Yunzhongyi: Embracing the Boom of TCM Clinics with SaaS
The current predicament of Traditional Chinese Medicine (TCM) is rather awkward: supporters regard it as a matter of faith, while detractors dismiss it as superstition. However, this clash of values has not hindered TCM from experiencing a resurgence in the internet era. In particular, since the beginning of this year, the state has enacted multiple policies and regulations to promote the development of TCM, suggesting that its revitalization is no longer merely a rhetorical exercise.
Thus, how to strategically enter the “TCM + Internet” space has become a critical question. Cloud TCM, based in Suzhou, has chosen to leverage SaaS to prepare for the anticipated boom in TCM clinics and the broader TCM market in the coming years.
The Number of Traditional Chinese Medicine Clinics Is Set to Surge
According to the “2014 Statistical Bulletin on the Development of Health and Family Planning in China” released by the National Health and Family Planning Commission in November 2015, there were 419,000 licensed (assistant) physicians in the category of traditional Chinese medicine (TCM) in China by the end of 2014. However, industry insiders told VCBeat that the actual number of TCM practitioners qualified for and capable of conducting independent consultations may be only in the low hundreds of thousands.
The Outline of the Strategic Plan for the Development of Traditional Chinese Medicine (2016–2030), released in February this year, is expected to alleviate bottlenecks in the supply of TCM practitioners and the establishment of TCM clinics. Regarding the supply of TCM practitioners, the Outline proposes reforming the qualification access, scope of practice, and practice management systems for TCM medical personnel, and exploring classified management based on professional skills. With respect to clinic establishment, the Outline states that a filing-based management system will be implemented in accordance with the law for TCM clinics, and individuals holding rural doctor practice certificates who possess specialized TCM skills will be permitted to open TCM clinics in townships and villages.
He Xuefeng, founder and CEO of Yunzhongyi (Cloud TCM), told VCBeat that he chose to launch a SaaS startup because he anticipated explosive growth in the number of TCM clinics over the next few years. Compared with Western medicine clinics, TCM clinics have significantly lower setup costs; the main bottlenecks limiting their numbers are clinic approval policies and a shortage of physicians. He Xuefeng predicts that, as policies are progressively implemented, the number of TCM clinics could increase two- to threefold in the coming years.
Cloud TCM: Intelligent Operational Solutions for TCM Clinics
Choosing a SaaS solution for traditional Chinese medicine (TCM) clinics is a challenging path. Unlike Western medicine SaaS, which benefits from numerous hospital information systems (HIS) and established standards for reference, the development of TCM clinic SaaS must start entirely from scratch.
He Xuefeng stated that the majority of traditional Chinese medicine (TCM) clinics still operate in a manner reminiscent of 200 years ago, with extremely low levels of informatization. The few TCM clinics that do utilize information software have typically adapted Western medicine Hospital Information Systems (HIS), adding or modifying features as needed. However, these systems are not well-aligned with the unique workflows of TCM clinics and come with prohibitive costs, making them unaffordable for most ordinary clinics.
He Xuefeng decided to start with the most fundamental tasks: standardizing TCM terminology and streamlining TCM diagnosis and treatment processes. For instance, he extracted high-frequency terms from historical medical texts and case records to build a standardized character database, serving as the foundation for the entire TCM SaaS system. He also developed a process management system tailored specifically to TCM clinical workflows, fully integrating it with internet-era operational management systems such as online appointment scheduling, multi-channel payment processing, and pharmacy inventory management.
The current main features of Cloud TCM include:
Flexible Business Management Configuration: Cloud TCM enables clinics to independently define physicians' consultation cycles, time slots, start and end times, and appointment intervals; automatically generate appointment scheduling times and queue numbers based on consultation schedules; offer multiple payment channels including cash, UnionPay, stored-value cards, and insurance; and allow flexible configuration of fee items with customizable rules for registration fees, dispensing fees, and other charges.
Physician Workstation: An electronic medical record system tailored to the clinical workflow of TCM practitioners, featuring over 500 pre-loaded common herbal formulas with linked sources and relevant textual references for rapid prescription. Physicians can also manage their consultation schedules, patients, and medical records.
