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Episode 63 of Tech Buzz China is on the Chinese telemedicine sector, which has quickly evolved to become one of the most interesting businesses in China, especially in the wake of COVID-19. Co-hosts Rui Ma and Ying-Ying Lu focus on the underlying drivers within the complex healthcare industry. They cover topics such as the size of the Chinese healthcare system, the shortage of doctors and reasons why, and challenges for telemedicine.
Companies mentioned include Ping An Good Doctor, as well as the internet hospitals that the government has approved and that have been in operation for a few years now. Listeners will also hear from Irene Hong, an experienced dealmaker who has worked in China for 20 years and is the founding partner of investment bank CEC Capital Group, where she leads the healthcare group.
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We are grateful for our talented producers, Caiwei Chen and Kaiser Kuo. This week, Pandaily intern Song Yuning also helped with the editing process, and Jiang Hongzeng helped with our transcript. Thank you all!
(Y: Ying-Ying Lu; R: Rui Ma; I: Irene Hong)
[00:00] R: Hello, we’re back! Even though the Bay Area has instituted shelter-in-place as of this week, luckily, podcasts are one of those things you can write, research, and record, all virtually from home! We hope that you’re also staying safe and healthy wherever you are, and definitely stay inside if you can. If you’re turning in for the first time, we do have a back catalogue of 62 episodes so that’s at least another 20 hours of listening, even at 1.5x speed!
[00:41] Y: For today, we are going to try something somewhat ambitious, and that is to give you a glimpse into the Chinese telemedicine sector. One, healthcare in general is a bit of a foreign animal for us, because its overlap with tech, and we mean mostly software here, is still relatively small, compared to say, e-commerce or something. And two, because healthcare is just super complicated, in general, no matter which system you look at.
R: Yeah, I’ve lived in the US for over twenty years and I am not at all sure how the healthcare system works. All I know is that it’s super expensive and broken in many ways, but also very advanced by other standards. I’ll be honest and say that I know even less about the Chinese system, which is also a system in flux. So, all we can promise you is that we tried very hard to provide a lot of context, because we definitely needed it.
Y: A lot of context. Because it won’t really make sense unless you understand the underlying drivers. So we tried to anticipate questions you might have and answer them in advance. But since it’s really complex, and quickly evolving, maybe we bring up more questions than we answer. We hope not! But here’s to trying to unravel one of the most interesting businesses in China right now, telemedicine.
R: And we got a suggestion from a listener to start off the episode telling you which companies and concepts we’re going to talk about, so here they are, in brief, the size of the Chinese healthcare system, the shortage of doctors and the reasons why, and challenges for telemedicine as well as the recent tailwinds because of the coronavirus.
Y: As for companies, we’ll briefly talk about Ping An Good Doctor, as well as the internet hospitals that the government has approved and have been in operation for a few years now. It’s too soon to get super accurate numbers on the direct impact of the virus on their operations, but we’ll share what’s been disclosed. And, we also talked with a very experienced dealmaker in China healthcare, Irene Hong, and you’ll hear some brief comments from her.
[03:23] R: Hi everyone! We are TechBuzz China by Pandaily, powered by the Sinica Podcast Network by SupChina!
Y: We are a biweekly podcast focused on giving you a peek into what’s buzzing within the tech community in China.
R: We uncover and contextualize unique insights, perspectives and takeaways on headline tech news that don’t always make it into English language coverage. So you can be smarter about the world of China tech. TechBuzz China is a part of Pandaily.com, an English language site that tells you “everything about China’s innovation.” I’m one of your two co-hosts, Rui Ma.
Y: And I’m your other co-host, Ying-Ying Lu. We’d like to acknowledge our partners DealStreetAsia and SupChina, creator of the Sinica Podcast Network! In addition to Tech Buzz, you can also find Sinica which covers current affairs, and the Caixin-Sinica Business Brief from China’s leading business magazine.
