Panoramic Review of Mobile Health in 2014 (Part II): A Landscape of Intense Competition

Continued from:A Panoramic Review of Mobile Healthcare in 2014 (Part I): Earth-Shattering

IV. Strategic Layout of HIS Enterprises

They typically expand into the mobile space by integrating appointment registration with in-hospital information flows, as well as through post-consultation patient management and follow-up. Given the large number of HIS vendors, most of which are privately held, the following discussion focuses only on selected representative companies and their business models.

1. Neusoft and Xikang

At the “2014 Neusoft Solutions Forum,” Neusoft announced its Internet transformation strategy—namely, B2B2C—extending from its previous focus on “B”-side businesses to the “C” end, with its core initiative beingJointly provide services to “C”-end users together with its original “B”-end clients.. The current core business is expected to be integrated into Xikang Company.One of the implementation vehicles is the Community Health Hut Project., establish dynamic personal health records for real-time health monitoring, and subsequently build a database based on these individual dynamic health profiles to comprehensively grasp the health status of residents within the jurisdiction. This also facilitates accurate medical decision-making by physicians, who can leverage long-term health data when residents fall ill.The second carrier is the “Cloud Hospital” project, aiming to integrate the service chain of consultation, treatment, and intervention.The third implementation vehicle is wearable devices, such as the Care Watch, Buddy Bluetooth Watch, and iSleep Sleep Monitor. Therefore, Neusoft’s “cloud + device” health management service model digitizes health management plans into wearable devices, covering aspects such as exercise, diet, medication, and measurements.

However, Dr. 2 believes that the platform he hopes to buildThe system is excessively large., encompassing all aspects of mobile healthcare (daily monitoring, health management, doctor-patient communication, chronic disease prevention, telemedicine, etc.), thereby making every company in the industry its competitor. The shift from primarily dealing with governments and medical institutions to engaging directly with the general public inevitably involves a process of internal conflict and self-cannibalization. As Neusoft lacks direct-to-consumer (C-end) channels and does not possess a robust internet-based direct sales channel comparable to Xiaomi’s, it has had to adopt a hybrid approach: building some channels in-house, leveraging platforms like JD.com and Taobao for another portion, and recruiting additional agents for the rest. Attempting to secure both government and consumer contracts simultaneously has made its pricing strategy extremely challenging. Furthermore, its inability to drive the industry chain forward in a linear fashion results in a very high probability of failure!

Neusoft Recently Launched a Downsizing Plan, with a planned layoff of 3,000 employees. Meanwhile, it is understood that Neusoft began implementing a gradual workforce reduction plan last year, with its total headcount standing at approximately 10,000. Regarding the much-publicized RMB 3.7 billion financing deal, touted as the largest in the mobile healthcare sector, careful due diligence reveals that it is essentially a bundled transaction. It involves stripping high-quality medical IT assets from the listed company at a low price and then bundling them with Xikang Company—a privately held entity controlled by management—for combined valuation and financing. The agreement also includes valuation adjustment mechanism (VAM) clauses: if an IPO fails to materialize in the future, the controlling shareholders are obligated to repurchase the shares at an annual interest rate of 8%. From the perspective of asset securitization, this structure resembles more of a “convertible bond” or “financial leasing,” ensuring risk-free profits for private equity (PE) firms. However, for all other shareholders of the listed company, this constitutes a further erosion of wealth. First, the total asset base shrinks; the so-called investment gains obtained are merely one-time in nature. Moreover, Chinese stocks are the most expensive globally, with comparable assets in the US and Europe valued at only half or one-third of their Chinese counterparts. How many China-concept stocks and Red Chip companies have already returned or are preparing to return to the A-share market? Therefore, claiming that spinning off assets from a Chinese company for a separate overseas listing is beneficial to the original domestic listed company’s shareholders is nothing short of absurd. By that logic, one might as well delist entirely and relist overseas!

2. DHC Software

The Jiankangle App is a key product through which DHC Software is expanding its presence in the smart healthcare sector. Positioned as an online personal physician for every individual, the app enables users to conduct medical consultations via their mobile phones. Running on Alibaba Cloud, the platform offers both mobile and desktop versions. It is set to integrate with more than 300 hospitals and plans to establish connectivity with community health centers in the future.

