Six Strategies for Building a Profitable Internet Healthcare Business Model: Insights from BCG Partner Barry Rosenberg

For healthcare technology companies, there is no one-size-fits-all solution for transforming their business models or enhancing commercial competitiveness. Barry Rosenberg, a partner at Boston Consulting Group (BCG), offers six recommendations to help these companies avoid common pitfalls and achieve profitability.



The Six-Step Guide to Building a Perfect Business Model

1. Develop marketing strategies

First, systematically analyze the market environment to identify the optimal market entry direction and formulate strategies to capture market gaps. Then, adjust the business model and execute the strategies. Throughout this process, corporate decision-makers are required to have a thorough and detailed understanding of all stakeholders involved, ranging from market managers to healthcare professionals.

2. Reshaping Clinical Sales

Medical technology companies need to place greater emphasis on clinical sales; meanwhile, they must also enhance their administrative sales capabilities to launch a new wave of managerial selling in a shifting market, while observing the transition in market decision-making authority. Only by adopting appropriate clinical marketing models can sufficient product revenue be achieved.

3. Establish Positive Partnerships with Key Clients

In the medical technology industry, key customers in the top 10% actually generate 50% of business transactions within certain existing product categories. However, many medtech companies demonstrate immature capabilities in managing these key accounts on a day-to-day basis, thereby missing valuable opportunities.

4. Build genuine marketing capabilities to drive the value of domestic products

Uncovering product value is, in fact, the most critical strategic direction for enterprises to pursue. However, at present, companies still devote their primary efforts to highlighting product performance features, rather than adopting value-based marketing strategies centered on product advantages—such as reducing healthcare costs, shortening hospital stays, or lowering readmission rates. Therefore, it is essential for enterprises to establish a new approach in their marketing focus.

5. Enhance After-Sales Service and Pricing Capabilities

Although after-sales service and pricing capabilities remain in their early stages for many enterprises, those that effectively implement after-sales support and pricing strategies ultimately gain a true competitive advantage. Companies that can demonstrate the economic value of their products and train local teams to strengthen after-sales operations typically see immediate improvements in after-sales decision-making and rapid revenue growth.

6. Service Diversification—Revenue Sources

As products become increasingly commoditized and diversified, high-quality service has emerged as a key competitive advantage for companies to differentiate themselves from peers, enabling them to outperform rivals in areas such as product supply, cost reduction, and generation of additional revenue. However, the reality is that many medtech companies lack innovation in delivering product-related services, merely imitating their competitors’ service models.

Winning in China’s Booming Healthcare Market

A few years ago, some predicted that China’s healthcare technology market would enter a period of rapid growth and become the second-largest globally by 2020. Over the next decade, healthcare technology companies should strategically prioritize the development of the Chinese market.

Multinational corporations and domestic enterprises should actively monitor the demands of the Chinese market, adjusting their product portfolios and sales strategies in real time. Furthermore, corporate products must begin to adapt to changes in the Chinese market, as regulatory standards and guidelines evolve rapidly in China; therefore, companies need to establish a swift and robust response mechanism.

Multinational corporations need to pay more attention to the mid-tier market beyond the high-end segment, addressing the needs of Chinese medical professionals and patients. Meanwhile, entering the mid-tier market should not come at the cost of maintaining leadership in the high-end market; that is, both segments should be balanced. All market participants in China must carefully manage government relations. Maintaining good communication with the government can help medtech companies better align with policy regulations regarding product registration, pricing, and eligibility.

Business Model Innovation in Internet Healthcare

Internet healthcare, by leveraging mobile apps and devices to deliver medical information, record and store data, and provide clinical services, is poised to fundamentally transform patient care. However, deeply ingrained behaviors formed over years between patients and physicians will hinder the development of internet healthcare. To enhance business model innovation, internet healthcare providers should consider the following practical approaches:

Aligns with the user's current behavioral habits

This requires enterprises to analyze the daily behaviors of patients and healthcare professionals. The purpose of introducing internet-based healthcare is to address potential pain points in the process, thereby proposing solutions. For healthcare professionals, the primary obstacle in their work lies in managing and analyzing large volumes of patient data. Internet healthcare solutions must be integrated into the daily workflows of medical staff; the more closely product design aligns with users’ existing behavioral habits, the higher the user acceptance will be.

Integrating Multiple Services into a Single Comprehensive Experience

Since users may interact with various internet-connected medical devices and apps across different platforms, integrating all services into a single, comprehensive platform—transitioning from a “must-have” app with multiple features to a hardware platform capable of connecting diverse modular and interoperable devices—enables healthcare professionals to develop a unified interface that consolidates comprehensive data from multiple channels.

Targeted Solution Design to Meet Evolving Customer Needs

Some shifts in customer behavior are inevitable—and will become particularly significant in the application of specific internet healthcare apps. As such, internet healthcare developers can provide targeted services to make the transition to digital healthcare as seamless as possible for users, thereby enhancing their experience. Providers of internet healthcare solutions, such as telecommunications companies, can enable physicians to manage large data streams while filtering out critical information. Pharmaceutical giants and health technology companies are also considering developing online devices to support remote diagnosis. The key lies in telecommunications companies, pharmaceutical giants, and health technology companies expanding their guiding roles across the entire value chain, while remaining compliant with policies and regulations.

Translation: Liu Jianqiu

Responsible Editor: Zhang Nan