Mobile Health's New Frontier: Surging Demand for Overseas Medical Services Shifts from Luxury to Mass Market

Source: Yicai Daily

Wei Zexi, aged 21, died of synovial sarcoma. If Wei Zexi’s parents had been wealthy enough to take him to a cancer treatment center in the United States for medical care, would he have had a chance of survival?

Industry insiders state that the average cost for cancer patients seeking medical treatment in the United States is $150,000. Despite the high expense, traveling to developed countries in Europe and America for medical care has long been a choice for many high-net-worth individuals, who also seek non-disease-related services such as cosmetic surgery in South Korea, in vitro fertilization (IVF) in Thailand, and premium health check-ups in Japan.

Nowadays, mobile health platforms are leveraging their internet advantages to usher overseas medical treatment into a new era.

A Yicai reporter has found that, over the past year, in addition to traditional intermediary service agencies, some mobile health platforms have emerged as new contenders in the overseas healthcare sector, with platforms such as Chunyu International, Jiuyi 160, and Haodf Online successively entering the international medical market.

The keyword for mobile health in 2016 was the exploration of diversified revenue models. Can mobile health platforms establish viable revenue streams through international medical services? What are the specific operational strategies adopted by various mobile health companies? Could the overseas medical treatment market consequently evolve from a high-end consumer niche to a more accessible, mass-market offering?

The number of Chinese patients seeking medical treatment abroad in the fourth quarter of 2015 tripled compared to the beginning of 2015.

On March 1 this year, Jiuyi 160, an online healthcare service platform, officially launched its International Medical Platform. At inception, it introduced three categories of services: plastic surgery and cosmetic procedures in South Korea, precision health screenings in Japan, and critical care treatment in the United States, partnering with more than 60 renowned hospitals worldwide. Recently, it has also added in vitro fertilization (IVF) services in Thailand.

Another mobile health company, Chunyu Doctor, entered the international healthcare market even earlier. On July 22, 2015, Chunyu International Healthcare was officially launched, with services covering overseas medical treatment, assisted reproduction, and overseas health checkups.

“A small base and rapid growth are characteristic of cross-border medical treatment,” analyzed Tang Heng, Executive Partner at GTJA Investment Group. Due to limited domestic medical resources, gaps in equipment and technological standards, and concerns over drug safety, cross-border medical care is increasingly favored by affluent individuals. In 2011, only 3% of the wealthy population was aware of seeking medical treatment overseas; by 2015, this figure had reached 40%. The number of Chinese patients traveling abroad for medical care in the fourth quarter of 2015 tripled compared to the beginning of that year.

Domestic mobile health platforms have also recognized the demand and growth potential of cross-border medical services. Luo Ningzheng, CEO of Jiuyi 160, stated that the platform’s data reveals patients’ referral needs, with some patients seeking care across hospitals in Shenzhen, or even traveling to Beijing and Shanghai for treatment. Meanwhile, international medical resources serve as a valuable supplement to domestic offerings. Europe and the United States hold advantages in oncology treatment, cardiology, and premium health screenings, where domestic demand is strong. For instance, the number of Chinese patients traveling to the U.S. for oncology treatment has grown several-fold in recent years.

Overseas medical care, as a form of high-end healthcare, has undergone three stages of development. According to a report by Analysys International, the period from 2000 to 2010 was the initial exploratory phase of overseas medical care, during which a very small number of patients, driven solely by treatment needs, spontaneously sought medical attention abroad. From 2011 to 2014, club-style overseas medical service providers emerged, such as Shengnuo Yijia and Houpu Fangzhou, attracting high-spending clients by offering customized overseas medical tourism services. Since 2014, overseas medical care has entered a platform-based development stage, with mobile health institutions facilitating communication between domestic and foreign medical facilities through platform strategies.

Li Jia, Senior Investment Manager at Co-Stone Capital, stated that there are estimated to be over a thousand companies in China engaged in cross-border medical services, most of which operate as intermediaries with varying levels of quality.

