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China’s insurance for health

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China's insurance for health
China's insurance for health

The Chinese National Health Commission published a May report that stated that there were currently 158 “internet hospitals” in China. This system has been steadily developing over the past few years.

More hospitals in expat medical insurance in China have received internet medical licenses. Major cities and provinces are actively opening new internet hospitals outlets. Patients can log in to the WeChat account or app of their hospital for a video consultation.

It works like this: A doctor can instantly issue a prescription, and a professional pharmacist reviews it online. The pharmacy then delivers the drugs quickly to the patient’s house. You can also access the screening report online and get an electronic invoice.

Today, internet-based medical businesses are looking for breakthroughs in the payment industry and greater cooperation with insurance companies. The ultimate goal of an internet hospital business model is private insurance.

China’s concept of ‘internet-medical service-insurance’ is heavily inspired by the Caesar model from the USA. The US, however, is a country that is dominated by commercial insurance. It covers more than 40% of total medical expenses. China’s private insurance only covers 1.4% of total medical costs, while the rest are covered by basic insurance (known as Yi Bao).

Hence, why do internet medical firms still have potential? WeDoctor (WeiYi), chairman and CEO Liao Jinyuan believes this is due to the incompatibility of the Yi Bao model in China. WeDoctor (China’s first online hospital) was established in Wuzhen Zhejiang in 2015. It was created in response to the government’s request for a more accessible and sustainable medical service.

Caesar’s model works with hospitals and doctors to set the prices for the service. The contract also allows the doctor to allocate a portion of the premium to the doctors. The contracted doctor would then provide the service to the insured.

“This model is valuable for the doctor community,” said Mr Liao. This is where internet hospitals are able to play a greater role in the medical community and offer the commercial insurance competitive advantage.

Insurance companies get involved

Traditional insurance companies are also exploring similar routes due to the increasing popularity of online medical services. Taikang Life, for example, teamed up to WeDoctor’s Guahao.com (an internet medical service platform) in order to launch a special protection program. The future will see the rise of internet-based medical insurance.

ZhongAn, China’s first internet-only insurance company, obtained an internet hospital license this July. The internet hospital will be more of a bridge between patients and resources such as pharmacies, hospitals, and insurance companies. The company, which is based in Shanghai, stated that users will have a one-stop shop within the ecology stem. The two companies have created a win/win situation that encourages doctors to be more online to serve patients.

According to Zhao Yi, a senior director at Medical Cooperation and Development, ZhongAn will pay claims directly to cooperative pharmacies and medical institutions, saving policyholders the trouble of making advance payments.

Hospitals are a top investment for life insurance

Qianhai Life, a life insurance company, was the first to invest in and build hospitals in China. Many in the industry believe that the trend to establish hospitals will help promote the development of the insurance sector and eventually make it more competitive in terms of product development, medical cost control, price pricing, consumer protection, and insurance services.

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