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The rise of telemedicine in China

by Tom Pattinson
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After much initial scepticism about telemedicine, the Covid-19 outbreak has brought the format front and centre. Mainstream adoption, private investment and government support means it’s here to stay, writes Tom Pattinson

The Covid-19 outbreak that spread around China at the start of the year – and the subsequent lockdown that kept people away from overcrowded hospitals – shifted the traditional Chinese notion of what healthcare is.

Unable to get to hospitals and be seen by doctors in person, patients of all ages turned to their smartphones in a bid to get the healthcare help they needed. Traditionally, patients in China have preferred to see a doctor face to face, ideally in a hospital setting. This is partly because they are aware many doctors outside of hospital environments don’t have many qualifications – most don’t even have a bachelors degree – but also because, according to traditional Chinese medicine, a doctor needs to be able to take the pulse of a patient before they can properly diagnose them.

Until recently, telemedicine was only a fledgeling industry. Even in tech-savvy America, a study showed that 82% of consumers did not use such services prior to the outbreak. In China, numbers were similarly low. The virus changed all that overnight. Both the public’s desire for medical consultation and the government’s need to offload the healthcare burden created a perfect scenario for this fringe offering to jump right into the mainstream.

One of the major players in this new market is JD Health – a subsidiary of the e-commerce platform JD.com. Not long ago, they were unknown to all but a small number of healthcare professionals and private patients. Earlier this summer, 1.6 million people tuned in to a livestream talk by one of the platform’s top cardiologists.

According to traditional Chinese medicine, a doctor needs to be able to take the pulse of a patient before they can properly diagnose them.

The platform’s consultations have risen tenfold since the outbreak, the company’s CEO, Xin Lijun, claimed. Xin told the Economist that he believes the outbreak moved the telemedicine market forward by five years.

But that doesn’t mean it wasn’t already expanding rapidly. Ping An Good Doctor, run by the major insurer Ping An, said that it already had 300 million registered users in September 2019 – months before ‘Covid’ was even a word people knew.

However, most of these 300 million users were registered to simply book appointments with specialists in hospitals rather than being there to engage in online appointments. Many more of the estimated 1,000 registered telemedicine apps also limit their service to just booking appointments or delivery of medicines.

The online healthcare market is now expected to be worth 200 billion RMB, according to Beijing consultancy Analysys. A significant growth on that 158 billion RMB that was expected pre-Covid.

China’s healthcare system reimburses patients for the drugs they buy from doctors. However, pre-Covid, the national health insurance scheme didn’t make reimbursements for drugs bought online or through telemedicine apps in all but the rarest cases. Online doctors were also not permitted to write prescriptions, only re-issue repeat prescriptions. The government has been cautious about how much authority online doctors can have, in a still under-regulated digital environment, where fake medicines and even fake doctors are not unheard of. Even as recently as 2017, a government policy paper recommended that online hospitals be shut down.

Even as recently as 2017, a government policy paper recommended that online hospitals be shut down.

However, in 2019, the government started to lift the bans on online hospitals, allowing some sales of prescription drugs. By February 2020, China’s Ministry of Health had said internet-based hospitals could fully diagnose and treat patients, and were actively encouraging the public to receive online consultations. Reimbursements as per the national health insurance schemes were also introduced in many major cities including Shanghai and Wuhan. The floodgates were opening.

Many of China’s major tech companies have been quick to fill the void. JD.com’s JD Health, Alibaba’s Ali Health and Tencent’s WeDoctor dominate the landscape and have attracted new users through free consultations and online clinics. In a further bid to gain good will (and sign ups), Ping An’s Good Doctor dispatched free masks, and Dingxiang Doctor’s real-time heat tracker tracked Covid-19 patients across China and attracted 2.5 billion views. The big companies are spending well to attract new audiences and make their mark on the sector. Bringing in new customers – especially the older communities who would not usually turn to their smartphones when sick – will likely prove lucrative in the long run.

“Historically, automation tends to happen when economic difficulties coincide with maturing technologies,” says AI expert Kai Fu Lee. “Companies feel they need to cut costs by slashing jobs and trying out new technologies. And once a company has replaced an employee with a robot and proven its efficacy, it is unlikely to go back.”

Not only will it reduce hospital wait times and increase convenience – especially for rural patients – but telemedicine will also lead to an increase in trust in local doctors who play a GP type role. Experts expect that half of those who have downloaded and used a telemedicine apps during Covid will continue to use them after the outbreak is over.

A major take up of telemedicine could also lead to lower medicine costs  as more middlemen are removed from the supply chain and the big buyers such as Ali Health and Ping An Good Doctor can buy in bulk. This, in turn, might reduce private insurance costs or provide a new offering of e-medicine insurances. The potential for this lucrative sector has seen the stock prices of companies skyrocket. Ping An Healthcare and Ali Health’s share prices are up by 33% and 74%, respectively.

There are still issues around doctors lacking qualifications and the fact that it is harder to diagnose patients without seeing them in person. Providing quality controlled medicines and ensuring there is a suitable infrastructure in place to deliver them safely is key. Regulations need to be imposed by the government to allow reimbursements for telemedicine users. However, as the popularity and trust in telemedicine increases, this will start to fall into place. Government support and regulations to ensure safety are imperative. But when implemented, it will take a huge strain off the ailing hospitals and their under-resourced staff.

Both the CDC and WHO are advocating for a wider use of telemedicine, and for early winners in this market place the scope for growth – just like the diseases it was popularised to stop – will not be limited by national borders.

Watch CBBC‘s recent webinar with Cisema to learn more about telemedicine or contact CBBC‘s healthcare leads jamie.shaw@cbbc.org or wendy.wang@cbbc.org.cn for more information. 

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