Shen Farong, Master’s Supervisor, Recipient of the State Council Special Allowance, and Listed Physician in the Top 100 Famous Chinese Doctors.

President of Zhejiang Greentown Cardiovascular Hospital, Director of the Heart Center.

Standing Committee Member of the Cardiac Electrophysiology and Pacing Branch, Chinese Medical Association; Deputy Head of the Pacing Group; Vice Chairman of the Cardiovascular Disease Branch, Zhejiang Medical Association; Vice Chairman of the Cardiac Electrophysiology and Pacing Branch, Zhejiang Medical Association; Head of the Cardiac Pacing Group; Founder of Xingxiangyuan.

Key Insights from President Shen Farong:

1、 Medical+In the Internet era, hospital administrators lack data literacy, doctor-patient relations are strained, and diverse business models are emerging.

2、 Internet+The scarcity of high-quality physicians and low user stickiness make it extremely challenging to operate.

3、 The entire healthcare process involves doctors on one end and patients on the other; all tools provided aim to make this workflow more efficient, standardized, and orderly.

4、 Basic Definition of Physician Groups in China: First, they must be founded by physicians; second, they must comprise at least two physicians; and third, they must be substantive business entities.

5、 The core of a physician group is to resolve the market positioning of physicians’ compensation through the operation of the entire capital market.

6、 Healthcare+The Internet is a ticking time bomb; what we must do now is integrate core resources (by aggregating high-quality physicians).

 

Good evening, everyone. I am Shen Farong, as just introduced by the host. Tonight, I would like to discuss topics related to “Healthcare + Internet.” My presentation will cover three main aspects: first, a brief introduction about myself; second, my understanding of “Healthcare + Internet”; and third, my personal insights and experiences as the founder of Xingxiangyuan.

The Trend of Cross-Industry Collaboration in the Internet Healthcare Sector is Gradually Rising

Before founding Xingxiangyuan, I had worked in public hospitals for over two decades, eventually resigning from my position as Director of the Cardiology Department at a public hospital to move outside the state system. In the first half of this year, I ventured into a new field by establishing Xingxiangyuan. This is a brief overview of my professional journey.

Regarding “Healthcare + Internet,” there was once a striking statement: “For China Mobile, after competing with China Telecom and China Unicom for so many years, it ultimately realized that Tencent was its true competitor.” Another example is Alibaba. As an e-commerce company, it ventured into cross-sector financial services, primarily serving small-scale customers overlooked by traditional large banks. In effect, the core customer base of major banks was poached.

The internetization of the healthcare industry is also developing rapidly. Although it currently lags behind other sectors, cross-industry integration is gradually taking place.

In my view, the integration of the internet and healthcare is not necessarily synonymous with “Internet Plus Healthcare,” as the medical sector possesses unique characteristics that distinguish it significantly from industries such as fast-food delivery or convenience meal purchases. Regarding “Healthcare Plus Internet,” I believe it can be summarized in two phrases: doing what has never been done before, and improving what is currently being done. In other words, the integration of healthcare and the internet has the potential to make our medical service processes highly efficient and standardized. This is my personal understanding of “Healthcare Plus Internet.”

Medical+The Internet Industry Flourishes with a Diversity of Business Models

In this era, as Dickens once said, it may be the best of times or the worst of times. The medical internet is currently in a period characterized by vast illusions, where distinguishing truth from falsehood is difficult. For the healthcare industry, digital transformation presents an excellent opportunity. As a physician, I closely monitor developments in the field of “Healthcare + Internet” on a daily basis.

From a data perspective, hospitals generate vast amounts of data, yet there is uncertainty regarding how to effectively apply and analyze it. From the standpoint of doctor-patient relations, current tensions are difficult to resolve; physicians are overburdened, while patients remain dissatisfied. In response to these pain points, a series of “Internet + Healthcare” products have emerged, including self-diagnosis tools, online consultation platforms, lightweight consultation services, specialist physician groups, pharmaceutical e-commerce, wearable devices, and health wellness solutions, fostering a thriving “Internet + Healthcare” ecosystem.

