Yunsheng Medical Signs PPP Agreement with Lishui Health Commission to Build Population Health Information System
On January 4, Winshare Medical announced that its project company, Lishui Winshare Population Health Information Technology Co., Ltd. (hereinafter referred to as “Lishui Winshare” or the “Project Company”), had been officially registered and established. Lishui Winshare signed the “Lishui City Population Health Informatization PPP Project Agreement” with the Lishui Municipal Health and Family Planning Commission (hereinafter referred to as the “Lishui HFPC”) on December 31, 2015.
Equity Structure of the Project Company
On December 9, 2015, Yunsheng Medical and the Lishui Municipal Health and Family Planning Commission determined, through competitive consultation, that the Company would serve as the social capital partner for the project. Yunsheng Medical will jointly establish a project company with Lishui Urban Construction Investment Co., Ltd. (hereinafter referred to as “Lishui Chengtou”) to implement the Lishui Population Informationization Project under the operational model of “integrated project investment, development, and operation + government purchase of services.” The registered capital of the project company is RMB 70 million, with Yunsheng Medical making a one-time capital contribution of RMB 56 million, accounting for 80% of the registered capital, and Lishui Chengtou contributing RMB 14 million, accounting for 20% of the registered capital.
Responsibilities and Authorities of the Project Company
The announcement indicates that the scope of the Lishui Population Health Informatics Project covers the information systems and supporting infrastructure of all medical and health service and management institutions within the Lishui area.
The Lishui Municipal Government has decided to implement the Lishui Population Health Informatics PPP Project using a Public-Private Partnership (PPP) model based on Build-Operate-Transfer (BOT). This initiative aims to achieve data collection, exchange, and sharing among various medical business systems within Lishui City, relevant departmental data centers, and the Provincial Population Health Information Platform. The project seeks to enable continuously accessible health services, smart and efficient medical care, refined and visualized hospital management, as well as scientific health administration and decision support.
The Lishui Municipal Health and Family Planning Commission has approved the granting of a franchise to the project company to finance, design, construct, operate, and maintain the Lishui Population Health Informatization Project, providing services such as project investment, development, and operation. Upon expiration of the franchise term, the project facilities shall be transferred free of charge and in good working condition to the Lishui Municipal Health and Family Planning Commission or an institution designated by the Lishui Municipal People’s Government, with a guarantee of their normal operation.
Scope of Franchise Rights
In accordance with the provisions of the agreement and upon approval by the Lishui Municipal People's Government, the Lishui Municipal Health and Family Planning Commission has granted Lishui Yunscheng the exclusive right to invest, finance, design, construct, operate, maintain, and transfer the project during the concession period. The specific scope of the franchise rights includes:
Construction, operation, and maintenance of the private network for population health information, the cloud platform for population health information, the population health data center (excluding data resources), and the information security assurance system.
Construction, upgrading, operation, and maintenance of systems including the primary healthcare information system; regional collaborative systems for laboratory testing, medical imaging, electrocardiography, and pathology; hospital information systems; public health service information systems; drug management information systems; comprehensive health and family planning management information systems; and family planning service information systems.
Resident Health Service Platform, Tiered Diagnosis and Treatment and Two-Way Referral System, Personalized Health Management Information Services, Health and Elderly Care Information Services, Telemedicine, and the Construction, Operation, and Maintenance of Online Hospitals.
Under the premise of ensuring data security and resident privacy, operational projects targeting residents and third-party institutions will be developed based on the population health information platform. The government will not bear the associated costs but will participate in equity sharing and profit distribution. Examples include the promotion of smart service packages for residents, pharmaceutical e-commerce delivery, online hospital operations, insurance cost-control services, leasing of platforms to private hospitals, health big data services, third-party laboratory and diagnostic testing, remote ECG diagnosis services, and online payment settlement. New projects will be subject to separate negotiations.
Should the government introduce data openness policies in the future, the project company may, with government authorization and under the premise of ensuring information security and personal privacy, carry out cloud computing-based big data application demonstrations, thereby further securing the rights to the comprehensive development of population health information.
Obtain the government procurement service fees provided by the Lishui Municipal Government for this project;
Upon expiration of the concession period, Lishui Yunsheng shall transfer the project facilities to the Lishui Municipal Health and Family Planning Commission or an institution designated by the Lishui Municipal People’s Government, without any compensation, in accordance with the provisions of the Agreement. The concession period for this Project runs from December 31, 2015, to December 31, 2025. The concession period under the Agreement consists of a construction period and an operation period, wherein the construction period commences on the effective date of the Agreement and ends on December 31, 2017 (the Completion Date), and the operation period commences on the date when the first phase of the Project passes acceptance inspection and ends on the last day of the concession period.
Government-Paid Service Purchase Fees
The annual government payment for service procurement amounts to RMB 1.767 million. The Lishui Municipal Health and Family Planning Commission shall incorporate the government payments for this project into the multi-year municipal fiscal budget. The government party shall, in accordance with the provisions of the PPP project agreement, pay the service fees to Lishui Yunsheng in a timely and full manner.
Yunsheng Medical and Wenzhou Health and Family Planning Commission's PPPMode
This is not the first time that Winshen Medical has operated under the PPP model. On July 8, 2015, Winshen Medical signed the “Wenzhou ‘Health Cloud+’ Project Framework Cooperation Agreement” with the Wenzhou Municipal Health and Family Planning Commission.
Wenzhou’s “Health Cloud+” project is expected to require an investment of RMB 480 million and will take two years to complete. The project adopts a public-private partnership (PPP) model, under which the contracting parties will jointly establish an operating entity to manage and advance its implementation.
The project’s construction scope primarily encompasses four key areas: First, upgrading and modernizing healthcare information systems in the Wenzhou region to establish a robust service foundation. Second, planning and launching “Smart Health Service Packages,” which involve the large-scale deployment of monitoring devices to primary care institutions and individual households, along with the development of a health cloud platform portal. Third, establishing various service channels linking primary care institutions with major hospitals to facilitate their active participation in cloud-based medical services, thereby building a comprehensive healthcare ecosystem. Fourth, setting up training bases for family doctors to enhance the service capabilities of primary healthcare personnel through diverse training programs.
The project adheres to the principle of inclusive, low-margin operations, with a plan to recoup construction investments over ten years.
About Winshang Medical
Yunsheng Medical previously focused on real estate as its core business. There are two typical real estate companies that have transitioned into healthcare services: Yunsheng Medical and Yihua Health. Yihua Health achieved a rapid transformation by acquiring a medical logistics service group and taking equity stakes in online hospitals.
Yunsheng Medical also rapidly transformed into the healthcare services sector through a series of investments and mergers and acquisitions. Its strategic layout primarily encompasses the following aspects:
In September 2014, the company acquired a controlling stake in Rongda Information, a regional healthcare IT firm. In February 2015, it acquired Medix, an ECG network informatics company for hospitals, thereby deepening its involvement in hospital-side ECG network informatization. In May 2015, the company took a controlling interest in Jianzi Technology to enter the market for personal ECG network informatics devices; in the same month, it established a health industry M&A fund to venture into healthcare investment.