The author | Bai Qian
Edit | Tsukimi
"After six years of hard work, I want to spend more time with my family and make more friends."
On the evening of May 15, 2020, Ping An Healthcare Technology Co., Ltd. issued an announcement that Wang Tao, the chairman of the board of directors, was dismissed from the post of chairman of the board of directors for personal reasons, and was succeeded by Fang Weihao, an executive of the Ping An department, and a group of former Ali executives left with Wang Tao. This conflicts with Wang Tao's statement that he "took the initiative to resign" in the circle of friends. In the capital market, the change of coach has caused Ping An Good Doctor's stock price to plummet by 8.46%.
Wang Tao was once the president of Alibaba Software, and was recruited by Ma Mingzhe, chairman of Ping An Group, to create the Ping An Good Doctor APP, and achieved the top spot in the industry all the way. In an interview with the media in 2015, Wang Tao praised Ma Mingzhe: "Ma Mingzhe is quite devoted to his work, if Ma always lets me continue to serve Ping An, I am willing to stay, there is still a lot of room for me to show my fists." ”
Nowadays, with the strategic restructuring of "secondary entrepreneurship", Wang Tao's route is being diluted within the Ping An health system, and the previous ALL in C end has become a focus on the B end. In Wang Tao's view, the epidemic is making Chinese realize the importance of remote medical treatment, which is conducive to Ping An Good Doctor's breakeven in 2021, and Fang Weihao has postponed the turnaround time by three years, which has become the root cause of Ping An Good Doctor's stock price falling and falling. In order to calm the market sentiment, management had to throw out a repurchase program of HK$10.38 million on March 28 this year.
The deep logic behind it is that the era of professional managers of Ping An Health has ended and has become a pawn in the strategic transformation of Ping An Group. Can the shift to the B-side drive a profit leap? Are medical services independently profitable? These questions urgently need to be answered by Fang Weihao, the new head of Ping An Health.
01 Safe and healthy blood loss
Since the beginning of last year, Ping An Good Doctor has suffered a continuous decline in its stock price, with a maximum decline of nearly 90%, and the market value has evaporated to 150 billion Hong Kong dollars. In addition to the sluggish factors of Hong Kong technology stocks, the continuous expansion of operating losses is the core reason.
In the same year that Ping An Health changed coaches, the company's net loss narrowing momentum was interrupted, and by 2021, Ping An Health set the highest annual loss record of 1.539 billion yuan, an increase of 62.2% year-on-year.
The loss comes from the "second venture". At the beginning of last year, Ping An Health announced that it would change the name of the APP from "Ping An Good Doctor" to "Ping An Health", and cut the industrial chain from medical treatment to the whole process of prevention and rehabilitation, which made Ping An Health's annual operating cost growth rate reach 12.5%, far exceeding the growth rate of operating income of 6.8%.
This means a new round of infrastructure expansion. From the perspective of specific actions, in the Wang Tao era, Ping An Good Doctor built the ability to respond to user needs; in Fang Weihao's 2.0 era, Ping An Health tried to expand its business scope. Previously, the subsidy strategy of "spending money to invite people across the country to see a doctor" was weakened, and Ping An Health implemented a comprehensive payment system for online consultations and expanded the paid service options. On the supply side, Ping An Health has increased its efforts to absorb external expert resources and access more health institutions and pharmacies.
In the earnings report, Ping An Health said that the purpose of the above measures is to dilute user growth and shift to the pursuit of user quality. However, from the perspective of actual results, Ping An Health's first goal is still to expand the proportion of paying users, and the financial report shows that ping An Health's average paying user conversion rate has soared from 4.9% in 2020 to 24.8% in 2021. This means that under the background of lowering the threshold for payment, more users choose to access Ping An Good Doctor's online consultation service, but from the perspective of revenue, the revenue of medical services has increased by only 8% year-on-year. In the financial report, Ping An Health expressed the reasons for the conversion rate of power payment:
"Accelerating the coverage of Ping An Group's new and existing users, as well as deeply matching customer value, is an important task for Ping An Health to continue, and it is also the core path to improve the HMO (managed medical) model."
