Insights from VB Think Tank Session 7: Chronic Disease & Health Management Forum & China Galaxy Securities Healthcare Investment Seminar

In China, chronic diseases have become a focal point of internet healthcare from the outset due to their high prevalence, prolonged disease course, complex etiologies, substantial cumulative treatment costs, and frequent patient–provider interactions. Governments, physicians, traditional pharmaceutical companies, and startups, each playing distinct roles, are addressing practical pain points in chronic disease management and health care with an innovative mindset, striving to deliver medical solutions that offer better therapeutic outcomes at lower costs.

VCBeat, in collaboration with the healthcare research team at Galaxy Securities,Invited toGu Xuefei, Deputy Director of the Medical Security System Research Office, Development Research Center of the National Health and Family Planning Commission、Xu Huansheng, General Manager of the O2O Business Division at Ciming Health Checkup、Lin Hai, Founder of CareRay Nephrology Physician Group、Chen Chen, Head of the Saint Medino Dynamic Blood Glucose Big Data Platform、Yin Lizheng, Head of the Mobile Healthcare Division at Wuxi Bohuis Biopharmaceutical Co., Ltd.and Xu Feng, Co-founder of Tang Doctor, shared their respective experiences and insights in exploring the fields of chronic disease management and health management.



Gu Xuefei, Deputy Director of the Medical Security System Research Office, Development Research Center of the National Health and Family Planning Commission

Speech Topic: Medical Insurance, Health Management, and Internet Healthcare

Highlights
First, Gu Xuefei stated that this presentation represents his personal views and not an official position.
In China, the coverage rate of basic medical insurance was less than 30% in 2003 and rose to 60% by 2011. Currently, the insured population accounts for 95%. Moreover, China’s current healthcare security system is primarily based on narrow-sense medical insurance, which cannot be classified as health insurance under the international definition.

In China, inpatient reimbursement under the national medical insurance system is higher than outpatient coverage, reflecting a policy orientation that prioritizes hospitalization. Due to inadequate outpatient services, patients with chronic diseases are often forced to seek inpatient care. However, given the accelerating aging of the population and the resulting dominance of chronic diseases as the primary disease burden, this pattern poses significant risks to the sustainability of medical insurance funds. Only by raising the pooling level of medical insurance and improving the mechanism for reallocating medical resources can this issue be effectively alleviated.

Furthermore, health insurance expenditures are also at risk. Healthcare institutions may engage in premium fraud, overtreatment, and therapeutic abuse, while patients may fail to control or effectively manage their conditions, leading to increased medical costs.

Therefore, there is an urgent need to shift the paradigm of medical insurance from mere coverage to comprehensive health assurance. This transition aims to improve health outcomes through risk pooling and signifies a shift in health responsibility from a physician-centric model to one based on doctor-patient interaction.

What is the relationship between health insurance and health management? First, by identifying risk factors in advance, it reduces the incidence of chronic diseases and their complications, mitigates moral hazard, and thereby lowers healthcare costs. Second, it improves the equity of the health insurance system through risk adjustment techniques. To this end, the State Council issued the “Several Opinions on Accelerating the Development of Modern Insurance Services,” encouraging commercial insurance companies to develop health management services integrated with insurance products.

To achieve this transformation, several key issues must be addressed: Who will bear the cost? How can synergy within the chronic disease prevention and control system be realized? It is essential to reform the existing compensation mechanisms for healthcare institutions and physicians, shifting from fee-for-service to payment based on service outcomes.

Tang Doctor Co-Founder Xu Feng

Speech Topic: The Sweet Rebellion—Exploring Domestic and International Models for Entrepreneurship in Chronic Diabetes Management

Highlights
There are two major camps in online debates: the “sweet tooth” faction and the “savory preference” faction. In reality, individuals who favor savory foods can also develop diabetes. Adding a small amount of sugar when stir-frying dishes daily is unlikely to have a significant impact, but consuming cream cakes every day carries a considerably higher risk.

China’s diabetes market comprises 141 million patients, with annual expenditures varying between those with and without complications. Within the medical community, there is ongoing debate regarding salt intake in hypertension management; currently, China has more than 300 million individuals with hypertension.


Pioneers in international internet-based diabetes care include WellDoc, founded in 2005; continuous glucose monitoring platforms such as Dexcom and Medtronic; and Glooko, which has received investment from Medtronic.