Visit Process Control: Cloud TCM enables end-to-end management of the entire patient journey, including appointment scheduling, registration, consultation, pricing, payment, treatment, and medication dispensing. Pharmacy and billing documents are automatically circulated electronically across counter terminals, physician workstations, and pharmacy workstations. Precise control over patient appointment and consultation times significantly enhances the clinic’s patient throughput capacity.
Pharmacy Management: Supports inventory management (procurement, sales, and stock) for herbal decoction pieces, proprietary Chinese medicines, and in-house preparations, along with end-to-end control of dispensing, decocting, and contract processing. It also features functions such as inbound/outbound documentation management, stocktaking, inventory threshold alerts, and automated electronic prescription routing.
Help clinics create WeChat Service Accounts: Yun Zhongyi assists clinics in setting up WeChat Service Accounts, providing patients with convenient features for physician lookup, appointment scheduling, registration, and communication functions such as pre-consultation inquiries and post-consultation feedback.
User Membership System: Cloud TCM helps clinics establish a user-oriented prepaid consumption system with flexible discount management features. The WeChat Service Account created by Cloud TCM allows users to recharge, check balances, and view transaction records.
Reports and Business Analytics: Cloud TCM SaaS features comprehensive business analytics capabilities, including integrated operational analysis, patient analysis, physician diagnosis and treatment analysis, and prescription and herbal slice analysis.
He Xuefeng stated that the goal of Yunzhongyi (Cloud TCM) is to provide intelligent operational solutions for rapidly growing Traditional Chinese Medicine (TCM) clinics. In addition to SaaS services, Yunzhongyi will supply clinics with various hardware components required for these solutions, such as registration kiosks, electronic queue display screens, and medication dispensing terminals. The Yunzhongyi SaaS platform will maintain a free-of-charge strategy; while hardware sales will generate some revenue, they will not constitute the primary income source for Yunzhongyi.
He Xuefeng believes that as long as one’s actions are helpful to the public and beneficial to the industry, persistence will inevitably yield rewards. With the rapid growth of the entire traditional Chinese medicine (TCM) clinic market, profit opportunities will be ubiquitous.
Target: Cover 5,000 clinics by year-end
He Xuefeng introduced that since its establishment over a year ago, Yunzhongyi has primarily devoted its time to product development and refinement. With more than a year of meticulous polishing and enthusiastic feedback from clinic users, He Xuefeng believes it is time to make a strong push in the market.
Currently, over 700 clinics are registered on Yunzhongyi, with more than 200 actively using the platform. He Xuefeng is confident that these figures will reach 5,000 and 3,000, respectively, by the end of this year.
He Xuefeng’s confidence stems from the recognition and support of his partner team and the traditional Chinese medicine (TCM) industry. Among his partners are Li Shu’en, an industry informatization expert with over a decade of experience in financial and telecommunications system integration; Tian Wenrong, who boasts successful marketing and entrepreneurial track records in the music and gaming sectors; and Wang Su, who has achieved notable success in medical device sales. This “iron triangle” combination, encompassing technical expertise, market acumen, and operational capabilities, constitutes a powerhouse lineup for a startup.
He Xuefeng’s entrepreneurial venture has also received robust support from the traditional Chinese medicine (TCM) industry. This support is manifested not only in verbal encouragement and active operational cooperation, but also in capital-level collaborations. In 2015, Xu Wenbing, a renowned TCM expert and head of Houpu TCM Academy, and Li Yongming, founder of Danggui TCM Academy, jointly invested in Yun Zhongyi. Additionally, Yun Zhongyi initiated an equity crowdfunding campaign and established capital-level partnerships with well-known TCM clinics such as Beijing Pingxintang, Kongyitang, Yuyuantang, Bo’ai Tang, Xingzhitang, and Houpu TCM, with the aim of building Yun Zhongyi into an open service platform for the TCM industry.
Looking further into the future, He Xuefeng is not concerned about issues such as when profitability will be achieved or how the business model will be validated, as these challenges will be readily resolved with the explosive growth of the traditional Chinese medicine (TCM) market. His ultimate goal is to revitalize the ancient practice of TCM in the internet era, enabling more people to benefit from it and ensuring that this discipline truly serves the well-being of the Chinese people.
It is reported that Yunzhongyi is currently undergoing Series A financing. Friends interested in entrepreneurship in traditional Chinese medicine (TCM) are welcome to add WeChat ID yeyurenlei to join VCBeat in following and discussing the future of "TCM + Internet."