Internet+Scarcity of High-Quality Physicians and Low User Stickiness

There are very few renowned doctors available online because they do not lack patients. They are extremely busy, have no need for apps, and lack the time to learn how to use them. Therefore, renowned doctors simply have no bandwidth to engage in online consultations. However, it is precisely these renowned doctors who hold high-quality medical resources, even though their adoption of internet technologies may be very low. Some "Internet + Healthcare" companies claim to have 100,000 to 200,000 renowned doctors on their platforms; I am skeptical about the credibility of such claims. In this regard, the online sector is significantly weaker compared to the offline sector.

Meanwhile, due to the scarcity of credible, transparent, and high-quality content online, interactions between doctors and patients, as well as among patients themselves, remain at a relatively low level, resulting in weak user engagement and low patient retention. The widespread circulation of posts about Chunyu Doctor on the internet some time ago also offers us an insight: it is essential to understand what online physicians truly need. Furthermore, patients’ evaluations of doctors’ diagnostic and treatment processes online are often highly unreasonable.

In my view, the entire healthcare process connects doctors at one end and patients at the other. Whether through apps, O2O (online-to-offline) services, tiered referral systems, remote consultations, or additional outpatient appointments, the essence remains a connection between doctors and patients. All tools provided aim to optimize workflows and enhance efficiency.

Four Major Career Paths for Physicians

In the future, societal demand for high-quality physicians will increase. The State Council’s 2015 Guiding Opinions on Advancing the Construction of a Tiered Diagnosis and Treatment System includes a provision that serious diseases should be treated within the county level, which will create substantial demand for medical professionals in healthcare institutions below the county level. Additionally, private capital investment in healthcare is currently surging, with private institutions seeking experienced medical talent.

In my view, physicians are at the core of the pain points in healthcare services. Since most physicians are employed within the public system, addressing their employment issues is likely the top priority for resolving these pain points. The national promotion of multi-site practice is a highly favorable direction at this stage. In the future, we hope that physicians can operate similarly to drivers: just as drivers keep their driver’s licenses in their own possession, physicians should likewise hold their medical practice qualifications independently. I believe development should move in this direction. If this issue can be truly resolved, I think the pain points in healthcare will be largely addressed.

Currently, the medical profession is divided into four major sectors: operating comprehensive clinics, establishing physician groups, running chain clinics, and participating in the wave of internet healthcare entrepreneurship.

The core of a physician group is to address the market pricing positioning for physicians.

Government policies support physicians practicing at multiple sites, with numerous regulations introduced particularly in Guangdong and Zhejiang provinces. Amid such favorable timing, geographic advantages, and human resources, many physician groups have emerged. The rise of physician groups may help clarify the boundaries between government and market forces, potentially breaking through existing hospital personnel management and healthcare payment systems. At their core, physician groups leverage capital market operations to establish a market-driven mechanism for determining physician compensation.

So, where lie the opportunities and directions for entrepreneurship? It is advisable to carefully study the “Guiding Opinions of the General Office of the State Council on Promoting the Construction of a Tiered Diagnosis and Treatment System (2015).” Many of the ten measures outlined therein present significant business opportunities, including ensuring that major diseases are treated within county-level jurisdictions, telemedicine services, tiered diagnosis and treatment information management (Article 6), patient referral systems (Article 7), technical assistance (Article 8), and the management of chronic diseases such as hypertension and diabetes (Article 9). Substantial commercial opportunities exist in all these areas.

Xingxiangyuan Builds a Kingdom of Co-Creation for Medical Professionals

As the founder of Xingxiangyuan, I conducted a roadshow in Hangzhou on May 23 this year, inviting approximately 30 to 40 friends who regarded the project as quite promising. On June 18, a launch ceremony was held at the Zhejiang Provincial People’s Great Hall. Although we had initially invited over 100 guests, the event attracted 300 attendees, including representatives from the Zhejiang Provincial Government, the Health and Family Planning Commission, the investment community, the industrial sector, and the media.

