Retail therapy

China counts on ‘sharing economy’ to aid healthcare reform


‘Medical malls’ were dreamed up in the United States in the 1980s to bring healthcare services closer to residential areas. The concept largely idled over the following decades until struggling property firms began looking for tenants for empty lots in their malls.

Now the idea has spread to China although it carries a more fashionable name: shared hospitals. The Quancheng International Medical Centre covers 15 floors of a commercial building in Hangzhou with five additional levels of retail space below.

The $15 million project is backed by two local retailers and a healthcare firm. According to TMT Post, the seamless transition from retail to medical helps alleviate patient anxiety about going to a hospital. It is also a boon for the clinics, as the convenience of the location drives traffic.

The premises allow a number of clinics to not only share the same roof but also other resources including equipment and even operating rooms. As such, they are billed as a “one-stop shop” with medical services such as ultrasounds, prescription pharmaceuticals and medical imaging. And more important, these all come at more affordable prices, Xinhua reported.

Its partnership with a hospital affiliated to Zhejiang University also allows Quancheng International to go a step further than most private clinics by offering surgical procedures.

According to Caixin Weekly, there are 16,000 private healthcare facilities in China, far more than the 12,000 public hospitals. However, private clinics only receive 12.8% of patient visits. This suggests the private sector is doing little to lessen the pressure on public hospitals, where long waits, short consultations and expensive prescriptions often provoke outrage among patients (see WiC1).

The State Council has pledged to address the problem and in May it laid out a plan to lower the entry thresholds for private investment.

The shared hospital in Hangzhou, hometown to internet giant Alibaba, is not the only private venture to shake up the market. Unsurprisingly Tencent has also stepped in. The tech titan has been stalking the healthcare industry for a while, investing in healthcare apps Miaoshou Doctor, Guahao and Haodiafu. Most recently it launched its own offline clinics called Tencent DoctorWork. Trials of the new service only began in Chengdu last month and they have since expanded to Beijing and Shenzhen.

DoctorWork is essentially a co-working space for doctors. According to CBN, a newspaper, the clinics share facilities and physicians with local hospitals and draw on their partnership with Medlinker, a networking platform for doctors with over 430,000 members (which Tencent is also an investor in).

Patients can use DoctorWork’s app for a diagnosis online and according to TMT Post they will receive a response within three minutes. They will then be directed to a relevant clinic or failing that, a doctor will make a housecall. This O2O service is why Tencent describes its clinics as an “internet+healthcare” venture.

DoctorWork is another creation of China’s fast-growing sharing economy, which has spawned everything from shared basketballs to shared sex dolls (see this week’s And Finally). According to Xinhua, revenues from the “medical sharing economy” more than doubled to Rmb15.5 billion ($2.3 billion) last year and are predicted to hit Rmb60 billion by 2020.

Of course, Alibaba is also active in this field. The omnipresent company launched AliHealth in 2014, which allows users to book appointments with clinicians online. Last year it integrated Ant Financial’s Sesame Credit scoring into the booking system, allowing patients with sound repayment records to pay their medical bills after treatment. This arrangement alone has cut waiting time for those patients by 41%, TMT Post reports.

With the new medical mall opening in Alibaba’s backyard, it would be no surprise to see the two integrate their services in the future.

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