The logic behind it is that Ping An Health will serve as a pawn for Ping An Group to benchmark the US joint health model, and by improving the comprehensive service capabilities of medicine, medicine and health management, it will reproduce the Optumhealth business segment of United Health, and undertake the B-end customers of Ping An Group's financial business to achieve growth. That is, fang Weihao expressed in his mouth, on the basis of the C-end, the enterprise end, the financial end and the hospital end are added to improve the closed-loop service network.
The closed loop between Ping An Health and Ping An Group has been opened, and Ping An Health's financial report shows that in Ping An's "ZhenXiang RUN" series of critical illness insurance products, Ping An Health has provided a number of services such as major illness project management service packages, real-time audio and video consultation rights packages, health management service packages, etc., and cooperated with Ping An Health Insurance to launch the E Sheng Insurance Outpatient Add-on Package, as well as to provide consultation services for Ping An Life Online users.
This means that Ping An Health's goal is not to tap the pharmaceutical consumption power of active users, but to win B-end customers by expanding the scope of services.
This also explains why Ping An Health has the highest user volume in the industry, but insists on taking medical services that are more difficult to make a profit as the core, rather than copying the drug sales model of Ali Health and JD Health to make a profit. The reason is that medical and health services have the strongest ability to empower insurance, improve service capabilities and reduce loss rates.
Ping An Group's ideal format is the closed-loop model of United Health, which serves as a core channel to reconstruct the supply and demand relationship of the medical market, become an indispensable intermediary in the process of supply and demand matching, and establish the second pillar position of commercial insurance relative to medical insurance.
02 Public hospitals that cannot be bypassed
On October 5, 2021, the restructured New Founder Group was established, and Ping An Life took about 66.5% of the shares of New Founder Group. Within a month, ping an group's first batch of high-end health management centers were established, of which the Beijing center was based on the relevant resources of Founder's Peking University Medical International Hospital.
In fact, Ping An Group is not a pioneer of insurance companies entering private hospitals, since 2014, Sunshine Life, New China Life, Taikang Insurance and other enterprises have successively launched investment in the medical field, with the purpose of bypassing the public hospital system and building a closed-loop model of medical and insurance collaboration.
The reason for the use of the asset-heavy model to bet on medical resources is rooted in the difference in the pattern of the medical industry between China and the United States.
From 1847 onwards, the American Medical Association cultivated a professional monopoly pattern through a series of means, including raising the barrier to physician access, increasing the number of years of doctor education, and restricting other medical service providers and requiring private doctors to practice medicine independently. On the positive side, the medical association provides a reference standard for the development of medicine in the United States; on the contrary, the medical association has protected the excess income of the doctor group with strong monopoly measures and exacerbated the rapid rise in social medical expenses.
On this basis, American doctors have far more autonomy than China, they are independent negotiators with the health care department, and they prefer to treat diseases with excessive examination and complex technology, rather than participating in prevention and health management. The original intention of the HMO model was to control the rapid rise in social medical costs, and in the 1990s, the annual increase in medical costs in the United States under the supervision of HMO fell from more than 10% to 5% to 6%.
In China, public hospitals and medical insurance are the absolute main body of the medical market, and the asymmetry of supply and demand relations has formed a strong position for public hospitals. For the supply side with concentrated scale and strong market position, the implementation of the HMO model will compress its profit margins, and its no customer demand for HMO institutions, whether it is medical insurance or insurance companies, lack of bargaining position to carry out cost control negotiations, which makes it difficult for all parties to negotiate cooperation.
This has formed the idea that the insurance industry bypasses the existing supply side. Wang Tao once expressed the reason why Ping An Good Doctor built his own team of doctors: "Good doctors do not have time to work part-time, may not even have time to go to the toilet, and will be surrounded by patients. ”
Since 2014, China's Internet medical concept has been very popular, but many online medical service models have been constantly falsified by capital, and pharmaceutical e-commerce has become the main backbone of Internet medical treatment, the core reason is that public hospitals regard the action of Internet platforms to attract doctors as resource competition. As more and more public hospitals choose to build their own Internet hospitals, the competition pattern of public-private Internet medical care has taken shape.
