularly in healthcare startups, how can one position themselves for enduring success? This includes determining the future path for many hospitals and physician groups. In this process of exploration, everyone should collaborate and share resources, rather than operating in silos as doctors traditionally have.

Internet hospitals have suddenly exploded in popularity this year. As of the end of September 2016, a total of 30 internet hospitals had been established, with more than 20 founded in 2016 alone. Examples include Anshun Southwest Internet Hospital, South China Internet Hospital, and 39 Internet Hospital, all of which were established this year.

For internet hospitals, there is no clear definition from national agencies such as the National Health and Family Planning Commission (NHFPC) to the National Development and Reform Commission (NDRC). This concept originally evolved from telemedicine. As early as 2014, the NHFPC formulated policies explicitly stipulating that only institutions with medical institution qualifications could provide telemedicine services. After this policy was introduced, it significantly hindered many online healthcare providers. Subsequently, concepts such as internet hospitals, smart hospitals, and cloud hospitals emerged.Overall, the primary approach leverages the convenience of the internet to facilitate tiered diagnosis and treatment. In the remote consultation module, each company integrates features aligned with its own strengths and specific circumstances.

For instance, Haodf Online leverages its strengths in online physician resources and digital traffic. Many patients, such as those traveling from other cities to Beijing, Shanghai, or Guangzhou for medical care, turn to the Haodf website as their first step to identify specialists who precisely match their needs and conduct online consultations. It is a natural progression for Haodf, as a private healthcare provider, to operate as an internet hospital. Similarly, companies like Kingdee and Neusoft Xikang, which originally specialized in information systems, possess inherent advantages in IT architecture. These players leverage their respective strengths to enter the market, adopting diverse models for internet hospitals.

Outpatient visits are truly unprofitable, as seen in pediatrics.In pediatrics, a single consultation cannot involve the extensive use of medications, and such individual encounters are not profitable. Given the high operational costs of brick-and-mortar facilities—including rent and labor—the emergence and presence of internet hospitals are bound to change this landscape. By conducting large-scale screening, internet hospitals can establish robust triage systems, ultimately isolating what we refer to as high-value products. Precisely because substantial baseline traffic is required to identify these subsequent high-value offerings, internet hospitals are poised to eventually assume the functions of public hospitals, effectively breaking down the institutional barriers of traditional public healthcare. This represents an inevitable trend.

Internet hospitals can also enhance the quality of medical care in brick-and-mortar hospitals.In Guizhou and Ningxia, regions characterized by a scarcity of medical resources and suboptimal healthcare quality, the introduction of internet hospitals enables experts and professors from first-tier cities to establish a strong presence locally. By obtaining multi-site practice licenses across provinces and municipalities, these specialists can provide online medical services to the local population.

Internet hospitals are highly dependent on policy; without national policy support, they cannot be established.In August 2014, China’s first telemedicine policy stipulated that only medical institutions could conduct remote consultations. In August 2013, during a visit to Inner Mongolia, I observed that the local People’s Hospital had specially set up two consultation rooms for telemedicine, which remained empty. The hospital collaborated with the Medical Affairs Department of PLA General Hospital (301 Hospital), whereby Inner Mongolia would initiate online consultation requests and the latter would accept them. The registration fee for each consultation was RMB 800. This model proved inefficient. If a single medical institution initiates an application, it is uncertain when the counterpart physicians will be available online. Moreover, since the consultations were restricted to designated professors, efficiency was extremely low. Due to heavy reliance on policy support, this approach was unsustainable.

The so-called massive online diagnosis and treatment, including the prescriptions generated, was once attempted by Alibaba Health, which aimed to facilitate the circulation of pharmaceuticals on the Tmall platform but lacked physical fulfillment points. Now, certain self-built and contracted partnership models are being implemented under the internet hospital framework.

The National Health and Family Planning Commission’s Opinions on Promoting Telemedicine Services in Medical Institutions, issued on August 16, 2014, affirmed the importance of telemedicine. High-quality medical resources are concentrated in Beijing, Shanghai, and Guangzhou; however, highly skilled physicians are generally reluctant to relocate. Remote areas suffer from a scarcity of medical resources. While these regions may boast advanced hardware infrastructure, the professional competence of their medical staff often remains inadequate.

The National Development and Reform Commission (NDRC) quickly recognized the issue and, on January 25, 2015, issued the “Notice of the General Office of the National Development and Reform Commission and the General Office of the National Health and Family Planning Commission on Approving Policy Pilots for Telemedicine in Five Provinces and Autonomous Regions Including Ningxia and Yunnan.” By the end of 2016, Guizhou had already seen the emergence of six internet hospitals, while Ningxia had two. In contrast, Tibet, Inner Mongolia, Yunnan, and other provinces had not yet reported any publicly, indicating significant untapped potential.

The “Notice on Several Policy Measures to Promote the Accelerated Development of Socially Run Medical Institutions,” issued on June 11, 2015, which covers private clinics, maternal and child health hospitals, and private hospitals, resulted in a decrease of 380 public hospitals and an increase of 2,184 private hospitals by the end of June 2016. The “Guiding Opinions on Advancing the Construction of a Tiered Diagnosis and Treatment System,” released on September 8, 2015, shifted the management of chronic diseases to online platforms. While this model is sound, users are unwilling to pay for it. Genuine internet-based healthcare faces numerous challenges, one of which lies in the payment process.

Internet hospitals, primarily implemented through telemedicine, will play an increasingly significant role in the tiered diagnosis and treatment system.

By August 15, 2016, Guizhou had pioneered a one-year pilot program for internet hospitals, integrating them with the medical insurance system. The primary coverage scope included remote consultations—such as single-specialty and multi-specialty consultations—as well as remote laboratory testing, pathology, and imaging diagnostics. This development represented highly favorable news for healthcare institutions and enterprises establishing internet hospitals in Guizhou.

Hierarchical Diagnosis and Treatment Is Developing Online; Where Do General Practice Clinics and Chain Clinics Find Their Future Path? I Have a Prediction,While internet hospitals may see robust development in the future, the widespread proliferation of general practice clinics is not suitable for China due to prohibitively high costs.