China Moves to Standardize Soaring Online Hospital Market

Insiders say purely internet-based medical service providers will suffer major blow under new policies.

By Ni Dandan

Amid speculation about the potential for tightened regulations, investors, hospitals, and patients alike continue to show great interest in China’s growing online medical services industry.

More than 200 representatives from county-level hospitals and businesses on Tuesday participated in a forum in Shanghai organized by China’s major online medical service platform, We Doctor, as part of Pharmchina, an annual drug fair.

One hot topic among attendees was the industry’s new pilot regulations, which had circulated online the week prior. The document, issued by the National Health and Family Planning Commission, was likely intended for internal use but had apparently been leaked. Key among the suggested new rules is that internet hospitals may no longer accept first-time patients, ruling out the business model whereby patients can simply open an app and find a doctor in order to get a diagnosis.

However, some may suffer as a result. “The new rules will deal a heavy blow to those who run medical services purely online,” said Wang Bin, We Doctor’s general manager for Northwest China. “That’s the original operating format for almost all internet medical service providers in the country.” Wang’s company co-founded the Wuzhen Internet Hospital and the Guangzhou Internet Hospital, with the latter being the first internet hospital established in a so-called first-tier city.

Wang told Sixth Tone that because We Doctor had in 2015 begun shifting its focus from developing an app to building brick-and-mortar facilities, the new regulations would not impact the company’s core business.

“We’ve been studying the document over the past few days,” Wang said. “The only corresponding change we need to make is to come up with new names for our facilities.” According to the new regulations, hospitals whose operations are based on online technology cannot be called “internet hospitals” or “cyber hospitals.”

Wang said that as required by the government, We Doctor’s internet hospitals have been providing services exclusively for patients, who often require follow-up supervision after seeing their doctors in large, faraway hospitals, or who may be going to grassroots hospitals to receive treatment for chronic conditions.

“We have never accepted a first-time patient,” Wang said. “It’s impossible for any internet hospital to give a clear diagnosis without being able to offer necessary tests.” Wang added that the We Doctor platform is crucial for helping grassroots hospitals improve their quality of service and boost the incomes of their staff.

In recent years, the field of online medicine has expanded rapidly in China. The first company to provide medical information on the internet was Good Doctor Online, launched in 2006. Then came Chunyu Doctor in 2011, allowing patients to connect with doctors via their smartphones. Beginning in December 2015, traditional hospitals started to follow suit by offering online services. Currently, there are around 80 such hospitals, with further growth expected.

Online medical services are popular with patients, many of whom travel to major cities to receive treatment at large hospitals and then rely on follow-up consultations when they get back home.

Xie Fangmin, CEO of online drug store Jianke.com, was quoted by Southern Metropolis Daily as saying that the new rules mean the internet hospital industry has caught the attention of the central government, and that more regulations to standardize the industry will only benefit its development.

Chen Lin, an administrator at a county-level hospital in Guangdong, said internet hospitals give her hope that her hospital will improve its own medical service standards. “We are in urgent need of expert doctors from higher-ranking hospitals for guidance in complicated cases,” Chen told Sixth Tone, “and internet technology is the most feasible and efficient way to accomplish this.”

Public opinion on the pilot regulations is still being gauged, and it has not been specified when the rules might come into effect. But once they are officially implemented, the licenses of internet hospitals will be canceled, and they will be required to re-register with the government under the new criteria.

Editor: Kevin Schoenmakers.

(Header image: Aflo-RF/VCG)

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