Medical Circle Weekly (WeChat Group) No.1: Hospital Presidents on Internet Healthcare Files IPO Prospectus

Discussion Venue: Guidance Group of the President of the Chinese Non-State Medical Institutions Association

Participants in the discussion: Weihong (Medical Information), Yin Shiquan, Dafeng, Uncle Zhang, Zhou Wei, Ma Zhaoyi, Ma Wei, Jeff

I. What Does Internet Healthcare Look Like in the Eyes of Hospital Presidents?

1. Different perspectives and differing interests drive divergent approaches; in China, where medical resources and demand are asymmetrical, internet healthcare companies are currently following a predominantly abnormal, capital-driven path.

2. Many current internet healthcare entrepreneurs are inflating their own value by participating in egalitarian dialogue interviews. While this practice may seem like self-aggrandizement, public hospital presidents genuinely view them as merely vendors wearing a new hat. No matter how impressive they appear, their users ultimately must seek medical care at our hospitals, remaining our patients after all. This mindset is somewhat akin to the Buddha observing Sun Wukong.

3. At present, hospitals are practicing “Healthcare Plus,” while internet companies are pursuing “Internet Plus.” Perhaps the true spring of mobile health will only arrive when hospitals themselves embrace “Internet Plus.” From a market perspective, healthcare remains a seller’s market, resembling either inadvertent or deliberate hunger marketing. Healthcare reform is a systematic project whose core lies in the people and interests involved; how can this be addressed by peripheral commercial entities? Do not assume that because Jack Ma succeeded, you will too. Different industries and environments make such comparisons inappropriate. Dr. Duan Tao stated that physicians should prioritize medical care as their foundation, while Professor Wang Shan emphasized quality control as the top priority—both views represent a return to the essence of healthcare.

II. How Exactly Should Physician Agents Operate? Can Renowned Physicians Leave Hospitals?

1. Physician agents lack sufficient control over physicians. Because agents do not participate in the professional growth and development of physicians, only if a company cultivates a physician step by step into a renowned expert would the agent have sufficient control.

2. The core value of a physician lies in earning patient recognition for the individual doctor, rather than merely for the affiliated hospital. Such personal recognition is also the source of a physician’s reputation and financial rewards. Only by fully understanding this dynamic can physician agents operate effectively. Furthermore, physicians at different professional ranks and from different institutions often have distinct needs, with significant variations in some cases. Therefore, physician agents must provide more meticulous and personalized services.

3. A model centered on individual renowned physicians may be feasible in the field of Traditional Chinese Medicine (TCM). However, in modern medicine, diagnosis and treatment have evolved into a multidisciplinary collaborative model, where the advantage of large public hospitals lies precisely in their capacity for multidisciplinary coordination. Therefore, implementing a model centered on individual renowned physicians is challenging. Moreover, if such physicians were to work in hospitals with inferior conditions, their effectiveness would be significantly compromised due to the lack of high-quality support systems. Renowned physicians are well aware that it is only by leveraging the extensive platform provided by public hospitals that they can fully utilize their experience and expertise; without this platform, they would be unable to perform effectively, much like a clever housewife cannot cook without rice. Currently, mobile health serves primarily to fill gaps and supplement an imperfect healthcare system. This supplementation is reflected more in the mode of service delivery than in the quality of care.

4. Physicians must currently remain loyal to their hospitals. This approach facilitates the establishment of a stable patient base for departments, allowing both senior and junior physicians to practice with confidence rather than hesitation. While some departments have created WeChat patient groups and subscription accounts, with many physicians actively participating, these patients become unaffiliated once discharged. Therefore, I believe mobile healthcare should focus on assisting hospitals in improving follow-up care to enhance patient retention. Positioning mobile healthcare as a competitor to hospitals is currently quite challenging, as no physician is willing to risk being labeled as “disloyal” or “betraying their employer.”

III. Is Internet Healthcare Collaborating with Hospitals or Poaching Their Talent?

Trust the words of President Wang Shan and President Duan Tao: serving doctors and hospitals well is the best path forward for mobile health. Otherwise, it would be disastrous to invest significant effort and capital only to find that doctors are unwilling to participate in the end. Blind capital infusion has created illusions within the so-called “mobile health” industry, where few players prioritize survival as their primary goal. Even with WeDoctor’s substantial investments, the healthcare system it has built remains fragile. It is correct to seek collaboration with hospital presidents; poaching talent from hospitals has no future. I respect the courage of those entrepreneurs who engage in such poaching, and I believe they will inevitably expose the flaws in the healthcare system and stimulate a “catfish effect.” However, those who are the first to catch crabs often do not live long enough to enjoy eating them.

Discussion Venue: Dean Shen Farong's Sharing Group

Discussion Participants: Shen Farong, Che Fu, Zhang Weiqun

Key Point: Addressing physician turnover is the key to healthcare reform.

1. In China, physicians’ regular income is relatively low, and many pharmaceutical sales representatives earn significantly more than doctors. In the United States, the average annual cost for malpractice insurance is $15,000, accounting for 8% of their income, which implies an average annual income of around $200,000 for U.S. physicians. Specialists such as surgeons and gynecologists typically earn even higher incomes. However, the early self-training costs for U.S. physicians are considerably high.

