OrthoGuard Files IPO Prospectus: Aiming to Become a Leading Innovative Orthopedic Medical Group in China

Li Gang, Co-founder of Bone Guardian Medical Group

With the advancement of China's tiered diagnosis and treatment policy and the policy allowing physicians to practice at multiple institutions,“Physician Groups” have emerged as a new model of medical service delivery. The advent of physician groups has played a significant role in advancing supply-side reforms in healthcare, implementing tiered diagnosis and treatment, and alleviating the difficulty of accessing medical care.

In 1998, Wan Feng established China’s first nominal physician group. In 2014, the Zhang Qiang Physician Group was founded, followed by the establishment of other physician groups such as Dajia Medical Alliance, Donglei Brain Specialist Physician Group, and Woyi Gynecology and Obstetrics Renowned Physicians Group. As an emerging force in the healthcare industry that cannot be overlooked, physician groups have attracted attention from both the medical and investment sectors. Recently, with “Bone Guardian Physician Group” being named one of China’s Annual Outstanding Innovative Enterprises, another physician group has come into the public spotlight, drawing widespread attention.

It is understood that, to date, the Guweishi Doctor Group has signed contracts with more than 200 orthopedic experts across China and has established partnerships with nine hospitals.

Within a Year, Bone Guardian Physician Group Has Garnered Recognition from Numerous Renowned Orthopedic Experts: What Is Its Appeal?VCBeat (WeChat ID:VCBeat obtained the answer during an interview with Li Gang, co-founder, director, and president of the Bone Guardian Physician Group.

In early November 2016, at the 18th floor of Jingtai Building in Beijing, our reporter met Mr. Li Gang, co-founder, director, and president of Bone Guardian Physician Group. According to Mr. Li, Huarui Century Group made strategic moves into the healthcare industry in 2014, and officially registered and established Bone Guardian Physician Group in 2016.

When discussing the rationale behind establishing a specialized orthopedic physician group, he noted, “Building a general practice physician group would require recruiting doctors from every department, resulting in an excessive workload and overly broad scope. The most prudent strategy is to concentrate resources on a single specialty. Among the various departments, we selected orthopedics based on thorough and professional market analysis.””Li Gang said.

First, from the perspective of the orthopedic surgeon market, the distribution of orthopedic resources is highly uneven, with a primary concentration in first-tier cities such as Beijing, Shanghai, and Guangzhou. Second, from the patient perspective, China’s aging society is accelerating; by 2020, the elderly population in China is projected to reach 240 million. Chronic non-communicable diseases pose the main threat to the elderly, including osteoporosis, fractures, cardiovascular and cerebrovascular diseases, diabetes, and cancer.

For chronic diseases or cancer, patients face significant challenges in achieving cures, accompanied by high treatment costs. In contrast, orthopedics offers a higher likelihood of recovery and lower mortality rates, leading to strong patient willingness to seek treatment; consequently, the market potential for orthopedic patients is substantial. Finally, from the hospital perspective, many institutions lack renowned specialists. If hospitals do not possess the capability to develop orthopedic disciplines and conduct related research, they will naturally fail to retain orthopedic talent. Therefore, there is immense market potential for hospital demand for orthopedic resources.

“Physician group resources include physician resources and collaborative resources. Physician resources are the core assets of a physician group, while collaborative resources serve as an accelerator for its development,” said Li Gang.

The saying “He who wins the doctors wins the market” underscores that physicians are the “core assets” and “core competitive advantage” of physician groups. Currently, high-level specialist physicians in China are primarily concentrated in fewer than 100 Grade A tertiary hospitals, indicating a high concentration of quality medical resources. In the field of orthopedics, there are approximately 83,000 professional orthopedic surgeons, among whom about 15,000 are capable of performing surgeries independently, while no more than 4,500 truly possess advanced surgical expertise.

How to Build a Strong Competitive Advantage in Physician Resources? Bone Guardian relies not only on generous and comprehensive compensation and benefits but also on its “3S” service philosophy—“Serving Patients, Serving Physicians, Serving Hospitals”—proposed since its inception. Li Gang aims to help physicians achieve transparent income, realize their professional aspirations, and enhance their professional value through Bone Guardian’s core values and the platform’s influence. Li Gang emphasizes that Bone Guardian consistently adheres to one of its key operational principles: building an alliance of physicians who share common values while possessing diverse outstanding qualities and medical expertise. Healthcare system reforms have created numerous opportunities for physicians. Under the traditional system, physicians’ income levels and the value of their skills and knowledge have not been fully reflected. Multi-site practice enables physician mobility, allowing them to truly realize the value of their technical expertise and labor through medical institutions outside the traditional public healthcare system.