Undoubtedly, the intervention of mobile health platforms offers unique advantages. Jiang Xinwei, Research Director at the Healthcare Industry Center of Analysys International, stated that mobile health platforms have reshaped the original product pricing structure and information dissemination channels. By leveraging internet-based approaches, these platforms have reduced customer acquisition and channel costs, bringing cross-border medical services to a broader demographic of middle- and high-income young people, while attempting to replace the previously dominant user base consisting primarily of high-end clients born before 1975. Therefore, mobile health presents three key advantages: relatively low market (customer acquisition) costs; competitive market channel costs by leveraging established brands; and significantly improved operational costs and efficiency through internet-enabled methods.

Tang Heng also believes that mobile healthcare platforms offer distinct advantages, enabling the transmission of electronic medical records, remote consultations with international experts, and the delivery of remote treatment plans. Mobile healthcare can facilitate the alignment and integration of resources between patients and medical institutions, resulting in more precise matching, greater price transparency, and more reliable services, while also offering a cost advantage over traditional methods.

Advantages and Risks Coexist

What Strategies Are Mobile Health Companies Using to Expand into Overseas Medical Markets? As an investor who has been closely following the mobile health sector, Tang Hengxiang analyzed the current business models for cross-border medical services offered by general mobile health platforms. The first model involves building a platform that allows overseas medical institutions to list their services, with the platform acting as a primary wholesaler. The second model entails integrating overseas medical resources to provide patients with one-stop services, thereby generating corresponding profits. Unlike mobile health solutions targeting domestic medical care, overseas medical services cater to mid-to-high-end clients who prioritize service quality and are relatively price-insensitive, resulting in considerable profit potential.

Luo Ningzheng stated that JiuYi160 adopts a model combining “direct connection” with hospitals and overseas service providers, collaborating directly with relevant foreign government departments to secure authorization from legitimate hospitals. Users who are fluent in foreign languages and capable of living independently abroad can choose to make appointments directly with overseas medical institutions via the JiuYi160 official website. For users requiring more comprehensive on-the-ground and personalized services, they may select local service providers based on their financial capacity. Meanwhile, JiuYi160’s call center monitors user status throughout the entire process and continuously evaluates the performance of service providers.

In this process, selecting which hospitals to partner with is crucial. Luo Ningzheng stated that they prioritize destinations popular among Chinese travelers and emphasize rigorous credential verification when choosing hospitals, including checking for medical malpractice incidents, local hospital rankings, and relevant surveys across different regions.

Currently, the international medical services offered by mobile health platforms are largely similar, focusing on areas with high demand among Chinese patients. These services primarily cover major diseases such as cancer and cardiovascular conditions, as well as assisted reproduction (IVF), medical aesthetics and anti-aging treatments, and overseas health check-ups. In addition, Spring Rain International provides consultations with renowned overseas physicians, supported by technologies such as remote second opinions.

Unfamiliarity with the local environment is a significant challenge, especially when seeking medical treatment overseas. The market is indeed rife with chaos and irregularities. For instance, patients traveling to South Korea for plastic surgery often find themselves approached by numerous individuals requesting to add them on WeChat, or swarmed by small-scale intermediaries, immediately upon checking into their hotels after landing. It is very common for these intermediaries to receive kickbacks from hospitals.

The advantage of mobile healthcare lies in leveraging the Internet to make intermediary services transparent. Luo Ningzheng stated that patients settle accounts directly and independently with international medical institutions, and the service intermediary fees are also highly transparent. On-the-ground services in different countries have varying pricing standards; translation, vehicle coordination, and accommodation needs—all products have clearly defined prices.

Opportunities and Risks Coexist. Experts believe that mobile health platforms venturing into the cross-border healthcare sector also face certain risks.

Tang Heng stated that at the level of policy and regulation, national policies, laws, and regulations vary from country to country. China currently lacks specific laws and regulations governing international medical services, so platforms must remain vigilant against the risks posed by policy changes in various governments. Secondly, regarding cross-border doctor-patient disputes, since overseas medical treatments mostly target severe and complex conditions, the inherent individual variability and risks associated with medical care mean that any cross-border disputes will significantly increase the cost and difficulty of evidence collection. Meanwhile, the entry barriers for cross-border medical treatment are low; any travel agency qualified for outbound tourism can engage in medical tourism. The transformation of traditional intermediaries into mobile and overseas healthcare providers will lead to industry chaos and excessive competition.