2. Regardless of whether they operate within or outside the public healthcare system, physician groups or platforms such as Xingxiangyuan ultimately aim to serve both doctors and patients, thereby improving medical efficiency and patient satisfaction. In the future, the market will inevitably evolve into a diversified ecosystem where profitability models and benefit distribution are built upon platform infrastructure and interactive engagement. The profitability model is not inherently complex; for instance, insurance support offers a viable pathway. As diversification progresses, basic medical insurance will likely exclude patients seeking high-quality, premium medical services, as its future role will be confined to covering fundamental healthcare needs. Therefore, introducing new commercial insurance products represents a strategic approach, with basic medical insurance covering essential care and commercial insurance addressing additional or premium services.

3. It is inevitable for physicians to leave the public healthcare system; healthcare reform represents the final wave of reforms, presenting a significant opportunity as a major tide of physician mobility approaches. Whether within or outside the public system, multi-site practice is a dominant trend. This has long been the case in dentistry, largely due to the nature of clinical services, which has also given rise to physician groups. Physicians are mobile worldwide. In China, healthcare reform can only advance effectively when physician mobility is enabled; thus, physician mobility is key to successful healthcare reform. Furthermore, increasing physicians’ income ensures they are no longer mere appendages of hospitals but have autonomy in their career choices, leading to a more rational and sustainable system.

Location: China Primary Healthcare Management and Operations Exchange Group

Participants in the discussion: Zhang Haijiang, Yi Yi Yi Shi Jie, Beijing Yi Zhang Kan, Zhao Hui

Key Points: Primary care is severely inadequate, and the path to implementing a tiered diagnosis and treatment system remains long.

1. Medical expansion in large hospitals: Provincial-level hospitals recruit core medical staff from prefecture-level city hospitals, which in turn draw key personnel from county-level hospitals; county-level hospitals then absorb backbone staff from township health centers, leading to a gradual weakening of capacity at the grassroots level.

2. The media’s extensive coverage of medical disputes, coupled with encouragement to seek care at large hospitals, has led an increasing number of patients to visit these institutions.

3. With economic development, the public’s demand for healthcare has grown increasingly high; as long as a condition can be treated, whether or not it is covered by insurance reimbursement is largely irrelevant. Patients are willing to pay out-of-pocket to seek care at major hospitals.

4. The frequent occurrence of medical disputes and risks has led hospitals to place little emphasis on interns from medical schools, strictly control their clinical procedures, and fail to keep pace with the training of physicians’ competencies.

5. Weakened capacity of primary healthcare institutions, a sharp decline in medical revenue, and severe underfunding by the government have led to a shortage of talent. Graduates with associate or bachelor’s degrees are reluctant to work at primary-level hospitals, particularly township health centers.

6. It is nearly impossible to obtain regulatory approval for establishing individual clinics (registered by village doctors), leaving residents unable to find trustworthy physicians in their communities.

7. With the development of the internet, the public has access to an increasing number of channels for obtaining health and disease-related information (some of which may be inaccurate). Discrepancies between patients’ understanding and physicians’ clinical analyses often lead to disagreements, thereby exacerbating patients’ distrust. Consequently, patients frequently consult multiple physicians or seek care at different hospitals, resulting in the wasteful and excessive utilization of medical resources.

8. During the comprehensive implementation of the National Essential Medicines System, primary healthcare institutions have faced severe restrictions on the variety and specifications of clinical drugs, resulting in a situation where physicians possess the technical expertise to diagnose and treat patients but lack access to necessary medications. Furthermore, a shortage of medical talent has hindered the development of specialized sub-disciplines, leaving most primary hospitals operating merely at the level of general outpatient care without any distinctive specialties. In some cases, primary care physicians have effectively become pharmaceutical sales representatives, performing tasks with minimal technical content. Meanwhile, objective factors such as caps on total physician compensation, the implementation of separate management lines for revenue and expenditure, and a lack of operational autonomy have prevented primary healthcare institutions from fully meeting the public’s healthcare needs.

9. The current medical insurance reimbursement policy still allows patients to freely choose their healthcare providers, resulting in a continued patient flow toward higher-level hospitals with superior resources. This trend contradicts the reform objectives of “managing minor illnesses at the community level, referring serious cases to hospitals, and returning patients to the community for rehabilitation,” as well as the goal of implementing a tiered diagnosis and treatment system. Consequently, the work motivation of staff in primary healthcare institutions has been adversely affected, leading to a severe brain drain of professional talent and accelerating the decline in primary healthcare service capacity.

10. From the perspective of basic sociological principles, governmental authority is currently somewhat uncontrolled, while the epistemic authority of physicians is difficult to regulate, leaving hospitals caught in a dilemma between the two. Since the implementation of tiered diagnosis and treatment requires decentralizing both the scope of primary disease diagnoses and medical resources, tertiary Grade A hospitals should not occupy an excessive share of primary care cases. Therefore, there is still a long road ahead.

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