stethoscope reading on touch screen

Building a Successful E-hospital Industry: Lessons from China

August 24, 2021

The COVID-19 pandemic has popularised telemedicine around the world. For many markets, this was brought about by an urgent need to respond to new challenges, such as forced suspension of outpatient services. However, in China, e-hospitals were already widespread prior to the outbreak of COVID-19, with the global pandemic only providing further impetus for their development and continued adoption.

E-hospitals, also commonly referred to as internet or virtual hospitals, offer remote medical services via internet enabled technologies. While some countries, including the UK and France, view e-hospitals as a possible alternative to brick-and-mortar ones, others, including Germany, Russia and China, regard them as supplementary health care services. China specifically prohibits initial diagnosis or treatment via internet, whilst allowing virtual follow-up visitations and online prescriptions.

China’s first e-hospital opened in Guangdong province in 2014. After the Chinese government confirmed its support for the development of virtual health care in 2018, their numbers started to steadily increase, reaching 158 in 2019. It is likely that even without the pandemic the e-hospital industry in China would have flourished, but COVID-19 has notably accelerated its growth. By mid-2021, the number of internet hospitals nationwide jumped to 1,600.

The demand for virtual health care was also substantial in China in pre-pandemic years. In 2018, a survey on global views on health care showed that China had one of the world’s highest usages of telemedicine with 25% of Chinese respondents stating that they had used telemedicine versus an average 10% globally. At the start of the COVID-19 pandemic, the number of people searching for online medical consultations in China experienced further growth, increasing almost tenfold.

Why did the e-hospital model become so widespread in China even before the COVID-19 pandemic? The answer to this question might help other markets to understand the necessary ingredients for a virtual hospital industry to take off. In China, several push and pull factors contributed to the spread of the internet health care.

Factors Helping to Develop E-hospitals in China:

  • E-hospitals help to address problems in China’s legacy health care system, including regional disparities in resource provisions and congestion in large urban hospitals. Like elsewhere, China suffers from a scarcity of medical facilities in rural areas, which often forces rural populations to travel long distances to visit medical practices in nearby cities. This overwhelms many urban hospitals, especially in China’s largest cities such as Beijing and Shanghai, with some doctors seeing as many as 200 patients per day. E-hospitals tackle these issues, eliminating the need for many to frequently travel to see a doctor in person.
  • The Chinese government has launched a number of early initiatives to support and standardise the virtual health care sector. Since 2014, the government has provided the necessary regulatory support to enable the e-hospital industry to take shape. Notably in 2018, China’s State Council introduced several key policies that formed the basis of the legal framework governing China’s virtual health care. In 2019, the National Health Care Security Administration (NHSA) also allowed for internet-based medical services to be covered by the country’s medical insurance system. This early and substantial policy support has promoted the standardised development of the industry.
  • China’s e-hospitals have benefited from a well-developed technology infrastructure. Despite being the most populous country in the world, China boasts an elevated level of internet and mobile penetration with more than 65% of the population enjoying access to both. The government’s recent extensive 5G rollout, covering even remote regions, is likely to further improve these adoption rates. This readily available infrastructure has helped both health care providers and patients to quickly adapt to offering and using online medical services.
  • China’s innovation ecosystem has facilitated the spread of the e-hospital model. The government’s push for technological development coupled with a large number of private high-tech companies bringing innovation to the market at a fast pace has helped to enable Chinese citizens to quickly adopt and adapt to innovations. This ecosystem has also provided the necessary resources such as mobile platforms and cloud services for hospitals to migrate online.

The e-hospital industry has great potential to both improve patient experience and provide greater and more equitable access to medical services. China’s experience illustrates that coordinated efforts on the part of health care providers, the government and the private sector are needed to push the industry forward. Therefore, it is important for organizations that are willing to help expand their market’s e-hospital sector to underline in their messaging how they can make a positive contribution to the development of the industry; understand how they can benefit from government incentives; and explore opportunities to create partnerships and become fully embedded in their market’s developing e-hospital ecosystem.

APCO Alum Sam Jones coauthored this piece. 

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