Internet healthcare is entering deep waters

Medlink Group has already integrated Future Doctor，Their valuations after the latest round of financing reached40hundred million USD and10hundred million USD。This merger caseindicatesthe latest sign that China's internet healthcare has entered deep waters. As online and offline links are connected one by one, the new regulations for internet healthcare have become clearer and stricter, and the regulation of online healthcare and offline hospitals is converging. For example, hospitals have already broken the practice of using drug sales to subsidize medical services, and such behavior will not be exempted online in the future. Internet healthcare companies are adapting, and the stage of standardized development has arrivedAt the same time, the closed loop of internet healthcare is taking shape。

Internet healthcare closed loop

The development of China's internet diagnosis and treatment industry originally began with online appointment registration, and then expanded within the scope permitted by regulation to online light consultations, online pharmacies, and internet hospitals. A person close to Medlink Group said that the incorporation of Future Doctor can, on the one hand, expand the total number of doctors, and on the other hand, provide an offline service fulcrum for Medlink's online business.

At present, many internet hospitals in China are severely homogenized, with most focusing on providing online consultations. Medlink intends to avoid competition at the level of consultation and inquiry, and instead develop toward full-process management with higher technical thresholds and greater integration difficulty.The incorporation of Future Doctor this time is a bold attempt by Medlink Group to connect the closed loop of internet healthcare.

According to statistics from the National Health Commission, as of2021year6month, China's internet hospitals exceeded1600home. The previously considered restricted online sales of prescription drugs are also being conditionally opened up, and eligible internet medical services can be included in medical insurance coverage. According to CCTV News, with artificial intelligence,5Gthe development of technology, telemedicine has been widely applied. Currently, telemedicine has covered all prefecture-level hospitals and nearly 90% of county-level hospitals.

Healthcare is a heavily regulated industry, and previously regulation on the hospital side was stronger than online healthcare. Now, online and offline regulation is converging. Because, whether online or offline, patients' needs are always the same: safe, reliable, and effective diagnosis and treatment.

This year's10month27day, the National Health Commission publicly released the "Internet Diagnosis and Treatment Supervision Rules (Draft for Comments)", listing detailed provisions on medical institution supervision, personnel supervision, business supervision, quality and safety supervision, and supervision responsibilities, emphasizing prescription before medicine and first consultation offline, and also clearly proposing to prohibit using medicine to support doctors.

If this draft is implemented, it means the development threshold for the entire industry will be greatly raised, and the industry will enter an era of more standardized operation. Those lacking doctor accumulation, usingAIto replace diagnosis and treatment and prescribing operations will be hit, while those professional platforms with sufficient early technical accumulation and a complete compliance system will have a better chance to stand out in competition.

Entering deep water zone

The internet has rewritten many industries, but it is especially difficult in the healthcare field.

The internet has overturned many consumption scenarios. For example, shopping has moved online, with over7hundred million people choosing various home appliances, clothing, and even cars from computers and mobile phones each year, while platform companies such as Alibaba, JD.com, and Pinduoduo have risen; the combination of the internet and the travel industry has changed people's habit of hailing taxis on the road, and platforms such as Didi and Uber have risen; now hundreds of millions of people choose meals and pay online, driving platforms such as Meituan and Ele.me to grow bigger.

Once, investors and entrepreneurs hoped that similar disruptive changes would happen in the healthcare field. But this expectation has been proven by facts to be too optimistic. The speed of integration between the internet and the healthcare field is far slower than in shopping, travel, and other fields. Ernst & Young research report "China Internet Healthcare–Dawn Appears" believes that“China's internet healthcare development to date has basically transferred the three links of offline diagnosis and treatment, dispensing, and payment to online, and the business models and strategic paths of each link are still being explored. At present, no good profit model has been seen.”

Where is the bottleneck of internet healthcare?

The "Internet Diagnosis and Treatment Supervision Rules (Draft for Comments)" points out that the positioning of internet healthcare is in healthcare, and returning to the essence of healthcare is the foundation for the development of this industry. The EY report also believes that China's internet hospitals should be value-driven by patient needs, rather than by hospitals or the government, and only by setting application scenarios based on patients' real needs can China's internet hospitals truly play their role.

2020The COVID-19 pandemic in 2020 prompted public hospitals to actively carry out online services, while patients' online diagnosis and treatment behaviors and drug purchases surged. At present, the internet healthcare industry will enter a stage of development driven by user demand.“Users will pay more attention to service quality, and doctors will also treat the internet as a real work platform.”

Internet healthcare has gone through the stages of online registration, online consultation, and drug purchasing. With the arrival of an aging society, in the next decade, chronic disease management may become an important direction. Medlinker also in2018turned its business to chronic disease management in 2020, and that year opened the infectious disease department of its first internet hospital and launched a hepatitis C patient management system.

The huge number of chronic disease patients in areas such as diabetes, kidney disease, and hepatitis need regular follow-up visits and long-term prescription renewals. Compared with traditional chronic disease management methods, the internet chronic disease management model can achieve tiered diagnosis and treatment, improve compliance, lower the threshold for medical visits, and optimize medical diagnosis. It can not only convenience patients and doctors, but also ease the bearing pressure on hospitals. Chronic disease management and even health management are important engines for the future development of internet healthcare.