 Xingxiangyuan is a general practice platform encompassing all medical specialties. Rather than pursuing a high volume of contracted physicians, we prioritize recruiting core key opinion leaders. Xingxiangyuan operates as an umbrella organization for physician groups, establishing a multi-site practice alliance through online and offline interactions to facilitate physicians’ multi-site practice. We provide commercial guarantees and legal support for physicians engaged in multi-site practice, which is critically important. In this sense, Xingxiangyuan functions essentially as a master brand or incubator, overseeing numerous relatively independent sub-projects.

On September 29 this year, the National Health and Family Planning Commission invited several physician groups to attend a meeting in Beijing. During the meeting, a basic definition of physician groups was established: First, they must be founded by physicians; second, they must comprise at least two physicians; third, they must be substantive business entities.

There are now many teams joining Xingxiangyuan. For instance, we have a team dedicated to the community information management platform. This outstanding team was received by Premier Li Keqiang during his visit to Zhejiang University this year. The team has since joined Xingxiangyuan from Zhejiang University to provide us with information management services.

Currently, we have signed agreements with the Shanghai Zhang Qiang Doctor Group and the US Haodafu Doctor Group. Meanwhile, we are progressively expanding our presence across various regions. Encouragingly, we no longer need to actively seek out projects for certain initiatives, as many young physicians are proactively reaching out to us. They aim to leverage their expertise to establish their own professional sphere outside public hospitals while continuing to serve within them. The Xingxiangyuan Mass Innovation Platform I advocate may be particularly well-suited to their needs.

Medical+The Practical Significance of the Internet

Regarding “Healthcare + Internet,” I personally believe it holds significant practical relevance.

First, our work is highly aligned with the new national landscape of "Internet Plus."

Second, I personally believe that our platform is a true practitioner of multi-site practice.

Third, I hope to leverage the capital markets to drive transformation in traditional healthcare;

Fourth, it can drive the development of certain hospitals, particularly private and small-scale hospitals, by providing support for their discipline construction and talent cultivation, which may represent a new model.

Fifth, another highlight in the development of private hospitals is that we can leverage Xingxiangyuan’s mass innovation platform to facilitate multi-site practice, thereby reducing human resource costs for private hospitals.

The Future Demands High-Quality Physician Resources+Internet-driven

From my perspective, current physician groups and the “healthcare + internet” model represent a latent catalyst that has yet to fully ignite the future. They are akin to tender sprouts just emerging from the soil. Nevertheless, for those who look forward to what lies ahead, the world has long since prepared solutions for you.

In the current landscape of “Internet + Healthcare,” our primary focus is to integrate core medical resources—namely physicians, particularly high-quality ones—and then identify strategic partners through an Internet-driven mindset. This approach enables us to build a brand or platform that aligns with physicians’ aspirations. For instance, Xingxiangyuan, which I founded, has the potential to become an excellent public platform for multi-site practice among physicians in Zhejiang Province and even across southern China.

I advocate that “Xingxiangyuan is an open and inclusive co-creation platform,” and look forward to close collaboration among elites from the medical, capital, internet, and other sectors to achieve mutual benefits.

Finally, I would like to say that the world is vast; while we may not be able to change much, we can still do something meaningful through our efforts.

Q&A Highlights:

Question 1: There are currently various kinds ofAPPPresent, manyAPPRequirements for registered physicians, such asIIHow should physicians at hospitals above the county level and those at primary care institutions respond to mobile healthcare? Your views on theseAPPHow to interpret?

 Shen Farong:There are indeed a vast number of apps. For instance, I frequently come across various apps in Hangzhou, but even after downloading them, I have little desire to use them and rarely do. Therefore, I hesitate to make extensive evaluations of their effectiveness. Nor do I hold an overly optimistic view of their development prospects, simply because there are too many such apps on the market.

Question 2: How can physicians coordinate their relationship with their original employers after joining Xingxiangyuan? Given that physicians are typically busy, how can they allocate more time and energy to these efforts?

