Wang Bin of Peking University Rehabilitation Hospital: Analyzing Three Major Barriers and Three Key Success Factors in China's Rehabilitation Market

“All barriers and difficulties can be overcome, and an asset-light model poses no problem at all. The most important thing is that everyone builds on a foundation of cooperation to create more opportunities.”

——Wang Bin

On Thursday, April 28, 2016, the Asset-Light Elderly Care Venture Capital and Investment Trends Forum, hosted by VCBeat, was held on the third floor of Yinfeng Building, Suzhou Street, Zhongguancun, Haidian District, Beijing. This forum centered around the release by VCBeat Institute of“Global Trends Report on Asset-Light Entrepreneurial Investment in Elderly Care” (2016)Report: A Closed-Door Salon on Venture Capital and Investment in the Asset-Light Elderly Care Sector. The primary objective is to help startups in the asset-light elderly care sector gain a better understanding of the latest domestic and international trends in venture capital and investment, thereby facilitating more effective alignment and collaboration between startups, as well as between startups and the capital market.

Wu Danxing, an expert in China’s elderly care industry; Wang Bin, Executive Dean of Peking University Medical Rehabilitation Hospital; Qin Xinyan, Chief Medical Officer of Beijing United Family Healthcare Satellite Clinics and Home Healthcare; Zhao Junchao, Venture Partner at Tongdu Capital; Qiao Jiying, Investment Director at BlueRun Ventures; and Du Wei, Vice President of NATAL China, all attended the event and delivered keynote speeches.

VCBeat will summarize the event content, and the highlights of Wang Bin’s speech, Executive Dean of Peking University Medical Rehabilitation Hospital, are compiled as follows:

Wang Bin

Administrative Dean of Peking University Medical Rehabilitation Hospital

Weak patient awareness of rehabilitation, a scarcity of rehabilitation therapists, and differing consumer mindsets are the three major barriers currently facing the rehabilitation market.

Many estimates place the current domestic market size at RMB 100 billion, while that of developed countries stands at RMB 600 billion. These figures merely reflect the existing market potential. The critical issue is that we are actually facing a significant dilemma. In the elderly care sector, more than half of the investments remain vacant—is this not a clear sign of distress? The rehabilitation sector is similarly mired in difficulties; despite substantial demand across China, rehabilitation hospitals are failing to generate profits. Why? The key lies in understanding how to effectively participate in the rehabilitation and elderly care sectors.

The first issue that needs to be addressed is what is known as patient awareness—among patients, or more broadly, the general public—which constitutes a significant challenge.To Capture the Market, You Must First Capture Patient Awareness. The current generation, which is beginning to prioritize quality of life and possesses a certain economic foundation, still has a very limited understanding of elderly care and rehabilitation models.

Another critical factor is the availability of truly professional talent dedicated to the elderly care industry. As Professor Wu just mentioned, we are learning from Australia’s educational model, which represents a century of accumulated experience. In contrast, China has had formal rehabilitation education for only about a decade, resulting in a significant talent gap. Japan currently has approximately 140,000 rehabilitation therapists serving a population of over 100 million, whereas China has only 120,000 rehabilitation therapists for a population of 1.3 billion—a stark and somewhat absurd disparity. Our target is to reach 300,000 therapists. However, even with accelerated training programs, it takes several years to cultivate a qualified therapist, much like meticulously carving tofu one piece at a time; this process inevitably requires considerable time.

The last one is toPatients in general hospitals and those in rehabilitation hospitals differ in their psychological profiles, as well as in their consumer behavior.When a patient is told at the hospital, “Pay one million yuan, and I can save your life,” they immediately agree. Yet at a rehabilitation hospital, when told, “Pay 50,000 yuan, and I’ll help you walk again,” they bargain, asking, “Can it be done for 30,000?” Their expectations differ. Although the service provided may be equivalent or even superior, it fails to achieve the same level of consumer acceptance.

Systems, Teams, and Protocols: Three Key Pillars Constructing the Business Model of Rehabilitation Hospitals

What Is the Key to a True Business Model? There Are Truly Three Questions.

The first question: When engaging in rehabilitation or nursing care, it is best to have a systematic framework or, in other words, your own network of connections. A significant advantage we possess in operating rehabilitation hospitals is our team, which has extensive experience interacting with resources at all levels of the healthcare industry. Furthermore, we maintain close ties with numerous physicians, leading experts, and even independent physician groups. To succeed in rehabilitation or elderly care, one must establish their own network. If you lack substantial resources, it is advisable to first gain a thorough understanding of the landscape, as strong relationships are essential for achieving success.

The second issue is that downstream exploration of integrated medical and elderly care models may face a significant shortage of human resources. Many people have approached me, expressing their interest in opening rehabilitation hospitals, rehabilitation clinics, or similar institutions. My response is always, “Have you secured therapists?” Currently, there are various models for talent collaboration, such as multi-site practice. This constitutes the second key element of the business model: a high-quality team is essential to enable subsequent operations.

The third issue is that few people truly understand what it really takes to operate a hospital. Whether it’s a rehabilitation hospital or an elderly care facility, managing various sudden emergencies among patients, training physicians, and meeting medical record documentation requirements are all critical components of the business model. These elements must be addressed upfront; assuming they can be dealt with after launching the startup is simply not feasible.

Therefore, three key points are discussed.First, there must be a robust system or relevant framework; second, a relatively well-prepared talent team is required; third, hospitals must be operated in strict accordance with medical principles.

 

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