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[04:53] Y: So, like we said, the first thing we need to talk about when we talk about Chinese telemedicine is the healthcare system itself. We thought one of the best answers on this topic — that doesn’t drag you down a rabbit hole, because it’s a really, really complex system we’re talking about here — is one by Viola Zhou on SCMP’s Inkstone, which you can find the link to in our transcript.
R: So here’s the TL;DR — China has a nationalized healthcare system that covers almost everyone, but that isn’t nearly as good as it sounds because a lot of things aren’t covered and still need to be paid out of pocket. But OK, vital things like vaccinations and infectious diseases like HIV and tuberculosis, those are covered. And, as you’ve probably heard by now, they quickly made coronavirus testing and treatment free.
Y: Those are emergency measures. Plenty of treatments still need to be paid out of pocket. We couldn’t find stats on medical bankruptcies or anything like that — it’s apparently the reason for almost two-thirds of personal bankruptcies here in the US — but there are so many stories of people stopping care because they couldn’t afford it that it’s probably not uncommon.
R: Not uncommon if it were even an option, you mean. Because for the most part, unless it’s emergency care, you actually need to pay up front, or pay a deposit, before you will be seen. As far as we can tell, 2013 was when hospitals even started piloting a pay-after program, and it had a lot of restrictions. If you failed to pay once, for example, you’d be on a blacklist, because this is like a special benefit, not something built into the system.
[06:41] Y: Right. Because the system, the network of hospitals in China, are actually not fully funded by taxpayer dollars. So they’re this odd-hybrid where some things are paid for by the state, but not very much, maybe something like 6% for the big urban hospitals, and the remainder comes from insurance and the patients. So in many ways, the hospitals need to make themselves viable business entities, while operating under the constraints of government regulation, which are many. I mean, healthcare is heavily regulated everywhere, and China is no exception.
R: So you have this thing where on paper you have 1.34 billion people, or about 95% of the population, participate in the national healthcare system. But revenues were about $300Bn, which was about 2.4% of total GDP. Big number, it seems, but actually super tiny compared to the US, which spends almost one-fifth of GDP, about $3.5Trn, on healthcare — $1.5Trn annually from the federal government.
Y: Canada, with its more purist nationalized healthcare system, sits at 11% of GDP. But you see our point. It’s like not China has the worst system, but it is really grossly underfunded. All of which explains the rapid growth in private healthcare in China. We won’t go into that today though, but maybe we talk about it when we cover insurance-tech one of these days.
R: Yeah so today we’re really going to focus on the 12000 public hospitals in China. Even though there are actually more private than public hospitals today, this surge really only happened in the last few years and most private institutions are not considered well-run and are believed to deliver subpar care, because the public hospitals remain where most good doctors want to practice. A whole episode could be devoted to the scandals around private hospitals, actually.
[08:52] Y: But the reason why these issues persist is because the public healthcare system can’t handle all the demand. A huge reason that is often cited is the lack of doctors. China has about 1.5 doctors per 1000 people, half of the average of high income countries like the US. I think this is a great time to take a pretty long detour, and explain all the social, economic and historical reasons why this is, because China has a huge gap, and it’s not necessarily getting better.
R: No, some data shows it’s actually getting worse. So let us tell you why. First things first, especially if you’re American, erase that concept you have of doctors occupying a high social status and income bracket. For those of you who’re not American, we are talking about the fact that not only are doctors highly respected here, but even entry level professionals are paid, on average, about a quarter of a million dollars on the low end, that’s your family physicians and pediatricians, to over $600K on the high end for a cardiac surgeon. That’s 5 to 10 times the salary of an average college graduate here.
Y: Not the case in China. Even over a decade ago, doctors — including my late grandmother — are not considered a high-status profession in China, and a huge, huge reason is because of their relatively low pay. How low? Well, a large scale survey showed that the starting salaries for doctors in China is about $8000 a year, which is lower than the average starting salaries for new college grads in the top 25 cities in China. And even senior doctors are paid only about $15000 a year. Now, our data is from 2018 and slightly dated, but things haven’t changed very much since then. TL;DR: Being a doctor doesn’t pay.