 Shen Farong:Coordinating with physicians’ primary institutions should be quite straightforward. We advocate a collaborative co-creation model, welcoming physician teams rather than individual practitioners to Xingxiangyuan. If a rotational scheduling strategy is implemented, with each physician or specialist on duty for only half a day per week, time coordination becomes considerably easier.

Question 3: Is Xingxiangyuan currently profitable? How does it generate profits?

Shen Farong:Xingxiangyuan operates on an online-to-offline (O2O) model and has already begun generating cash flow.

Question 4: Renowned physicians are extremely busy; why would they have time to participate in a physician group or Xingxiangyuan? If China’s top medical experts all join Xingxiangyuan, could this create a privileged healthcare class that monopolizes access to high-end specialists, thereby compromising the quality of care in public hospitals?

Shen Farong:Renowned physicians are indeed very busy and may not be interested in online-only platforms. We adopt a hybrid online-offline model. Most leading specialists work at public or private hospitals, where they primarily focus on their core clinical duties. Their engagement with Xingxiangyuan occurs mainly during their fragmented spare time, ensuring that it does not interfere with their primary professional responsibilities.

Question 5: Will the Xingxiangyuan model lead to disordered offline medical consultations?、Is the Online Pursuit of Experts Pathological? Will the Xingxiangyuan Model Exacerbate the "Flying Knife" Phenomenon?

 Shen Farong:Xingxiangyuan will not cause disordered offline medical consultations, nor will it lead to the pathological phenomenon of patients flocking to specialists online. I have repeatedly emphasized that the essence of healthcare lies in medical resources. What we need to do is leverage the internet to achieve orderly and efficient healthcare services. For instance, specialists have their own areas of expertise; by using online methods to collect suitable patients, they can operate very effectively. I believe Xingxiangyuan should not exacerbate the phenomenon of “flying knife” surgeries (where specialists travel to perform operations at other hospitals), but rather make medical consultations more orderly through internet-based approaches.

Question 6: The Internet+Will the healthcare model impact individual clinics andSmall Hospitalcause a significant impact? Private clinics or hospitals in healthcare+Are there greater opportunities in the internet sector?

Shen Farong:“Internet + Healthcare” will not have a significant impact on individual clinics or small hospitals. If these smaller institutions are visionary and proactively embrace the internet, I believe they will perform even better.

Question 7: Is Xingxiangyuan a high-end medical service accessible only to the wealthy, or can it also provide inclusive healthcare?

Shen Farong:I believe that high-end healthcare is developing with very positive trends. Its development direction differs from that of inclusive healthcare, and the two should not be discussed together. High-end healthcare and inclusive healthcare should be separated because high-end healthcare represents a highly scarce resource. For such resources, handling outpatient consultations costing only a few yuan per visit constitutes a waste. Of course, high-end healthcare does not mean that only the wealthy can access it; rather, it refers to providing care for complex and refractory conditions by top-tier specialists.

Question 8: Is Xingxiangyuan primarily focused on treatment or prevention? Does it follow the model of private clinics abroad? Furthermore, as this healthcare model matures, will fund-based initiatives emerge to provide assistance to impoverished patients with special needs? Is this the intended model?

Shen Farong:We cannot adopt the private clinic model prevalent abroad; instead, Xingxiangyuan aims to achieve comprehensive coverage across all medical specialties. In the future, we hope to engage in public welfare initiatives for patients with special needs.

Question 9: How have we addressed the difficulty patients face in accessing medical care?、issues such as high medical costs? For doctors interested in participating, is it convenient to integrate into Xingxiangyuan?

Shen Farong:At present, physician groups merely serve as a supplement to certain deficiencies in the healthcare industry. We lack the capital, standing, and capacity to resolve systemic issues such as difficult and costly access to medical care. Our sole aspiration is to contribute modestly through our endeavors.

Xingxiangyuan is an open platform, making it highly convenient for diverse entrepreneurs or partners whose projects complement ours to integrate seamlessly.