Domestic diabetes projects in China can be broadly categorized into two types: those providing hardware entry points, such as Tang Hushi (Sugar Nurse), Tang Dafu (Sugar Doctor), and Yinuo Doctor; and those building software platforms, including Tang Yisheng (Sugar Doctor), Weitang (Micro Sugar), and Xuetang Gaoguan (Blood Sugar Executive).

Advantages of Hardware Entry Points:

Owns its own hardware access data
The product or related consumables are billable, resulting in strong cash flow.
Hardware-enabled extension of related services offers significant growth potential.

Disadvantages of Hardware Entry Points:

Asset-heavy, with high pre-sales and after-sales labor costs required for servicing hardware
High Hardware Promotion Costs and Intense Competition
Through hardware extension services, is the logical purpose of service to drive hardware sales, or is hardware meant to enhance service? In the long run, service will inevitably be the core and focus, with hardware merely serving as an adjunct to service.

Advantages of the Software Entry Point:

Asset-light, aligned with the internet spirit
Flexible, allowing for arbitrary hardware combinations
Soft Power and Platform Effects: Once Established, the Potential for Growth Is Immense

Disadvantages of the Software Entry Point:

Data sources remain to be resolved
The software functions are similar, making it difficult to establish distinctive features.
No clear source of revenue in the early stage

Key Features of Tang Yisheng: It supports over 13 mainstream blood glucose meters available on the market, with continuous expansion of compatibility, thereby addressing data source issues. Moreover, it pioneered offline service centers; the Tang Yisheng Offline Service Center was officially launched on July 20, 2015. Additional core highlights of the product include home medication delivery services, personalized intervention recommendations, the establishment of an endocrinologist physician group, and the creation of a social community for individuals with diabetes.

Chen Chen, Head of the Saint Medino Dynamic Blood Glucose Big Data Platform

Presentation Topic: A Brief Discussion on “Internet + Smart Healthcare”

Highlights
The traditional medical device market has been in a phase of rapid growth from 2001 to the present. With the development of mobile internet, mobile healthcare has entered a stage of explosive growth, making the era of intelligent healthcare within reach.

Shengmeidi Nuoxin, established in December 2003 in Huzhou City, Zhejiang Province, is a Sino-foreign cooperative enterprise with a registered capital of RMB 30.7692 million. The company currently holds 6 granted patents and has 9 patents under examination. Meanwhile, the company is committed to the research and development of subcutaneous minimally invasive dynamic glucose sensor series products.

Continuous Glucose Monitoring (CGM) holds significant clinical value, enabling 24-hour continuous monitoring of blood glucose fluctuations to guide adjustments in diet, lifestyle, and medication.

Currently, we are undergoing a transformation from traditional enterprises to internet-based companies, shifting our focus from brand awareness, reputation, and loyalty to pursuing traffic, word-of-mouth, and opportunities.

Insufficient corporate innovation capability will be a major factor hindering the sustainable development of medical device companies; unlike other industries, the unique characteristics of distribution channels for medical devices have become an obstacle to industry growth; the low level of product marketization in the medical device industry also impedes its rapid development.

Our product development requires a forward-looking approach, as user needs are paramount and product quality comes first. Guided by this principle, we develop wearable devices with a customer-centric focus, addressing patients’ dietary pain points—such as monitoring how the consumption of certain foods triggers blood glucose fluctuations.

What Have We Done? In 2012, we proposed a big data strategy, recognizing that data determines the scope for development. The possession of effective data collection and analysis capabilities is a key factor distinguishing traditional healthcare models from internet-based healthcare models, and serves as an important indicator for assessing whether an internet healthcare enterprise has broad potential for growth.

Our products currently cover more than 1,700 hospitals, with a total of 5 million dynamic blood glucose data records.



Lin Hai, Founder of Kairui Nephrology Physician Group

Speech Topic: Pragmatism and Innovation—On How Nephrology Physician Groups Can Launch Startups

Highlights
In Japan, dialysis costs account for 10% of the national health insurance budget. If this proportion were applied to China, future dialysis expenditures would reach tens of billions of yuan. While cancer treatment incurs high costs, patient survival times are relatively short; in contrast, dialysis patients incur an average annual cost of 100,000 yuan and have a considerably longer average survival time.

