Commentary

Technology Platforms Are Revolutionizing Health Care Service Delivery in China

The growth of online medical consultations by physicians at both public and private hospitals in China has the potential to improve access and efficiency, but the developments also present challenges.

  • Terence C. Cheng, PhD,
  • Hongqiao Fu, PhD,
  • Duo Xu, and
  • Winnie Yip, PhD
February 23, 2022
Summary

China has embarked on a technology-led revolution to create a brand-new health care ecosystem. This effort harnesses the capabilities of Internet enterprises with the aim of addressing persistent problems plaguing the country’s health system. In a short span of time since the government unveiled its policy strategy to develop an Internet health care ecosystem in 2018, the health care landscape has dramatically changed. In this article, the authors describe the country’s aspirations for Internet health care and document how this is transforming China’s health care delivery system.

The use of digital technologies in the delivery of health care services in China is accelerating, driven by government policy and the growth of Internet enterprises. From 2013 to 2019, the total value of new investments in China’s Internet health care market grew from Y4.5 billion (US$675 million; Y1 = US$0.15) to Y37.9 billion (US$5.7 billion).1 In November 2020, there were 54.8 million active users of Internet health care who sought online medical advice, purchased medications, and scheduled appointments with public hospitals, up from 46.9 million in November 2019, before the Covid-19 pandemic. Internet medical consultations provided nationally through Haodf.com, one of China’s largest Internet health platforms, surged during the peak of the pandemic in China: In March 2020, total service volume for texts and phone calls increased by 75% compared with January 2020, before tapering down through the course of the year. China’s accelerated progress of digital health is achieved by leveraging the e-commerce, logistics, and communications capabilities of major Internet enterprises, such as Alibaba, Tencent, and JD.com. The country’s central government committed to develop the Internet health ecosystem in an effort to address persistent problems with the country’s health system and improve the quality and efficiency of health care delivery systems and health services.2,3

In this article, we describe China’s Internet health market and illustrate how technology platforms are revolutionizing health care delivery. We utilize two unique data sources: data from the Internet portals of major four Internet health platforms (extracted using Web-scraping tools), together with billing data from one of the four platforms. While China’s Internet health market encompasses a variety of different health care services and products, we focus our discussion on the delivery of online medical consultations, as this segment of the Internet health market provides the most interesting narrative on how service delivery in the online market differs from the traditional physical market.

Third-Party Platforms and the Online Health Care Marketplace

The traditional health care marketplace is characterized as a physical space — clinics, hospitals, health care precincts (regions featuring patient care facilities as well as health care research and manufacturing sites) — where patients (buyers) and providers (sellers) meet and interact. In China’s online health care marketplace, interactions between patients and providers occur through virtual platforms that are accessible via mobile devices and computers. Technology platforms serve a distinct role as a third party to the patient-provider interaction as intermediaries, bringing together patients and physicians and facilitating transactions.4

Platforms enable the sale, facilitation, and delivery of a wide range of health care services and products including medical consultations, scheduling of hospital appointments, prescription drugs, health management information, and health insurance. Platforms also play a major role in defining how consumers and providers interact, including decisions on transaction types as well as determining provider fee structures.5 A key innovation in Internet health markets is the development of reputation systems to routinely collect and publish user feedback, assisting users to assess the quality of providers in the same way that hospital report cards do.6

Among the earliest initiatives of Internet health delivery in China was the establishment in 2015 of the Wuzhen Internet Hospital in Tongxiang City in Zhejiang province, which is a collaboration between the Tongxiang Municipal Government and Internet technology company WeDoctor Group. The Wuzhen Internet Hospital initiative pioneered the development and large-scale implementation of an online platform where patients can obtain medical advice and drug prescriptions and, when required, make follow-up appointments at hospitals. The platform provides a network that facilitates collaboration and knowledge-sharing between medical experts across different regions, ensuring that patients living in rural and remote regions can have access to the same standards of medical care as those residing in urban regions. Services of the Wuzhen Internet Hospital, which maintains approximately 20 inpatient beds, are almost entirely online. Internet hospitals are required by law to maintain a physical presence, but patients who require follow-up in-person care can do so at any public or private hospital of their own choosing.

Internet health care was seen as a solution to address persistent problems stemming from China’s weak primary care system and hospital-centred health delivery system.3 Widespread mistrust in the quality of health professionals at primary health care facilities encouraged patients to visit higher-level hospitals, exacerbating problems of overcrowding and long waiting lines.7 Internet health provides the convenience of a virtual appointment with doctors without having to visit overcrowded public tertiary hospitals. Internet care also alleviates geographical disparities in access to a high-quality health workforce.

In 2018, the General Office of the State Council released a document titled “Internet + Medicine and Health” detailing an overarching framework to integrate Internet and information technologies into health care, and to develop the Internet health care ecosystem.2 This framework sets the policy agenda on how Internet health can be harnessed to enhance the standards of health and medical management, improve resource allocation and efficiency, reduce cost, and promote the development of innovative service delivery models. Internet health was an integral component of the country’s Healthy China 2030 blueprint to fulfilling the country’s long-term economic and social development goals.8

The popularity of online medical consultations has grown considerably among both urban and rural populations. The four largest third-party platforms providing online medical consultations are Haodf.com, WeDoctor, Chunyu Doctor, and Ping An Good Doctor (Table 1).

