China’s Big Tech companies are using their roles in fighting world’s largest health crisis to turbocharge HealthTech

Eric Ng

On February 12, the day after Chinese President Xi Jinping sounded a clarion call for all hands on deck, during what he called “a critical stage” in China’s battle against the coronavirus outbreak, a distraught woman called out for help at the epicentre of the disease.

“I am suffering from sustained mild fever and shortness of breath,” wrote the 25-year-old, who would only give her surname Liu, from the Hubei provincial capital of Wuhan, under a citywide lockdown as local authorities scrambled to contain the rapidly spreading disease. “I am on my own, I do not dare to go to the hospital as I am afraid of getting infected.”

The message, sent via the Tencent Trusted Doctors (TTD) application developed by China’s biggest social network operator, quickly reached health officials in Wuhan’s Hongshan district, who arranged a hospital test for the single woman. TTD’s chat software, used by 17 million people since its 2014 launch, is one of the hundreds of smartphone-enabled applications and innovations that have kicked into high gear to help China beat back the Covid-19 outbreak.

During the initial days when epidemiologists struggled to find the cause and transmission path of the then little-known disease, Chinese authorities resorted to the most primitive way to block its spread, locking an estimated 50 million people under quarantine across dozens of cities. Now, as the focus of the global pandemic shifts offshore from mainland China, the country’s technology companies are using their participation in the world’s largest health crisis to turbocharge the deployment of so-called HealthTech solutions.

Workers enforcing a quarantine at a residential compound in Wuhan in Hubei province on February 13, 2020. While epidemiologists scrambled to find the cause and transmission path of the virus, authorities resorted to the most primitive measure to contain its spread, locking an estimated 50 million people under quarantine. Photo: China Daily via REUTERS

Remote access to health services, from consultations to the sales of medical products, is the entry point into the nascent, fast-expanding HealthTech market, especially in a country with the world’s largest population of smartphone users.

There are at least seven platforms in the market that connect doctors with patients. TTD, which claims to connect 450,000 certified doctors with 17 million patients in a single platform, offered online consultation to Wuhan residents – who were put into quarantine on February 11 – for a token 1 yuan, instead of the usual 49 yuan. That enabled TTD to quadruple its consultations during the first five days of the Lunar New Year, compared with the same period last year.

Doctors looking at a CT scan of the lungs of a patient undergoing treatment for a respiratory tract infection. HANDOUT PHOTO

Also doing its part is TTD’s competitor Ping An Healthcare & Technology, better known as Ping An Good Doctor, a unit of China’s largest insurer Ping An. The application’s daily sign-ups for free online Covid-19 consultations soared 10-fold between January 22 and February 6, compared with a 21-day average in January.

Asia’s most valuable technology company is also in on the rush, with Alibaba Health Information Technology connecting an average of 200 patients per day to each of its network’s specialists in respiratory diseases since its January launch for Hubei’s residents.

“As the deployment of big data, artificial intelligence and technologies related to the Internet of Things (IoT) speeds up, digital health care will emerge as the new key infrastructure of the industry,” said Gary Wang Qiang, senior vice-president of Alibaba Health, a unit of this newspaper’s owner Alibaba Group Holding. “Backed by Alibaba’s technological advantages, Alibaba Health can innovate quickly in the realms of drugs retailing, chronic diseases management, online health care and digital public health service solutions.”

Visitors to the World Artificial Intelligence Conference in Shanghai gaze at smart gadgets displayed by Ping An Good Doctor on August 29, 2019. Photo: SCMP

Digital health care solutions have long been a key application within China’s internet technology boom, even before the current pandemic changed the way people interact, live and work.

Targeting medical needs unmet by China’s hospital-centric health care system that lack primary general care, online health care platforms including 111 Inc’s 1 Clinic, WeDoctor, Spring Rain Doctor and Haodaifu Online sprang up in the past decade.