There are currently only over 2,300 hemodialysis centers in public hospitals. In the next decade, the number of dialysis centers in China will reach 5,000 to 10,000, serving millions of patients with kidney disease. Many dialysis centers have not yet opened for business.

Dr. Kai Rui’s entry into the nephrology dialysis market marks the first time specialist physicians have entered this familiar sector through a commercial model, seizing an opportune moment. The nephrology dialysis market remains a blue ocean, with significant unsaturated demand. Furthermore, national policies encourage social capital investment in healthcare and support multi-site practice arrangements for physician groups.

Following VCBeat’s report, tens of thousands of healthcare professionals have turned their attention to Kairui, with numerous private hospitals as well as physicians and nurses proactively expressing interest in joining Kairui or seeking collaboration. In Beijing, three hospitals with dialysis qualifications have already been acquired. We are currently compiling a list of potential partner hospitals in other regions.

Physician-led dialysis differs significantly from nurse-led models, enabling us to confidently accept a diverse patient population. Furthermore, our technical and management standards are aligned with international benchmarks and those of major domestic hospitals, with two full-time experts from CareRay on our team. Our patients benefit from seamless bidirectional referrals at any time: critically ill patients can be transferred out, while those with milder conditions can be referred in.

Current Assistance Required:

Provide guidance on multi-hospital mergers and acquisitions.
Provide us with IPO guidance starting from the current stage.
Financial support is required to integrate multiple private hospitals across China into a specialized consortium for nephrology and dialysis.
Excluding small-tier hospitals, there is a plan to acquire a large Grade II Class A specialized nephrology hospital in Beijing and operate it jointly with a urologist physician group, which requires substantial financial support.

Yin Lizheng, Head of the Mobile Healthcare Division, Wuxi Bohuis Biopharmaceutical Co., Ltd.

Presentation Topic: The Development of Mobile Healthcare from the Perspective of Glycation Detection Devices

Highlights
BioHerms, founded in 2006, is a high-tech company specializing in in vitro diagnostic technologies and products. Its flagship product is Botangping, the world’s only handheld glycated hemoglobin (HbA1c) analyzer. The company has secured over RMB 100 million in joint investments from Legend Capital (the professional venture capital arm of Legend Holdings), Yifang Investment, and Kaixuan Venture Capital.



Glucose in the blood enters red blood cells and binds to a portion of hemoglobin molecules, a process known as glycation. The clinical significance of glycation in diabetes lies in its role as an auxiliary diagnostic tool; it is the preferred diagnostic criterion in the United States. It directly assesses treatment efficacy and informs patients of their proximity to developing diabetes.

So, how large is this potential market? First, hospitals will certainly consider cost-effectiveness; from a cost perspective, our device is priced under RMB 1,000. Target segments include portable home use (OTC), health checkup centers, nursing homes, and corporate partnerships (with pharmaceutical companies, health supplement providers, and banks/insurance firms). Based on a per-test fee of RMB 30–80, this will create a market exceeding RMB 10 billion.

We believe that the development trend of blood glucose measurement is moving towards miniaturization, home use, and remote monitoring in the future.

Xu Huansheng, General Manager of the O2O Business Division at Ciming Health Checkup
Topic: Health Management in the Cloud Era

Highlights
The strategic logic of Internet thinking is the number of users captured. Baidu and 361° jointly launched children's smart shoes, embedding a smart chip into kids' footwear, thereby successfully converting past consumers into users. After Premier Li Keqiang introduced the concept of "Internet Plus," capital markets overreacted to this sector.

Renhe Pharmaceutical is poised to achieve significant success in this process. In the past, its sales channels relied heavily on advertising; however, ad spending has decreased over the past two years as the company undergoes a channel transformation.

Renhe has developed Smart Youkadan to prevent colds in children. By connecting a smart thermometer to a smart wristband, the system alerts adults via the wristband when a child’s body temperature drops below a certain threshold during sleep. Renhe has also launched Dingdang Fast Medicine, a service where each pharmacy covers a 2.5-kilometer radius, ensuring medication delivery within 28 minutes.

Therefore, the era of decentralized marketing and big data has arrived, paving the way for precision marketing, which can be achieved through Ciming Health Checkup’s Health Kiosks.