R: OK, but you might be thinking now, well, that’s not fair to compare US salaries for doctors to the average college grad, even though we just showed you that they are basically comparable, or actually lower, in China. The reason why we do that though is because in China, most doctors only hold a bachelor’s degree. That’s because the education system in the US and China are just totally different.
[11:19] Y: By the way, it used to be that you could become a doctor with just a vocational school diploma in place of a high school diploma, and that’s the level of education many of the older doctors in China still have. Until recently, actually, it used to be easier to get into the medical program in most colleges than the sciences, although the difference is almost negligible now. Now, the requirement for becoming a doctor is much higher.
R: But still not as high as the US. In China, you get a medical bachelor’s degree, which does take 5 years instead of the usual 4, and then you go to a hospital for a 3-year residency. That’s the common arrangement. For the 10% or so who are more ambitious and capable, however, you can go on to a graduate program, which will take you another 3 or 4 years, usually, depending on if you want to do a masters or PhD.
Y: If your goal is to work at a top hospital, then pretty much you have to go this graduate degree route these days. Like Li Wenliang, the eye doctor who tried to warn his classmates about COVID19 and was reprimanded instead. He got a masters degree. But imagine this — you are going to school for something like double the time of other people and getting paid way less than many professions, such as your classmate who’s now a programmer, for example, and you work probably worse than 996 hours. What’s the incentive to become a doctor?
R: You probably work much longer than 9am to 9pm 6 days a week, actually. Being a doctor is actually so crappy that nearly half of doctors do not want to see their children become doctors, and historically, it’s been as high as almost two-thirds. But it’s not just the pay and the long hours. It’s a few other things too, like just a huge amount of distrust, and yes, the threat of violence.
[13:18] Y: All of which could be traced back, many think, to the low pay. So here’s what we mean. For a lot of the last decade, doctors had a PR crisis in China, fairly or unfairly. The two headline issues were corruption and medical malpractice, to use words easier to understand here in the West. The corruption one is simple — patients felt like they had to bribe doctors to either get seen at all, or get quality care.
R: Not enough doctors, and too many patients, so people were paying under the table to skip ahead in the queue. Then people were concerned that doctors wouldn’t do a good job unless they got paid extra. The level of trust in doctors to do their duty was so low that in 2014 the Ministry of Health had a formal decree stating that doctors and patients in tier 2 and above hospitals must sign an agreement refusing to give or receive red packets AKA 红包 or expensive gifts.
Y: Are doctors going to let you die on the operating table because you didn’t pay them extra before the surgery? No, that’s probably not the case, but with life or death on the line, people didn’t want to take the chance, and it didn’t help that a lot of scandals came to light of doctors being bribed by pharmaceutical companies to over-prescribe, or maybe wrongly prescribe, and compromise the Hippocratic oath for a few extra bucks.
R: Probably not a few extra bucks. More like thousands or tens of thousands. I mean, it’s not like this is a Chinese-only thing, because apparently 95% of US physicians take some kind of gift or bribe from the pharma industry, but they are mostly the harmless kind, less than $100 in value. In China though, the quid pro quo can be much more dangerous, as in one extreme case where the pharma salesperson literally sat in on patients’ visits and pretended to be a notetaker while what they were actually doing was writing up prescriptions … you guessed it, for their company’s drugs.
[15:33] Y: Which brings us to our next point. When you don’t believe your doctor tried their best to save you, well, there’s bound to be 医疗纠纷, or medical disputes. Unfortunately, in China, this sometimes led to violence. Over 60% of doctors surveyed have experienced medical disputes, and over half of doctors said they had experienced verbal abuse. So, you’re not just lowly paid, worked to the bone, and distrusted, but you’re also verbally abused. Great.