Question 10: You just mentioned that the current medical+As the Internet remains in its nascent stage, how should physician groups compete and coexist with public and private hospitals at this current phase?

Shen Farong:In my personal view, the relationship between physician groups and hospitals is one of mutual benefit and shared gains, rather than a competitive one.

Question 11: Is the roadmap for physician groups as follows: multi-site practice, departmental contracting, and hospital contracting? Are there any policy-related issues?

Shen Farong:Physician groups are one of the manifestations of physicians’ multi-site practice. They do not contract hospital departments or entire hospitals, and thus face no policy-related issues. For instance, in Zhejiang Province, policies governing multi-site practice are clearly defined and were formally implemented this March. Xingxiangyuan primarily adopts a mass-entrepreneurship model to realize physicians’ value, ensuring that their professional worth is fully reflected.

Question 12: How can internet healthcare achieve sustainable profitability, and what are the revenue models?

Shen Farong:I have repeatedly emphasized my viewpoint: it should be “healthcare + Internet,” where healthcare is the essence and the Internet is merely a tool. The Internet can make our processes more efficient, standardized, and orderly; thus, these are two distinct concepts. As for profitability? Since the core business is healthcare, take Xingxiangyuan as an example—it is a co-creation platform. In other words, we collaborate with experts in specific fields to jointly launch ventures, enabling their technologies to be applied in clinical practice. This process inevitably involves a profit model, which is indeed very clear.

For example, Xingxiangyuan has recently established a VIP Digestive Center. This center brings together a group of digestive disease specialists from Zhejiang Province, who collaborate under the Xingxiangyuan brand to provide services at Zhejiang Greentown Cardiovascular Hospital, where I serve as President. I have specifically set up this VIP Digestive Center for them, representing a form of multi-site practice. Moreover, business and legal affairs are comprehensively managed by Xingxiangyuan. This model is innovative, legally compliant, and profitable.

Question 13: What types of smart hardware will physician groups collaborate with?

Shen Farong:What kind of mobile medical hardware does a physician group need? This depends on the specialty of the physician group, as different specialties have distinct requirements. However, one prerequisite is indispensable: robust support from IT and big data infrastructure.

Question 14: What impact will physician groups have on Grade A tertiary hospitals? Does Xingxiangyuan have specific criteria for selecting experts or physicians?

Shen Farong:I believe the impact of physician groups on tertiary hospitals will not be significant, as the physicians involved are themselves department heads and specialists at these tertiary hospitals, dedicating only a minimal amount of their time to working with the physician groups. Regarding specialist resources, we exercise selective recruitment; we identify experts with strong technical skills and reputations within the industry, and we choose to collaborate with those physicians and specialists who demonstrate excellence in both areas.

Question 15: Xingxiangyuan relies on Zhejiang Greentown Cardiovascular Hospital, which poses challenges to the replicability of this model for further expansion in other regions.Will many issues be encountered?

Shen Farong:Xingxiangyuan’s model is different. Its core competitiveness lies in its team of experts, who have signed contracts not only with Greentown Cardiovascular Hospital but also with many other hospitals. Therefore, it can be said that in the future, Xingxiangyuan will assist numerous hospitals in supporting departments that require multi-site practice arrangements in certain specialties, and we will make efforts to provide such support.

Question 16: Healthcare+How the Internet Generates Profit？How Is Healthcare Leveraging the Internet?

Shen Farong:The core of “Healthcare + Internet” remains physicians. I have always maintained this view, as high-quality medical resources are critically important. Although most physicians primarily provide basic, inclusive healthcare services, access to premium medical resources is often limited—patients struggle to secure appointments or face long waiting lists for surgeries. By integrating the internet with healthcare, we can enable patients to access these high-quality resources. Naturally, such premium services come at a cost, resulting in a clear and well-defined profitability model.

You asked about the profit model of physician groups. In reality, the profit model varies across different specialties. The example I just cited was a VIP Digestive Center, which provides differentiated services within a hospital and thus generates profits, establishing a clear and well-defined profit model.

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