“Relative to many nations, China has more experimentation on internet hospital and online pharmacy service deliveries because of big unmet needs and hence the potential for improvement in the nation’s health care system,” said Helen Chen, head of L.E.K. Consulting’s China biopharmaceuticals and life sciences practice.

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Telemedicine is also a nascent development in the US, held back partly by the fact that physicians are licensed by states.

“It is starting to gain ground but has not taken off to the extent it has in parts of Asia, but I think it will change after Covid-19,” said Brad Loncar, chief executive of Kansas-based investment firm Loncar Investments and compiler of the Loncar China BioPharma Index.

“If you are a physician in Kansas, you would not be able to do telemedicine with a patient who is in California if you are not licensed there,” Loncar said. “Some of the telemedicine companies help doctors who actively use their service to get licensed in many states, but that is rare and expensive.”

That may change soon, as President Donald Trump said on March 13 that the US federal government plans to waive laws to enable tele-health in certain situations, and ease some federal licensing requirements to enable interstate medical care.

Preparedness for pandemics by country. SCMP Graphics

In China, lengthy waits for services have long been the features of hospitals, where health care takes up 9 per cent of government spending, less than half of the budget in Britain, Japan and Germany.

Many rural residents often make long trips to big city hospitals due to the concentration of the nation’s best medical resources there, despite health care reforms including the assignment of city doctors to rural communities.

China had 18 doctors for every 10,000 inhabitants in 2018, a fraction of the 24 per 10,000 in Japan, 26 in the US and 28 in Britain, according to the World Health Organisation. China’s doctors are also more overworked, less respected and underpaid than their overseas counterparts, according to L. E. K Consulting’s Chen.

Preparedness for pandemics by country. SCMP Graphics

To reduce hospital trips and infection risks during the coronavirus outbreak, Beijing early this month covered for the first time such online follow-up consultations for certain common and chronic diseases in the national health insurance scheme. Previously, consumers had to pay, except at one hospital in Gansu province that was conducting a pilot in late 2019 to include online consultations in the scheme, according to a Pacific Securities report.

Doctors are not allowed to arrive at a diagnosis for patients online without physical check-ups, or prescribe drugs under existing regulations in mainland China. This means most health care services are still provided offline.

To make their business models work, online platform operators typically have to build a huge national user base, from which they develop multiple revenue streams. They include general and specialist doctors’ recommendation and appointment booking, repeat consultation for chronic diseases, and online sales of drugs and health-related products.

A man wearing a protective mask walking through thermal scanners at the security check at the Capital International Airport in Beijing on 17 March 2020. Photo: EPA-EFE

While Ping An Good Doctor – China’s largest health care platform – boasts over 315 million registered users, only 3 million are monthly fee-paying users. The company is expected by analysts to earn its first profit next year, as it turns more users into paying customers for its “family doctor” packages, aiming them at the fast-growing middle-class, which is increasingly willing to pay to get faster medical services by private doctors. It is also helping government hospitals build internet hospital platforms in Zhejiang and Henan provinces to broaden its revenue stream.

Rival TTD differentiates itself through an online-plus-offline strategy that includes a large network of its own clinics. The firm was formed through a 2018 merger of Tencent Doctorwork’s online clinical platform with Trusted Doctors’ network of 450,000 online specialists and day surgery centres.

Dr. Mark Mak, Founder of Roborn Dynamics with the robot ME1 during the TDC (Trade Development Council)'s Entrepreneur Day press preview at the Hong Kong Convention and Exhibition Centre in Wan Chai on 16 May 2018. Photo: K.Y. Cheng

Besides connecting patients with doctors, technology is also going deeper and broader into the search for a cure for Covid19. Damo Academy, Alibaba’s research unit, has an analytical tool that can distinguish Covid-19 from other strains of respiratory tract infections through computerised tomography (CT) scans of patients’ lungs. A second tool cuts the diagnostics time to 30 minutes, from several hours. The analytical tools, deployed at 26 hospitals in Alibaba’s hometown in Hangzhou, are also being offered to Italy and France.