R: Not just verbally abused. You might actually be physically attacked. It’s so common in China that there is a term for it, called 伤医, which means, hurting the doctor. One survey claims that on average, a hospital can expect to experience 27 instances of violent cases per year where doctors are physically attacked, usually with knives. There are something like 100,000 incidents reported every year, though of course mostly not fatal.
Y: You can’t own a gun in China so yeah it’s mostly stabbings and literally beating people to death. Really scary. Again, it’s not like this is unique to China, the US also has this problem, but you can see that this is an additional really really undesirable aspect of going into the medical profession in China. Which is why you see young people exiting the industry at a high clip, resulting in a quickly aging profession whose talent pool is not being replenished and is in fact being depleted.
R: But we’ll try to end this little detour on a high note. We talked about all the problems associated with being a doctor in China, and that’s just a small piece of the healthcare system — there are just a lot of large problems that will take some time to fix. In the near term though, interest in and appreciation for doctors are at an all time high, because of their heroic, near superhuman efforts during the covid19 epidemic. For example, medical dramas are drawing their largest viewerships ever. I know it’s just TV, but you never know, maybe this is the boost in trust that the profession needs, and Chinese society agrees as a whole to pay doctors better. That would be a really great start.
[17:53] Y: So — onto the topic of telemedicine, which is a sector the Chinese government has been trying to encourage. You see, it’s not just that China doesn’t have enough doctors, but that the insufficient number of doctors it has is not spread out evenly. Another little mini detour here to explain the hospital system in China. There are three tiers of hospitals in China, tiers 1 through 3, and unlike when we talk about cities where Tier 1 is the largest and most developed, in the case of hospitals, tier 1 is the lowest, and tier 3 is the highest.
R: You can think of it like hotel star ratings. Each tier has a strict requirement on number of beds, size of hospital rooms, ratio of nurses, types of machines available, an organized and effective administration, published research, stuff like that. Within each tier there are either 3 or 4 grades, for a total of 10 grades, except, to make it extra confusing for you, no hospital occupies the topmost grade, so it’s just tier 3 grade A or 三甲 as the best, followed by tier 3 grade B, and then all the way down to tier 1 grade C.
Y: If you have some kind of serious condition, you definitely want to be seen at a 三甲 hospital, but there are only 1400 or so of these in China, predominantly in the big cities. Luckily for Wuhan, actually, it had one of the highest per capita in China. But if you live somewhere rural, you’re out of luck. Your local hospital probably lacks the right specialists, and also the right equipment. But as a first step, just getting a high quality diagnosis might be impossible.
R: Which is why according to the government, the patient first cares about access to specialists, and then secondarily, the cost. After all, you can’t even assess whether or not you want to proceed with treatment if you don’t know what the condition is. Which is why the first regulation to address telemedicine came out in 1999, and was pretty clearly only for 会诊, or expert consultations between doctors. The goal was to direct people to the lower tier hospitals and clinics as a first line of care, and then only when the problem required it, elevate it to a tier 3 hospital.
Y: Right. You’re involved, but it’s really mainly a dialogue between your physician and the specialist. A typical session would be for 30 minutes at a time, with most of it reserved for the primary physician, but at least 5 minutes for direct dialogue between the specialist and patient. There are whole businesses built on consulting overseas specialists, by the way, especially for diseases like cancer where China has much worse survival rates. This is basically a “second opinion” business. Unfortunately for the government, many people continue to seek 三甲 hospitals for everything, maybe because these institutions were too successful at marketing themselves, resulting in continued overcrowding at the tier 3 hospitals.
[20:57] R: A really unfortunate reality but one that probably won’t go away any time soon. In any case, in 2013, the government began to talk about what we really understand as telemedicine today, which is getting treated by a physician entirely virtually. Mixed in with the government’s goals though are also medical education, supervision, including surgeries, and remote diagnosis using digital medical results. Again, understand that this isn’t just a cost and time issue, but an expanding access issue, which must address expanding supply. More doctors, better doctors, first, before thinking about patient convenience.