Currently, Jiankangle has signed contracts with six or seven hospitals. The next step is to promote its services among the more than 200 Grade A tertiary hospitals that maintain cooperative relationships with Donghua, while striving to expand into over 100 additional hospitals in other sectors.Currently, third-party login services via Baidu Maps and the Tencent Open Platform have been implemented. Meanwhile, Donghua is continuously coordinating its integration with Alibaba’s Alipay, striving to explore deeper and broader cooperation with all three BAT companies (Baidu, Alibaba, and Tencent). As a well-known domestic contractor, Donghua Software frequently secures bundled contracts for entire smart transportation and smart healthcare projects in specific provinces or cities, which it then implements. In some cases, local governments lack sufficient funds and resort to methods such as land swaps, other forms of benefit compensation, or transfer payments. This places significant pressure on the company’s cash flow, soIts future development will depend in part on the macroeconomic environment and the fiscal conditions of local governments.Meanwhile, Donghua also offers a “Pocket Hospital” mobile app. With strong nationwide promotion in China and relatively solid distribution channels, the company demonstrates a strong aggressive stance in the mobile healthcare sector overall!

3. Kingstar Winner and Wonders Information

Winning Health Technology Group Co., Ltd. focuses on the research, development, and application of medical information management systems. It boasts an extensive product portfolio covering all sectors of the healthcare information industry, including solutions such as Hospital Information Systems (HIS), Electronic Medical Records (EMR), Laboratory Information Systems (LIS), Radiology Information Systems (RIS), and Picture Archiving and Communication Systems (PACS), as well as insurance and public health management systems. The company is also deeply engaged in the R&D of systems for mobile nursing, mobile physician services, mobile infusion monitoring, family doctor services, bedside intelligence, management decision support, and e-Care (Yi Xun Tong), while simultaneously developing products such as You Yun Bao. In its most recent strategic moves, the company has adopted an acquisition-driven approach to expand into non-local markets, with a primary focus on developing products that integrate with both basic medical insurance and commercial health insurance.Plan to enter the PBM (Pharmacy Benefit Management) sector in the future., with Wanda Information and Hailin Holdings as competitors; the benchmark company is ESI in the United States, and the project is currently still in progress.

Wanda Information primarily focuses on the niche sector of interfacing with medical insurance information systems. Following its acquisitions of Shanghai Fugao and Ningbo Jintang, the company strategically entered the Hospital Information System (HIS) market. In 2014, it successfully secured the contract to build the Shanghai Drug Information Platform. Based on an analysis of its acquisition strategy and a series of public market moves, it is speculated that Wanda Information may center its future efforts on medical insurance cost containment, penetrating city-wide HIS infrastructure construction and regional healthcare informatization through a grassroots-oriented layout, aiming to become the central “faucet” controlling data and payment flows. Meanwhile, its ambitions in the Pharmacy Benefit Management (PBM) business are well known to all; the industry awaits further developments with keen interest.

4. Hangzhou Chuangye and Peking University Medical Information

B-Soft was founded in 1998,It has now become one of the leading enterprises in software research and development, promotion, and application within China's healthcare industry.. PKU Healthcare IT, having evolved through Founder Zhongbang and the Founder International Healthcare Division, now leverages its affiliation with Peking University Health Science Center and Founder Group to expand its business. The company has completed technical reserves and implementation capabilities for the mobilization of clinical information systems—including clinician work platforms, electronic medical record (EMR) systems, nursing clinical systems, mobile physician workstations, and mobile nurse workstations—as well as development work in hospital operational management (full-cost accounting, performance evaluation, salary management, and bonus distribution), health examination systems, and regional collaborative healthcare (master patient index, bidirectional referral, collaborative medical technology services, and cross-institutional document access). It has gradually introduced new products to the industry, forming a comprehensive product portfolio for digital hospital construction and regional healthcare informatization. Hangchuang’s mobile healthcare pilot in Shanghai’s Minhang District and PKU Healthcare IT’s practical deployments in select core hospitals in Beijing are both strategic moves to secure a dominant position, leveraging the benchmark status and influence of major cities to expand nationwide.

5. Kingdee Medical (Yonyou Medical is similar)

Kingdee Group, with its financial software as the flagship product, entered the healthcare informatization industry three years ago by acquiring HIS and LIS vendors and integrating its own HRP business, subsequently launching six digital hospital solutions. Kingdee Healthcare’s Mobile Internet Hospital was also launched in May this year. According to Kingdee Healthcare, the Mobile Internet Hospital enables patients to use smartphones for appointment registration, fee payment, viewing test reports and itemized bills, and providing feedback on medical service satisfaction, thereby addressing the “three long waits and one short consultation” problem prevalent in large hospitals—namely, long queues for registration, long waiting times for consultations, long queues for medication pickup, and short consultation times with doctors.