Collaborative ResourcesCollaborative resources represent another key initiative undertaken by Bone Guardian to build its competitive advantages. As the saying goes, “Even a hero needs the support of others.” The development of Bone Guardian has never been an isolated endeavor. The company has long established medical consortium partnerships with numerous Grade A tertiary hospitals across China. Bone Guardian is a member unit of the Medical Consortium affiliated with Xijing Hospital of the Fourth Military Medical University, a founding council member of the Chinese Non-Public Medical Institutions Association, and the officially designated cooperative platform of the Bethune Medical Expert Committee. Furthermore, Bone Guardian has forged collaborations with three major international rehabilitation systems, including Kinetic Trend, GRS, and Dr. Sam Li. It has also secured an exclusive partnership in China with the University of Chicago Medicine Resource Center and established a strategic partnership with the Massachusetts International Group (USA). These domestic and international partners provide robust support to Bone Guardian in technological development, system construction, talent cultivation, and the establishment of green-channel access.

Meanwhile, Bone Guardian has established comprehensive strategic partnerships with numerous large domestic medical groups, insurance institutions, and health check-up organizations, and has formed cooperative alliances with major medical network platforms. Building on its collaborations with partners and affiliated hospitals, Bone Guardian proposed the “3C” business philosophy of “Collaboration, Coexistence, and Common Win,” which has gained widespread recognition and yielded practical results. Li Gang stated, “The Bone Guardian Physician Group is not merely a physician group; rather, it is an innovative medical industry group that integrates diagnostic and treatment services, hospital management, supply chain management, rehabilitation management, and education and training.”

“Physician groups that consist solely of physicians will either grow slowly or fail to take off entirely. It is like having a Mercedes-Benz engine but lacking the chassis and body structure,” said Li Gang.

The healthy and rapid development of Bone Guardian Medical Group is inextricably linked to its high-caliber, professional operations management team. The team comprises senior operations executives who previously served as vice presidents or higher at renowned Grade 3A hospitals in China, bringing years of practical experience in healthcare management. It also includes a cohort of innovative operational managers with extensive backgrounds in medical group operations, proven track records of managerial success, and strong adaptive learning capabilities. Furthermore, the group employs strategic investment professionals from investment firms and investment banks, who have successfully executed multiple projects. Team members are graduates of prestigious Chinese universities such as Tsinghua University, Peking University, Fudan University, and Zhejiang University, all possessing strong academic credentials.

In the first half of this year, financing deals involving physician groups have been frequently disclosed, creating a unique landscape amidst the capital winter. Despite the influx of various investors and the hype surrounding corporate investment, some market participants have merely followed trends. Furthermore, certain physician groups suffer from unclear positioning, which has compromised their independence and raised suspicions of manipulation by capital interests.

Industry insiders believe that while it is inevitable for physician groups to find their own positioning and introduce social capital, this should not come at the cost of influencing medical practices. In this context, whether a physician group has strong shareholder backing has also become a criterion for evaluating its comprehensive strength. As a member enterprise of Huarui Century Group, Guweishi possessed favorable foundational advantages from its inception.

“Many people do not understand physician groups; in reality, this is an industry with high entry barriers. A rush to enter inevitably leads to rapid exit as well,” said Li Gang. “Bone Guardian is a fortunate outlier. Huarui Century Group has provided comprehensive support for its development, with financial backing being just one component.”

Faced with numerous investment overtures, Li Gang has adopted a cautiously welcoming stance. “Guweishi will not pursue financing for its own sake. While achieving economic benefits, Guweishi’s development also takes into account social benefits. We are committed to driving innovative development in China’s healthcare industry, providing high-quality services to patients, physicians, and hospitals, offering more and better tiered diagnosis and treatment services to society, addressing the public’s difficulties in accessing medical care, supplementing and balancing supply and demand in the traditional healthcare market, and striving to build a leading domestic innovative healthcare industrial group.”