Y: These rules were expanded and clarified in 2014 and 2018. But there is one key difference between the US and China. In the US, you can now sign up for a telemedicine appointment without ever stepping foot first in a physical clinic. In China, you could not. You had to visit an offline hospital first. You could then use telemedicine for follow-up examinations, treatment and prescriptions, but only for common and chronic illnesses.
R: Which brings us to one of the first internet hospitals in China, the Guangdong Province Internet Hospital, or 广东省网络医院. Approved in 2014, it is a collaboration between a hospital, some pharmacies, and a tech company. When it first began, participating pharmacies offered a station with a camera and internet-connected computer where patients could sit down and see a doctor remotely. The scope of care was limited to about 50 common and often chronic conditions where the prescription is well-known and obvious.
Y: Even though a well-known public hospital was behind it, patients were initially very skeptical. So the way they onboarded folks? All using offline channels. Remember, pharmacies were a big part of this internet hospital. So pharmacists at participating pharmacies would tell patients who fit the criteria to try it out. Of course, they then made money on selling the prescription. Three and a half years after opening, this virtual hospital was seeing 33,000 patients a day.
[23:11] R: Obviously, these guys weren’t the only ones to see the opportunity. So since this is just Part 1, we’ll talk about just one company briefly, and that is, according to most people anyway, the leader in the sector, Ping An Good Doctor 平安好医生. Good Doctor is owned by Ping An, a conglomerate that ranks 29th on the Global Fortune 500. Its full Chinese name is 中国平安, or Ping An of China, but are the same characters for “May China be Safe.”
Y: It’s actually the world’s largest insurer at almost $200Bn in market capitalization today, and $150Bn so in revenues. And it owns 41% of Good Doctor. Which kind of explains how Good Doctor was able to raise a $500mm Series A one year after launch and another $400mm from Softbank Vision Fund before going public on the HK Stock Exchange in what was the largest IPO to date for that year, at least until Xiaomi broke the record a few months later.
R: That was in May of 2018. It’s been almost two years since then and we now have the 2019 annual report, so we can see if this company that promised China a digital health revolution is doing just that. First, the company is currently valued at about $8.5Bn, about the same as pre-virus levels, actually, after going up for a bit. It’s still loss-making, although losses have narrowed versus the year before. 2019 revenues came in at about $700mm, and losses at about $100mm.
Y: What was also about $100mm, actually just over $110mm, was the telemedicine part of its business. That’s right, not even 17%. That’s probably why even though it likes to emphasize the telemedicine and other “advanced” tech solutions it has, in press releases it refers to itself as a “healthcare ecosystem platform.” Becauses it really is a hodgepodge of things. Let’s talk about the non-telemedicine part first.
[25:21] R: Well, the biggest revenue contribution for Good Doctor comes from its healthcare ecommerce business, which is exactly what it sounds like, selling Chinese and Western medicines, nutritional supplements, devices, fitness equipment, and other miscellaneous stuff. This was about one-third of total revenues for the first half of 2019 but more than tripled from the period before. The smallest is its advertising segment, which is negligible.
Y: Almost as big as ecommerce is its consumer healthcare segment, which is pretty much just the selling of standardized services that are more preventative or elective in nature, such as health checkups, genetic testing, plastic surgery and cosmetic treatments, dentistry, and the like. Good Doctor farms this out to offline clinics it partners with. Most of this stuff continues to be sold through Ping An Insurance related channels, so this really isn’t a very valuable part of the business.