Kingdee Medical’s mobile internet hospital system has established a business model integrating “mobile payment + optimization of hospital care processes + medical services + patient health records.”, and for the first time, it entered hospitals through three major portals: WeChat, Alipay, and Baidu Direct Connect. However, its “bank-pays” revenue model remains unproven in the market. Moreover, due to its HIS (Hospital Information System) heritage, it is bound to encounter friction with other healthcare IT vendors during nationwide expansion, making collaboration difficult. Therefore, no matter how hard it tries, it will not rise to the top tier, but it can become a regional leader and an integral part of the ecosystem.

6. Beijing Jiahe, Xinlianda, and Heshun Yangguang

Although Jiahe is not publicly listed, it is the market leader in China’s electronic medical record (EMR) sector, with a substantial scale and total revenue twice that of Winning Health. The company is actively deploying and developing new in-hospital mobile healthcare solutions. As a private entity, Jiahe discloses limited public information; available insights are derived primarily from reverse research conducted among select clients. Xinlianda and Heshun Yangguang represent relatively smaller HIS vendors. They are also strategically expanding their presence, focusing mainly on mobile ward rounds and mobile nursing, with several successful implementation cases to their credit.

V. Mobile Health Conferences Boom, Media Rises

In 2014, various industry conferences were exceptionally popular. Regardless of whether they were branded as Smart Healthcare, Smart Hospitals, Smart Health, Health Management, Smart Elderly Care, Internet Healthcare, Digital Healthcare, Medical Big Data, Wearable Hardware, or Intelligent Hardware, the content of many conferences was largely similar. Presenters often merely updated the dates on their PowerPoint slides. Many familiar faces repeatedly took the stage; for instance, one speaker’s presentation titled “Stumbling Along” was delivered for nearly half a year, only to be rebranded as “Immobile Mobile Healthcare” to highlight offline diagnosis and treatment for another six months. Major mainstream media outlets, including CCTV and other leading news websites, as well as self-media platforms, actively covered these events. However, many articles were plagiarized, echoed prevailing opinions without critical thought, or employed sensationalism to attract attention. An analysis of the density schedule of major conferences throughout the year reveals that the hype persisted from beginning to end without any gaps, which is one of the hallmarks of an industry explosion. Meanwhile, small-scale salons held in various cities numbered over one hundred, too numerous to list individually. On average, there was one event every two days, with particular peaks after May and during the year-end summary period. Beijing hosted the most events, followed by Shanghai, Hangzhou, Nanjing, and Guangzhou, directly reflecting the geographical distribution of companies within the industry.

Since this year, many media outlets have begun to focus heavily on mobile health. For instance, China Central Television (CCTV) interviewed “Spring Rain Doctor” twice and reported on “Sugar Nurse,” while articles about mobile health companies or products have frequently appeared sporadically in major newspapers.Established portal sites such as Sina, NetEase, and Sohu have all begun to dedicate special sections to their coverage.. Meanwhile, emerging media outlets such as Caixin Life, 36Kr, and Leiphone have begun to intensify their editorial efforts by assigning dedicated staff and launching columns focused on mobile health. Professionally oriented medical media platforms, including Jiankangjie (Healthcare Information Network), Yixuejie (Medical World), and Xinkangjie (New Healthcare World), are even at the forefront. At the same time, this year has seen the emergence of a batch ofSelf-media platforms focused on the mobile healthcare sector, such as Zhenlipai,VCBeat, Beike She and Qidian Mediaeither to meet their own product marketing needs, or with the ambition of becoming China’s mobile health incubator, benchmarking against Rocket Health in the United States. Traditional health media platforms such as Health News, DXY, Medlive, and Medical Forum Network are also actively expanding into this field. Overall, a “flourishing” new landscape of mobile health media has emerged!

In the final chapter, we will discuss other key players in the industry, such as real estate developers, telecommunications operators, and representative companies from various sub-sectors. Stay tuned!

(This article was first published by NetEase Technology and republished by VCBeat with authorization from Dr.2.)