Li Jianing stated that regarding quality management risks, patients generally lack understanding of overseas medical institutions, leading to information asymmetry and language barriers. If mobile health platforms participate without exercising overall control over medical services and providing standardized, secure processes, the quality of care for patients seeking treatment abroad cannot be guaranteed. In terms of legal risks, some patients with serious conditions have an urgent need for overseas medical care, seeking drugs and treatments unavailable domestically; for instance, new drugs are launched earlier in the United States than in China, and India offers many affordable generic anticancer drugs due to compulsory patent licensing. However, if cross-border healthcare platforms engage in the purchasing and sales of such medications on behalf of patients, non-personal use makes lawful customs declaration difficult, thereby posing legal risks.

How to Mitigate Risks Arising from Medical Disputes? Liu Qichao, Vice President and Head of International Healthcare at 160.com, stated that as a service provider, the platform does not engage in specific medical practices; instead, it assists patients in resolving issues more effectively should problems arise during their medical consultations.

It is reported that Spring Rain Doctor is preparing to launch offline clinics, which will serve as the physical and video consultation hubs for Spring Rain International Medical Care, as well as the entry point for introducing foreign doctors into China.

In this regard, Jiang Xinwei analyzes that patient safety is a critical consideration for all overseas healthcare providers. Currently, most institutions focus on lower-risk services such as medical referrals, as establishing their own offline medical facilities entails relatively higher safety risks.

Overseas Medical Care: A New Profit Center?

Undoubtedly, the expansion of mobile healthcare into overseas medical markets is still in its nascent stage.

“When describing the international healthcare vision of JiuYi160, Liu Qichao stated, ‘While Chinese people can book hotels through Booking.com, booking hospital appointments remains difficult. The vision behind JiuYi160’s launch of international medical services is to enable Chinese patients to book hospital appointments online at any time.’”

Liu Qichao’s team aims to enable appointment booking at hospitals in developed countries within three years, while also serving foreigners residing in China, thereby transforming Health 160 into an international medical platform and achieving profitability in international healthcare services.

Spring Rain International has publicly announced its plan to pursue an independent initial public offering (IPO). The company’s valuation has approached RMB 100 million, having secured RMB 15 million in Series A funding from Chunfeng Venture Capital, an investment arm under Spring Rain Doctor. Reports indicate that Spring Rain Doctor is currently seeking Series B financing.

So, will expanding into the overseas healthcare market become one of the profit models for mobile health? Professionals hold differing views.

Li Jianing stated that the international expansion of mobile healthcare platforms represents one avenue for exploring profitability. There remain numerous new frontiers to develop in the future, such as reverse patient flows in cross-border medical care, which could facilitate the referral of U.S. patients to China for treatment, thereby reducing healthcare expenditures.

Jiang Xinwei, however, believes that cross-border healthcare is a niche market and will not become the primary revenue stream for mobile health. The main focus of mobile health remains on the domestic market, actively participating in the transformation of existing medical care processes, striving to become an effective tool or key future participant in public hospitals, as well as an effective supplement to social healthcare.

Tang Heng’s view is that, as the overseas healthcare market remains relatively niche and is still in the phase of market layout, most companies have not yet achieved profitability. However, with the gradual expansion of the market, innovation in business models, and enhancement of core competitiveness (competitive barriers), profitability is expected to be realized.

Tang Hengtong also revealed that GTJA is currently making strategic investments in mobile health projects with unique innovative business models and core competencies.

For ordinary consumers, the hope is that the involvement of mobile health can appropriately lower the barriers and costs of seeking medical treatment abroad, making it accessible to a broader population. Li Jianing stated that the average cost for cancer patients seeking treatment in the United States is $150,000. The transition from high-end consumption to the mass market requires, on one hand, expanding the range of covered conditions, such as extending into the field of chronic diseases. On the other hand, it necessitates strengthening cooperation with international insurance companies to enhance bargaining power with overseas hospitals. Furthermore, the participation of mobile health platforms helps systematize and increase the transparency of cross-border healthcare, reduce intermediary costs, and facilitate the expansion of cross-border medical services to the general public.

“If medical insurance and commercial insurance can provide effective coverage, it will create opportunities in the general market. At present, the only potential entry point into the general market is remote consultations during the early stages of cross-border healthcare,” said Tang Heng.