Tencent Enters Healthcare In China
China’s internet giant muscles in on the healthcare sector
China has an extremely lucrative healthcare market, with a growth level of 10 per cent projected for the next two to three years. With an ageing population, and rapidly increasing levels of chronic disease due to lifestyle changes, the value of the sector is only set to grow in the long term. Yet established healthcare systems in China deliver poor value to patients. An underused primary care system results in most patients seeking treatment in hospitals, where overstretched services and a lack of doctors result in long queues. Ambitious government reforms to the healthcare system in 2009 have seen questionable progress in providing citizens with efficient and affordable care. This has paved the way for the entry of private companies into the healthcare sector. Tencent – the largest internet company in China by market capitalisation – has thrown its hat into the ring with remarkable success.
WeWant better healthcare
Tencent is the owner of WeChat – the most used app in China. Its members have become accustomed to using the app to make calls, send messages, and transfer payments, but from 2014 they have also been able to use it to access medical services. The launch of WeChat Intelligent Healthcare enabled patients to book appointments via the app, and to make payments for drugs and services at hospitals and other medical institutions. By 2017, over 38,000 medical facilities had WeChat accounts, giving their patients access to online consultations, bill payment through WeChat Pay, and the ability to book appointments online.
Further extending its reach into healthcare apps, in November 2017, Tencent launched a medical insurance pilot scheme through its WeChat platform. Currently available to only one per cent of WeChat users, WeSure is also designed to promote healthy living. It offers rewards to its users who take more than 8,000 steps per day.
AI for medical innovation
Along with its patient focussed services, Tencent has also entered into diagnostics. Its AI Medical Innovation System (AIMIS) combines Artificial Intelligence with medical imaging techniques to accurately diagnose disease. Since AIMIS was launched in 2017, the system has been installed in 10 hospitals around China, with a government agreement to establish around 100 AIMIS labs in total.
The technology boasts truly impressive accuracy rates for preliminary diagnoses of disease. Images of patient tissue are fed into the AI software, which can then determine in under four seconds whether the body looks normal, enflamed or cancerous. AIMIS currently offers 90 per cent accuracy for diagnoses of oesophageal cancer, 95 per cent for lung sarcoidosis and 97 per cent for diabetic retinopathy. Such technological aids are a huge help to overworked doctors in providing patients with correct diagnoses.
All part of a government plan
Tencent’s success in its move into healthcare could not have been achieved without strong government backing. In fact, the Chinese government’s support of Tencent is part of a more general drive towards the use of AI in several industries. However, whilst the considerable need for innovation in the Chinese healthcare system is clear, not all companies have enjoyed such a smooth entry into the sector. One of Tencent’s main rivals, Alibaba, has been offering appointment booking and medical bill payment services on its app Alipay, for several years. A pilot service for drugs payment and delivery from AliHealth – the medical arm of Alibaba – was retired before it entered mainstream implementation. In spite of launching before Tencent’s AIMIS service, AliHealth’s diagnostic programme, DoctorYou, has not achieved such widespread adoption.
It seems, therefore, that Tencent is currently occupying a privileged space in the Chinese healthcare market. With its own clinic, Tencent DoctorWork, having recently opened in Beijing, and plans for more clinics under way, the multi layered opportunities for innovation in healthcare by private enterprise are clear. As China’s population is only set to get bigger, older and sicker, entering healthcare now is a smart business move for the future.
Do multinational conglomerates have a role to play in healthcare provision? To what extent should this responsibility fall to government? Could we soon see technology giants enter the healthcare sector in the West? Share your thoughts and ideas.
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