R: And now, onto its core business, the 17% or $110mm. This is the Family Doctor unit. Ping An Good Doctor decided to go a premium, capex-heavy route, meaning that it chose to hire its own doctors, bringing them completely inhouse, versus working with an existing hospital. And the services offered are 24/7 consultations, second opinions, and making appointments at actual offline hospitals. Not bad. However, the customers were primarily from Ping An parent co’s insurance business.
Y: And by primarily, we mean effectively all. In 2017, the last year that a breakout was disclosed, 97% of customers from this segment came from Ping An. And before that? 100%. In fact, the Ping An Insurance part of the business came with a Service Level Agreement. So Good Doctor was just charging a fixed service fee from Ping An to service a portion of its insurance customers regardless of how many users there were or how many times they accessed the service.
[27:27] R: Right. As the number of users grew, the gross margin on the business dropped from over 70% to barely 40%, and might have dropped further if the company didn’t renegotiate the contract in 2019. So, this might be a stable business, but it’s not a very attractive one. Enter Private Doctor 私人医生, the company’s new product that they pushed out in the second half of last year.
Y: You pay an annual membership fee of $70 to $281 to consult medical specialists. The network has 800 ones from 三甲 hospitals, and 1000 overseas experts. And remember, Good Doctor has its own staff of over 1,000 doctors. They’re going after the 200mm or so Chinese middle class, the folks like you or me who can afford to spend a little bit more to get slightly better care.
R: 1,000 doctors though, that’s enough for 24/7 service? Well, yes, if you add AI, apparently. According to Good Doctor, as of two years ago, 95% of the visits were already AI-assisted. That increases the output by doctors by 100x, or so they say. Again, recall that telemedicine in China is still just for common and chronic conditions, so, I guess? Not a totally crazy statement.
[28:54]Y: And how has the coronavirus changed everything? Well, it has, and it hasn’t. In many ways, the coronavirus came at a time where government policy already became much more open to telemedicine. For one, late last year was when the government announced that virtual consultations would be part of the national healthcare insurance benefits, and provinces began to pilot their own programs.
R: Obviously, the virus has accelerated everything. On March 2, the government issued a statement clearly including internet digital health services within the national insurance system. They also explicitly encouraged innovations in medicine delivery, by the way, which is going to be awesome for the e-pharmacy industry, but which we’re not gonna be able to cover today.
Y: Most importantly though, the virus has made telemedicine the safe choice. In this unique situation, it’s no longer a matter of cost, time, or access, well, maybe time and access somewhat, because the hospitals were overwhelmed, but also a matter of risk. We spoke to Irene Hong, who’s lived and worked in China for 20 years and is the founding partner of CEC Capital Group, an investment bank in Beijing, where she leads the healthcare group.
I: Traditionally, the Chinese really value the doctor-patient relationship and wanted to go to the really large, tier 3, the 三甲医院 to see the best doctors, and they really valued, I think, that interaction. And while telemedicine is a growing industry in China, I think it really didn’t get as much as I think during this coronavirus. Now obviously people don’t want to go to the hospitals, they’re very frightened about any sort of possibility of getting infection at the hospital and so they are turning more and more towards telemedicine, as well as online pharmacies doing deliveries versus having to pick up meds at the hospital.
These sectors, there’s sort of a new shift in paradigm for a lot of theindustries and with regards to healthcare of course the telemedicine and the only pharmacies will be seeing enormous growth.
[31:10]R: As expected, Ping An Good Doctor experienced a 10x uptick in registrations during the epidemic, with over 1.1 billion visits made to the platform. Impressive considering the app was already at over 300mm registered users at the end of 2019 though, and 67mm MAU. But it is also true that monthly paying users was just 3mm, and that should be counting everything, not just telemedicine users, but probably ecommerce users too.
Y: The Private Doctor program too, sold over $40mm worth of membership on its first day, and some are pretty enthusiastic about its future prospects. Others are less so, given that most hospitals in China make more money off of the prescription drugs than giving a diagnosis, which can be priced as cheaply as $3 for a 15 minute appointment, plenty sufficient for common ailments.