Robots have also been deployed to pick out suspected coronavirus carriers from a crowd. Hong Kong start-up Roborn Technology designed a mobile robot equipped with thermal scanners that can live-stream temperature readings to a control centre, and can send an alert when necessary. Commercial deployment at various government departments are expected soon, Roborn’s co-founder Mark Mak Hin-yu said in an interview with South China Morning Post.

Preparednes for pandemics by country. SCMP Graphics

When it comes to digitalising the health care supply chain, executives with a technology background may have different approaches from those coming from the medical field.

“Why go to hospital when you have a mobile phone? That’s a technology people’s view of health care,” TTD president Martin Shen, an Australia-trained physician-turned-health care information technology entrepreneur, said in an interview during the JP Morgan health care conference in January.

“The health care practitioners’ view is: how do I use technology to make health care delivery better?,” Shen said. “We provide an online and offline integrated health care experience.”

After raising over US$250 million from investors, TTD plans to launch a “completely integrated” family doctor services, including general and specialist care and day surgery through to dental and ophthalmology.

“Three decades ago all surgeries were performed in hospitals, now two-thirds are performed in day surgeries worldwide,” Shen said. “Redefining health care in the 21st century is our goal.”

Through greenfield projects and acquisitions, it plans to expand its network from 107 clinics currently – almost half of which in Shenzhen – to over 400 by the end of next year, Shen said. It will focus on 30 cities, within each it aims to have a “citywide” network presence, he added.

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While some rivals are expected to follow suite, he said success will depend on whether the right company culture, health care and clinics management expertise can be established.

For 111, whose founders are former senior executives at computer and e-commerce firms, digitalising the drugs supply chain will remain its focus, even though it has over 2,000 in-house and affiliated doctors providing online follow-up medical consultations and prescription extensions.

Bulk sourcing from 150 drug manufacturers, 111 also helps 210,000 pharmacies in China cut procurement and administration costs by pooling their orders through its online wholesale platform.

The start-up will invest this year to link up its platform with public hospitals in mid-size cities and towns, and offer online seminars to inform doctors about new drugs as part of its services to drug makers, said chief executive Liu Junling.

As Beijing’s health care reform resulted in faster new drugs approval and the allocation of more funding for innovative drugs prescription, he expects most pharmaceutical firms will be busy launching new drugs this year.

“One can safely bet that lots of new drugs will be launched in China,” Liu said. “If we could play a role in helping to commercialise them, we can accumulate many chronic patients, to whom we can provide mobile App-based services such as health education, medicine adherence monitoring and online drugs refills.”

Professor Anthony Ng Chi-fai from the Division of Urology, Department of Surgery, Faculty of Medicine at the Chinese University of Hong Kong (CUHK), demonstrates the da Vinci Xi Surgical System – owned by China’’s Fosun Group – at Prince of Wales Hospital, Sha Tin on 13 January 2019. Photo: Nora Tam

As the online pharmacy industry grows, regulatory issues have also arisen, such as how to ensure prescriptions presented online are genuine. To address the issue, several provincial government-run pilot prescription drugs distribution platforms have been set up to link up the hospitals’ pharmacy dispensing systems to those of online drug distributors, and 111 is “actively participating” in them, Liu said.

“There are also safety mechanisms to check the identities of consumers who uploaded their prescriptions, and most pay with online payment Apps, which provide another layer of identities authentication,” he said, adding that 111 excludes a small number of high risk prescription drugs from its offering.

The coronavirus pandemic has sickened 2244,517 people in 160 regions and countries around the world, as of Friday . Mainland China, where the disease was first reported, had no new confirmed cases for the second day, with 33 per cent of the global caseload and a third of the worldwide death toll.

For Liu, who sought help through TTD in Wuhan, it was a false alarm as her test came back negative for the coronavirus from her community hospital; it was a case of flu, combined with a panic attack, her doctor said, according to the application provider.

Additional reporting by Peggy Sito

Illustration: Henry Wong

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