To this day, the Internet medical industry, including Ping An Health, still lives on the remaining market share of public hospitals, including online follow-up, health management, chronic disease monitoring, and disease prevention. A large number of user feedback shows that the results of online consultations are not accurate enough, and patient needs must eventually be solved offline. In the field of serious illness and emergency diseases, public hospitals still occupy an absolute advantage.
03 Health insurance to save peace?
There is a story in "Zhuangzi Foreign Objects" that Zhuangzi wants to save a thirsty carp with the water of the West River, and the fish angrily said, "I'm afraid I have already become a dried fish." ”
From the launch of the life insurance reform in 2019 when Ma Mingzhe took the lead, by the end of 2021, Ping An life insurance agents have dropped from 1.42 million in 2018 to 600,000, and the average first-year premium per agent has increased by more than 22% year-on-year, but the new business value of life insurance and health insurance business has decreased by 23.6% year-on-year, and the value rate of new business has decreased by 5.5%.
Ping An of China explained that the main reason for the decline in life insurance is the change in the economic situation caused by the impact of the epidemic, as well as the decline in the number of agents, and the change in the profit margin of new policies is due to the increase in the proportion of low-margin savings insurance products. From the perspective of core reasons, the 2017 Notice of the China Insurance Regulatory Commission on Regulating the Product Development and Design Behavior of Life Insurance Companies forced the insurance industry to return to the source of protection, and short-term investment insurance types were significantly withdrawn.
This has forced Ping An to find a way out more from the more difficult to sell protection insurance, if the lack of growth of life insurance is a rut, the health insurance that is still in its infancy is the water of the West River. Judging from the experience of the United States, commercial health insurance has long occupied the main position of the medical security system and brought rich returns to HMO institutions such as United Health.
For Ping An Group, accelerating the construction of Ping An Health's medical infrastructure is a key step towards the HMO model. Fang Weihao said that Ping An Health has formed a strategic direction of "HMO + Family Doctor Membership System + O2O", and the decline in stock prices cannot reflect the actual value of Ping An Health.
However, for Ping An Health, there are still many problems to be solved on the road of benchmarking and combining health.
1. The huge commercial health insurance market in the United States is based on huge medical expenditure. According to the World Bank, U.S. health spending as a share of GDP was about 18 percent in 2018, compared with just 6 percent in China. Whether it is the growth of per capita medical expenditure or the rise of the scale of the commercial health insurance market, it is destined to be an unattainable water of the West River, which is limited by the growth rate of the national economy.
2. The HMO model of united health requires a very high level of medical expertise, while the domestic Internet medical platform lacks relevant capabilities and is more in the implementation of the supplementary work of the public medical system. This also leads to a clear cautious attitude towards Internet medical treatment in the settlement of medical insurance payments. In the existing HMO business experiments in China, public hospitals have always occupied the main position, while the degree of involvement of commercial platforms in the industrial chain is still relatively shallow, and it plays more of a role in technical support than the main body of HMO supervision.
Taking the family private doctor model advocated by Ping An Health as an example, its implementation is conducive to Ping An Health's increase in customer unit price and covers a wider range of user groups. In its propaganda, Ping An Health cites the advantages of the Western private doctor model. However, its market prospects still need to be observed in combination with the degree of openness of medical insurance to O2O medical treatment.
3. There are serious injustices in the US health care system backed by United Health, and the strength of industry associations is in stark contrast to the lack of government protection, and Obama's medical correction that limits the profits of insurance companies is the product of this contradiction. With the U.S. policy requiring disclosure of medicare prices going into effect in 2021, more and more hospitals are diverging from allied health rates. How to explore an HMO route suitable for China, Ping An Health is still in the exploratory stage.
From the current point of view, Ping An Health under Fang Weihao is more inclined to build its own medical service capabilities to digest Ping An Group's B-end resources, and how to serve the growth of high-loss health insurance and how to find competitiveness from the public medical system, Ping An Health needs more answers.
bibliography:
1. "Demystifying the U.S. Medical System and Its Related Industries", Zhao Qiang.
2. "Ten years of arduous exploration, Chinese-style HMO has really ushered in an inflection point this time", Shi Kr shared.
3. "Who is The Joint Health of Ping An and Taikang Group that are learning from the benchmark?" Faithful.