[32:07] R: After hearing all we shared with you this week, what do you think? Before you answer, let’s go over quickly what we covered. Remember that China has a national healthcare system, into which people pay taxes. It expends about $300Bn per year, to use round numbers, and covers 95% of the population. So far, cash in exceeds cash out, so it’s got positive cashflow.
Y: Good thing too, because the government has directed that the healthcare tax be reduced by half for as long as five months to cope with the epidemic, so you can imagine, huge cut to tax revenue and increased near-term spend, but businesses need these $20Bn savings, so at least based on last year’s P&L, it looks like the government will still be OK, and the healthcare system won’t be bankrupted.
R: But also we told you that the healthcare insurance coverage is pretty basic. And that there is a 3-tier system in China, and people tend to want to visit the top grade hospital because they don’t trust that they can get good care elsewhere, leading to severe overcrowding in this tier. Well, not just in this tier, but definitely especially in this tier, where you find all the best specialists.
[33:22] Y: The government’s been doing a lot of work on that, and trying to spread out the demand more evenly, and it’s trending in the right direction, although I wouldn’t say it’s working just yet. But even more basic than evening out demand is the lack of supply. There are just not enough doctors in China, and it’s a combination of lots of things, but some of the things we discussed were, low pay, long hours, and threat of violence from patients.
R: I think medicine is a hard profession everywhere, but at least in the US the pay makes up for it. Not so in China. So this lack of doctors, as well as uneven distribution of doctors, with the best doctors in the cities, has made telemedicine a really attractive solution for China. Which is why, since 1999, virtual expert consultations have been legal and encouraged. Which is why over 13000 institutions have this capability in China.
Y: But that’s just consultation involving your physician asking a specialist for advice. Only in 2014 with new rules did the doors open for diagnosis and prescriptions, but with big limitations — only if the patient has been to an offline hospital first for chronic illnesses, or for certain other common illnesses. This resulted in some entirely virtual hospitals that were often the collaboration between an existing hospital and a tech company.
[34:54]R: However, these were mostly operated as individual hospitals, not tech platforms designed to scale. An example of a platform would be Ping An Good Doctor, a publicly listed company and subsidiary of Ping An Insurance, the world’s largest insurer. Good Doctor has a consultation platform where you can conduct basic telemedicine tasks as we’ve described. If you go to our transcript, we’ve linked how it works, but it’s basically text, voice, or video, nothing crazy.
Y: The doctors are aided by AI though, so their productivity is higher. What kind of AI? We don’t know, but from the looks of it, at least a chatbot. But this has yet to really take off like a rocketship in China, partly because it was only recently that virtual consultations are included in the national health insurance. And so despite really touting this as their core business, it only made up 17% of Good Doctor’s revenues last year.
R: Two tailwinds though, giving people some confidence. One is the rising middle class, who are going to want a better healthcare experience than what’s currently available. That’s why Good Doctor’s new subscription only Private Doctor service sold hundreds of thousands of memberships the first day it opened. The other is the coronavirus epidemic, because visiting hospitals means putting oneself at risk for infection, so many many more people were open to trying telemedicine instead. 10x more than normal, actually.
Y: Want to know more about this industry? Tune in for the next episode, where we’ll talk about Good Doctor’s competitors and how they differ. And let us know what you think of this episode!
[36:35] R: OK, that’s all for this week folks! Thanks for listening and don’t forget to write us that review. Have any questions? Email us! We really enjoyed putting this together, and we are always open to any comments or suggestions. You can find us on twitter at thepandaily, at techbuzzchina, and my personal Twitter account is RUIMA.
Y: And my Twitter is spelled GINYGINY. Tech Buzz China by Pandaily is powered by the Sinica Podcast Network on SupChina. Pandaily.com is an English language site that tells you “everything about China’s innovation.” Our producers are Caiwei Chen and Kaiser Kuo. Thank you for listening!