(Hong Kong, Shanghai, 30 April 2021) Ping An Insurance (Group) Company of China, Ltd. (hereafter "Ping An" or the "Group", HKEX: 2318; SSE: 601318) is investing in a holistic strategy in digital healthcare to address the challenges of China’s rapidly aging population, rising public healthcare costs and a shortage of medical professionals.
Digital healthcare spending last year was about 7% of total healthcare spending in China, but the COVID-19 pandemic has driven wider acceptance of online healthcare services among the government, regulators, health care professionals, consumers and companies, Ping An Group Co-CEO Jessica Tan said on McKinsey’s Future of Asia podcast.
“We believe perhaps 20% to 25% [of healthcare services in China] could be online or even part of it can be online, but then the bulk is still going to be offline. You still need to solve the offline problem, and we believe that technology can be used to empower these professionals,” Ms Tan said.
Ping An has used its financial and technology expertise to create a closed-loop healthcare ecosystem with 12 Group entities supporting the government, healthcare service providers, medical professionals, social and commercial health insurers, and consumers.
“Healthcare services is a critical and differentiating part of our insurance, so we’ve bundled our insurance and healthcare services together,” Ms Tan said. “We’re one of the largest online healthcare providers, and we believe that this digitization of healthcare services is coming, and we would like to be one of the leading players in this area.”
China’s healthcare market is expected to grow from RMB6 trillion in 2019 to RMB16 trillion in 2030, she said. There is rapid growth in demand from an aging and increasingly affluent population and a supportive policy and regulatory environment in line with the national Healthy China 2030 initiative. However, there are major challenges: with 3.8 million doctors, 4.4 million nurses for population of 1.4 billion, there is a shortfall of as many as 700,000 doctors and millions of nurses, compared to Western countries. Rising costs must also be controlled: Chinese consumers are spending as much as 10% of their disposable income on health expenses, compared with 7% for US consumers. At the same time, government social health insurance expenditures are growing faster than income, so commercial insurance, which only represents about 7% of the payments, can grow to relieve the burden of the out-of-pocket expenditure, Ms Tan said.
Ping An Good Doctor, the first pillar of Ping An’s healthcare strategy, is already the leading online healthcare services portal in China, for 24/7 online consultations, health management, prescriptions, second medical opinions and drug delivery. As of December 31, 2020, Ping An Good Doctor had 373 million users, and partnered with more than 3,700 hospitals and 151,000 pharmacies.
The second pillar is to support medical professionals working offline, with tools such as AskBob Doctor, an artificial intelligence (AI)-driven clinical decision support system and AI medical imaging and analysis. AskBob Doctor is already supporting 250,000 medical institutions and 750,000 doctors, for faster, more accurate diagnoses and tailored treatment recommendations. These tools were developed by Ping An Smart Healthcare, affiliated to Group subsidiary Ping An Smart City. Ping An Smart Healthcare supports the development of China's health care system by improving institutional management by health and medical authorities, assisting doctors in diagnosis and treatment, supporting the public health system to manage epidemics and chronic diseases, and facilitating pharmaceutical research
For the Ping An Group, the healthcare ecosystem plays a key role in growing the Group’s core financial business. Each year for the past four years, between 15% and 20% of Ping An’s new financial customers were sourced from the health care ecosystem. Those customers held an average of 3.2 financial contracts and RMB39,100 in AUM per capita, compared to an average 2.1 financial contracts and RMB17,300 in AUM per capita for those who did not use the healthcare ecosystem.