China’s New Regulation on Internet Healthcare Will Benefit Platforms like WeDoctor

On 27 October, China’s National Health Commission (NHC), the authority responsible for the medical industry, issued a new policy that calls for the regulation of China’s fast-growing internet healthcare industry. The policy is expected to push China’s internet healthcare industry from the period of minimal regulatory constraints into the era of standardized development.

According to the NHC, as of June 2021, the number of internet hospitals in China has exceeded 1,600, the internet hospital is the provider of online medical services such as online consultations. The first Internet hospital in China was established in 2015 in Wuzhen, Zhejiang province by digital medical service platform WeDoctor.

This policy has generated widespread interest within the Chinese healthcare industry since its release, and the regulatory measures taken by Beijing on the education and training industry since the third quarter of this year have caused participants in various industries to be very concerned about the potential impact of the regulation. Unlike the education and training industry, the regulatory policy on online medical consultation has been well received within the industry, with the release of the policy seen as beneficial to the development of the internet healthcare industry, especially for some of large digital medical platforms that engage strictly online medical services.

The document, titled “Rules on the Regulation of Online Medical Consultation (Draft for Comments)”, states that physicians are required to authenticate their real identity before providing consultations to ensure that such online consultations are provided by the said doctor. Other people, AI software, etc. are not allowed to impersonate or replace the physicians themselves. As a result, some companies that focusing on using AI technology to provide consultation services may be negatively impacted.

China does not allow internet healthcare platforms to use consultations as a tool for the sale of prescription drugs. The policy proposes that the occurrence of unified prescriptions and prescription refills is prohibited, that the personal income of healthcare workers must not be linked to income from drugs and medical examinations, and that doctors must not designate locations to purchase drugs and consumables.

In a report published by the People’s Daily, Liao Jieyuan, founder of China’s largest digital medical service platform WeDoctor, believes that the policy has released a clear signal that online medical consultation should be of the same quality as that provided by physical institutions, reflecting China’s determination to develop digital medical services, which is essential for the standardized development and market expansion of the Internet healthcare industry.

The healthcare services and physical hospitals nowadays in China are unable to meet the huge demand of its 1.4 billion population. Platforms such as WeDoctor have leveraged technology to help alleviate the demand and supply imbalance in China’s healthcare industry.

According to a publicly released research report by CICC, with the regulatory policies for internet healthcare becoming more transparent and standardized, companies providing actual medical services with a sound regulatory compliance system are expected to benefit the most.

(Source: Bloomberg Terminal)

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