In our previous blog article we looked at the ways quick service restaurants were accelerating expansion in digitalization to adapt to post lock down digital trends to sustain customer loyalty. In this article, we examine how online hospitals providing digital healthcare services grew in popularity during the crisis, and how new patient behaviors might influence the future of the healthcare industry, both in China and elsewhere.
Before COVID-19 crisis
Before the recent crisis, Digital Health in China had moved slowly. Although online hospitals had been running for almost five years, the availability and readiness of the technology had been insufficient to change patient behaviors. Indeed, more than 95% of patients still preferred to visit doctors offline for consultations, even for minor illnesses. And 85% of chronic disease patients were still visiting hospitals to refill prescriptions on a regular basis .
During the Covid-19 crisis
Post the outbreak, in the same way that digital consumption has accelerated in other areas, adoption of online hospitals has also rocketed. For example, in just five days in January, Alibaba’s online hospital Ali Health received over 1.6 million requests, with more than 1,000 licensed doctors answering users’ questions and offering consultations across various treatment areas. Alibaba is one of the large hi-tech groups that have dominated the nascent digital heath sector in China under separate healthcare brands. Likewise, JD.com’s online hospital JD Health saw an average 100,000 requests each day during the Spring Festival, with 60% of requests answered by a respiratory doctor.
Using Digital Health in the pandemic response
The immediate challenge in China was to create enough capacity to treat critical COVID-19 patients by reallocating medical resources from other areas, while maintaining enough capacity to deal with non-COVID medical emergencies.
The Government promoted online pre-diagnosis and consultation for COVID-19. At the same time, with other patients hesitating to go to hospitals for consultations or regular screening for fear of cross-infection, many hospitals suspended non-COVID treatments.
This is where online hospitals, a technology long seen as one of the most promising solutions to China’s overburdened healthcare system, played a critical role during the lockdown.
Just before the lockdown, the major players anticipated the urgent need for more online consultations. In a matter of days, they had set up the necessary functionalities and infrastructure to manage a surge in COVID-19 related cases. More than 10 online hospitals dedicated to pre-diagnosing COVID-19 sprung up in a few weeks.
Some public hospitals also offered basic digital services via a WeChat public account (WeChat mini program) or with their own app. For example, Ruijin Hospital, one of the largest public hospitals in Shanghai, with a specialist COVID-19 department, offered online services via its WeChat public account.
The objective of these online hospitals is to complete the entire health service cycle online, from consultation and pre-diagnosis, to online ordering and payment of medicines where applicable. Further, a delivery service is integrated with the hospital app and executed by one of China’s home delivery giants.
During the outbreak, online hospitals primarily took on COVID-19 cases to assist frontline medical personnel with patient screening and classification. In addition, the online hospitals provided consultations for many non COVID-19 patients. With the help of visuals, such as pictures and videos that patients posted online, doctors offered preliminary diagnoses and suggested prescriptions (directly prescribing online for first-time patients is not allowed), as well as advised on next steps, such as examinations at physical hospitals.
Although only a pre-diagnosis, the medical nature of the online consultation and recommendations were governed by existing legislation and controls, notably for:
- Online diagnosis and treatment administration
- Online hospital administration
- Long distance healthcare service administration
These continue to guide online hospital practice in areas such as the requirements of online hospital set up, treatment areas, responsibility, patient confidentiality, data privacy and security. The legal responsibility still lies with the hospitals for any potential accidents, and online hospitals must be licensed to allow doctors to conduct consultation and pre-diagnosis via online platforms. These platforms are built with multiple layers of encryption and are expected to provide transparency with regards to data protection as a legal right.
More recently, the Chinese Government has also accelerated health sector transformation with a new policy enhancement for the digitalization of medical practice.
In addition, on April 7, the country’s National Development and Reform Commission announced the New Economy Under Digitalization, Cloud and Intelligence, which introduced insurance coverage on initial consultations, where previously only subsequent visits were covered.
Going beyond diagnosis – connecting the value chain
Online prescriptions quickly became part of this new Digital Health value chain, but only if a patient had previously received a prescription from a medical practitioner. Patients could then purchase medicines via online hospital platforms or from other licensed online pharmacies, with delivery by courier. With repeat prescriptions so easily available without the need to physically go to a hospital, this model was particularly effective for people with chronic diseases who could avoid the risk of hospital exposure to the virus.
A faster, simpler online payment process saw the national health insurance system start integrating with online hospital providers to reimburse the medicine costs directly.
The improved efficiency of this process helped accelerate adoption by both patients and hospitals.
Are online hospitals here to stay?
Post lockdown, patients are more familiar with the convenience provided by online hospitals. While China’s healthcare systems have gradually resumed normal operations, major online platforms still maintain a huge traffic, only witnessing a slight decrease since the return to the normal.
Rapidly evolving technology and business models might further accelerate the development of online hospitals.
At the same time, the implementation of artificial intelligence (AI), internet of things (IoT) and Blockchain solutions brings new regulatory and governance challenges. How can the authorities direct the industry’s growth in the right way? Technology will be key here too, with insurance settlement in line with localized reimbursement policy embedded in hospital apps.
However, whether the 2020 crisis marks a first step towards online healthcare services in China (and globally) being a strong supplement to traditional medical care for the long term remains to be seen.
3 takeaways for digital healthcare players
This is an unfolding situation, for which the only absolute is that the current crisis is proving a disruptive force for healthcare systems both in China and across the world. Perhaps the three most important takeaways from this situation are:
- Trust & safety will continue to be paramount in retaining changes in consumer behaviors post the lock down.
- A strong ecosystem combining healthcare, high-tech, insurance and e-commerce industries is needed to build a robust end-to-end value chain.
- Supporting authorities and positive regulatory regime that allows for reinventing business models while protecting the rights of consumers.
 Online education and healthcare in COVID-19 epidemic Shanxi Securities, February 24, 2020
 Online healthcare service witnessed a huge traffic during COVID-19 epidemic, will this accelerate the development of online healthcare service? ITtime2000, February 19, 2020
 Asia primer the era of internet healthcare, Morgan Stanley, March 25, 2020