Table 1.

Profiles of Key Third-Party Platforms Providing Online Consultations as of September 2020

Scroll table to see more
PlatformsHaodf.comWeDoctorChunyu
Doctor
Ping An
Good Doctor
HeadquartersBeijingHangzhouBeijingShanghai
Year founded2006201020112014
OwnershipPrivatePrivatePrivatePublicly listed
Active physician subscribers152,218157,61223,69532,259
Service typesOnline consults, medicinesOnline consults, medicines, insuranceOnline consults, medicinesOnline consults, medicines, health management

Collectively, these four platforms account for approximately 60% of all online consultations in China, according to unpublished industry data. In addition to consultations, these platforms also engage in the sale of medicines, insurance policies, and delivery of health management programs. Other Chinese platforms, such as AliHealth and JD Health, predominantly focus on the sale of medicines.

Accessing Care, Anytime, Anywhere

China’s Internet health care has embraced the “anything, anytime, anywhere” approach that epitomizes e-commerce’s consumer-focused environment.9 Patients usually access health services through mobiles devices via proprietary applications (apps) or Internet portals. When accessing the app or portal for the first time, patients create a user account, which gives access to a user profile showing a host of information including past and upcoming appointments, prescriptions, and medications records (Figure 1).

Figure 1 .

Figure 1

Patients can use the app to search for doctors through a search function by specifying diseases or conditions, doctors’ names, location, and hospitals. Search can also be done via a menu of options (Figure 1, Panel B). The search identifies doctors that fit the search criteria, after which patients can browse the profiles of doctors and obtain information including medical training, specialty, hospital affiliations, experience, number of patients served, and research outputs (Figure 1, Panel C). Popularity ratings and user feedback are presented, including user satisfaction (across domains such as doctors’ efficiency, attitude), receipt of virtual gifts (e.g., thank-you cards, bouquets) from patients, as well as detailed user comments. These measures serve the role as indicators of doctor quality, assisting patients in making a choice of treatment doctors.

Prior to scheduling an appointment, patients are presented options on the types of services available and a menu of prices (Figure 1, Panel D). The types of services offered vary across platforms, and include medical consultations via text or image messaging, phone, or video. Billing data from Haodf.com over the 12 months from January 1 to December 31, 2020, revealed that the majority of online consultations were conducted via texts and images (Figure 2a), followed by consultation via phone and online appointments in which patients can schedule an in-person consultation at a public hospital.

Figure 2a .

Figure 2a

Over the same period, surgical, internal medicine, pediatrics, and obstetrics are the most common specialties for which patients sought online consultations (Figure 2b).

Figure 2b .

Figure 2b

Prices of Internet health services vary by the type of service. The most common service is text and image consultations, which gives patients access to an unlimited number of interactions with their doctors via text or image messaging over a duration of 48 hours. The average price of this service package is Y65 (US$9.75) (Table 2).

Table 2.

Prices Across Platforms from Four Leading Apps

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Type of Service/PlatformAverageHaodf.comWeDoctorPing An Good DoctorChunyu Doctor
Image/text (per package)65.1089.6751.5470.9026.03
Voice (CNY per minute)8.3210.9711.924.08
Video (CNY per minute)17.5622.07

The unit price for video consultations (Y17.6, US$2.6 per minute) is higher than that of voice consultations via phone (Y8.3; US$1.2). For comparison, the average public outpatient medical consultation fee in Beijing for primary care in 2020 was Y20 (US$3.0) and Y50 (US$7.5) in tertiary hospitals. Prices also vary considerably across platforms, reflecting differences in platform and provider quality and market power, physicians’ seniority, and patients’ willingness to pay.

To facilitate the integration of Internet health into China’s health system and encourage the use of online health services, the government incorporated eligible online health services into the country’s national social health insurance (SHI) program. Online services are reimbursed at a stipulated rate for the equivalent basic service under the SHI benefits package. Fees in excess of the basic rate are paid by users as out-of-pocket expenses. As of January 2022, only online consultations delivered by public hospitals are covered by SHI; fees of physicians working with third-party platforms are not reimbursable under SHI and are borne fully by patients.

Public Hospital Physicians: The Core Providers of Internet Care

Public hospital physicians form the core of the Internet health physician workforce. Physicians who undertake Internet work concurrently with their in-person work hold full-time appointments in public hospitals, in what is often referred as physician dual practice. These physicians devote a small number of hours a week to providing Internet consultations. Although most do provide Internet services outside of the official working hours in public hospitals, Internet consultations do occur through the workday. For example, billing data from Haodf.com show that many doctors consult online during their lunch breaks and in the evenings (Figure 3), with senior physicians (i.e., chief physicians) being more likely to consult after-hours compared to junior doctors.

Figure 3 .

Figure 3

Internet health offers a range of financial and professional rewards. In addition to the opportunity to supplement their public hospital incomes, physicians can exert greater control over the patients they see, treating patients with less severe conditions online and reserving public hospital appointments for patients with more complex medical needs. Internet health work is beginning to be perceived as important for career advancement, especially among junior doctors, with doctors’ performance on Internet health platforms potentially serving as an evaluation tool for recruitment and promotion in the future. Internet health delivery is also seen as a way to develop and enhance doctors’ professional reputations nationwide, which helps in attracting more patients.

Privately owned third-party Internet health care platforms are the major providers of online health care services. Public hospital physicians work on platforms as independent contractors, can set their own fees, and pay platforms a pre-agreed percentage of their earnings from Internet health work. Since the start of the Covid-19 pandemic, public hospitals have begun to deliver Internet health care, with the number of Internet hospitals that bear the names of established physical public hospitals growing significantly.10 The emergence of Internet hospitals is changing the market landscape for Internet care as Internet hospitals and public hospitals begin to compete for patients.

An Ecosystem in the Making

As China continues harnessing Internet technologies, this is changing how health care is delivered. Some countries are adopting the model. In 2019, a telemedicine platform was established in Indonesia as a collaboration between China’s Ping An Good Doctor and Grab, a Southeast Asia super-app provider of transport, food delivery, and payment services. This collaboration combines telemedicine with the distribution networks offered through Grab’s platform.11 Similar developments are underway in Thailand.

Substantial challenges remain as Internet health care continues to expand in China. As most Internet care is delivered through private third-party platforms rather than public tertiary hospitals, the physical and virtual care delivery systems remain highly segmented. The increasing participation of public hospitals in the Internet health care space is expected to create opportunities to better integrate the physical and virtual spheres across the pre-diagnosis, diagnosis, and post-diagnosis phases of patient care. Collaborations between private online platforms and public hospitals are likely to increase in the future, further bringing the two delivery systems together.

Overutilization and costs are two important considerations. Internet health offers the opportunity to triage patients away from overcrowded public hospitals, especially for patients with health needs that are more appropriately treated in a virtual outpatient environment, resulting in more effective use of public hospital resources, and potentially cost savings. However, Internet care provided by doctors on third-party platforms and public hospitals is reimbursed via fee-for-service, increasing the risk of inappropriate use and overutilization. This can occur, for instance, through repeated follow-ups that are unnecessary. In addition, as public hospitals are required to raise up to 90% of their revenue from service provision, and given that physicians’ compensation is tied to a hospital’s profits, there exist perverse incentives for public hospital doctors to use Internet care to channel patients into public hospitals.

How Internet care is remunerated will have significant implications on efficiency, system integration, and care continuity. The current fee-for-service reimbursement system should be replaced by alternative payment models that encourage doctors to provide appropriate levels of Internet services. As China’s hospital system shifts away from traditional fee-for-service to payment methods such as global budgets and diagnosis-related groups, the remuneration of Internet care should be designed to align with how hospitals are reimbursed, with the aim of facilitating closer integration in the virtual and physical spheres, and to achieve greater continuity of care across the two delivery systems. Patients’ clinical data would be required to be shared among third-party platforms and hospitals to support the integration of care.

Another important consideration is the appropriateness of virtual care: i.e., when Internet health should be used, the types of medical conditions that can appropriately be managed in a virtual environment, and correspondingly, the types of service within the suite of virtual tools — e.g., texts, phone, video — that are most effective. This requires investments in data collection and research with the aim to provide guidance on the appropriate use of virtual care, and how virtual services should best complement in-person interactions with physicians in hospitals. There should also be guidelines on the course of action should clinicians encounter patients in a virtual environment for which Internet care is not appropriate.

In addition to cost considerations and the appropriateness of care, other domains of health system performance — such as care quality, patient satisfaction, and equity in access — are also important. The reputation and patient feedback systems on Internet platforms offer novel mechanisms for improving the quality of care and patient satisfaction. Price transparency and provider quality information permit users to compare cost and quality of different providers before obtaining care. The feedback system could, in turn, incentivize doctors to improve the quality of care they provide, both on platforms and in hospitals. Haodf.com, for example, publishes an annual list of top doctors based on customers’ satisfaction and peer evaluations, and awards are prominently displayed on doctors’ Internet profiles. These mechanisms provide doctors the opportunity to build and establish a national reputation that extends beyond the boundaries of the hospitals they work in, enabling them to attract patients.

While Internet health care offers the opportunity to improve equity in access, it throws up its own set of challenges. Equity in access can worsen when Internet health patients compete for limited public hospital appointments. Private fee-paying patients who seek online consultations on platforms can secure appointments in public hospitals either through referrals or by purchasing appointments via platforms, permitting high-income patients to access public hospital care more easily.

Monitoring how Internet health affects health system performance can inform any policy adjustments that are required, ensuring that China achieves its aspirations for Internet health care and stated health policy goals.