After the frenzy, a series of past Internet tactics such as subsidies and advertising have been proven ineffective in the medical industry.
"Chinese Entrepreneur" reporter Tan Liping
Edited by Zhang Hao
Header image source: Visual China
After the rumors of the acquisition of Ali Health and Good Doctor Online broke, Lu Jie was not surprised. Since 2022, more and more people around them have left the Internet medical industry, and their companies are more or less facing the same dilemma as Good Doctor Online - commercialization exploration is still unsolved.
Lu Jie is a traditional pharmaceutical company with a sales background, and has accumulated a large number of hospital and doctor resources in South China. In 2017, at the hottest time of Internet medicine, I plunged into it with a dream. He has done a good job and run through a small closed loop of commercialization of chronic disease management - through "doctors leading patients (doctors connecting patients)", covering more than 100,000 local patients, and no longer losing money. In 2019, I was supposed to talk to a leading Internet medical company about commodity supply chain cooperation, but I was selected, "Who is not excited when people tell me the story of 'tenfold growth'?" Lu Jie immediately joined, responsible for expanding the experience of a single disease to more chronic disease fields.
But he soon discovered that the logic of "doctors with patients", which can be quickly replicated offline, is so difficult to implement on a big platform. The company attracts new users through high subsidies, and the retention rate is very low, and it rarely generates demand for services that are willing to pay online. The more Lu Jie worked, the more frustrated he became, and in the end he didn't even dare to recruit anyone, because he couldn't tell what value he generated.
For a long time, he was in an awkward position internally - if he wanted to open a new service attribute business, he needed to have a budget, but to have a budget, he had to be evaluated how much revenue he could generate. However, online medical services are so complex that in the face of selling medicines, the consultation fee and the membership fee that evolved later to focus on exclusive family doctors are not worth mentioning.
"Users think it's reasonable to sell drugs online, but why does online consultation cost money?" Sun Hong used to work as a marketing brand in a leading Internet medical company, and even now he thinks that the paid membership service provided at that time is very cost-effective, but it just "doesn't sell money".
Little by little, medical services are being eaten away by online drug sales. Although every practitioner understands that if they had not shouted out the vision of solving the uneven distribution of medical resources through the Internet, they would not have been able to get the original valuation, and they would not have been able to talk about becoming an industry. On the one hand, the input-output ratio is more certain, and on the other hand, the medical services that are not necessarily output, and it is not complicated for companies that want to survive to make a choice.
The reality is so. A series of tried and tested methods on the Internet, such as subsidies and advertising, are ineffective in the medical industry. Internet medical stories are no longer sexy, and because the entire industry has not explored a standardized business model, young people like Lu Jie and Sun Hong finally chose to leave after struggling.
Source: China Attempt Library
This may also be the game that the first batch of Internet medical companies such as Good Doctor Online once had. Founded 18 years ago, Wang Hang, the founder of Good Doctor Online, advocated the principle of "three don'ts", not to earn drug profits, not to build offline hospitals, and not to do medical advertising business, which made it win the trust of 250,000 registered doctors and a large number of users, but it had continuous problems in commercialization.
Lu Jie returned to the traditional medical industry, "Medical care and service are actually two products. Online, when the user is not sick, the service takes precedence, but when there is a disease, it must be the medical priority. Once medical care is prioritized, no matter which Internet medical platform, it will not solve the user's problem. ”
Brief highlights
For the Internet medical industry, an extremely critical node is 2020, when the epidemic caused a large number of users to flock to major Internet medical platforms.
Sun Hong used "excited" to describe the working conditions within the company at that time. A number of business lines are established every month, and the company requires the marketing department to hold a press conference every month, and it has become a daily routine to invite all kinds of famous doctors to do popular science live broadcasts. The number of users skyrocketed, and in order to ensure the efficiency of the service, the company had to recruit a large team of full-time doctors.
This is just a small team that has just been upgraded to a business department, and it has grown from a few dozen people to a few hundred. Sun Hong joined a few months before the pandemic, and the company had just finished sorting out its organizational structure. Internet medical care is an absolute first-level department, and at that time, all business paths had to be "embedded" in the service process, including the drug sales business. Every business unit has to think about where your users are and what their needs are, and medicine is just one of the needs.
"The rhythm is tight. Sun Hong feels that he is creating something new every day, which greatly expands his imagination of what he is engaged in. At that time, Lu Jie was told by the company's CEO, "What is in the offline hospital, our Internet hospital should have." ”
The main business path designed by Sun Hong's company is "doctors and patients", moving offline hospitals online. Doctors are very important, and the doctors registered on the platform are responsible for guiding patients to download major Internet medical apps and telling them that they can contact doctors directly on these apps while consulting in the hospital on a daily basis.
It was also during this period that street battles began between Internet medical companies. Sun Hong remembers that when the hospital first resumed offline consultation in 2020, if patients went to see a doctor, they would see a row of QR code signs on the doctor's desktop, including Good Doctor Online, WeDoctor, Ali Health, JD Health, etc. These companies have burned the war to every department, and even to every doctor.
Lu Jie's company specially poached a group of people with medical backgrounds from Good Doctor Online, Chunyu Doctor or traditional pharmaceutical companies to be responsible for the expansion of offline hospital resources. They also divided this group of people into two groups, one group specialized in docking with head experts, doing academic and industry research together, and attracting them to settle in with higher-dimensional things. The medical circle pays attention to teachers, and one expert corresponds to thousands of students, who work in the front line of hospitals at all levels.
A group of teams is similar to the role of traditional Chinese medicine representatives of pharmaceutical companies in the past, specializing in "sweeping the streets" in major hospitals, knocking on departments and doctors, allowing doctors to settle in the platform, training doctors in skills and guiding speech, etc.
This comes at a huge cost. The core of attracting doctors to settle in the platform is the consultation fee, and the platform subsidized a lot in the early days, so that users have enthusiasm for use, and doctors have high incomes and enthusiasm.
But soon the platform found that under the high cost of customer acquisition, users could not be retained at all. There are losses in every link, and doctors do have the ability to bring patients to the platform, but the whole process of Internet medical care is too complicated, and there are a lot of losses in each service link, and the user stickiness of the platform cannot be clarified.
It is fundamentally different from other Internet industries, and the financial model cannot support the financial model of investing in "channel" costs in hospitals and doctors, as well as repeatedly acquiring customers on the user side.
"If it is not subsidized, the order will drop immediately, and it will not even be free, and the user will not use it. Sun Hong said.
Source: Visual China
Internally, pharmaceutical retailing, which was originally a "secondary attack", has also dealt a heavy blow to medical services - it has become a cash cow for many large companies. JD Health executives said in a public statement at the time that JD Pharmacy's revenue had surpassed that of the four major retail chains, and in just three years, it had become the country's largest pharmaceutical retail channel. Including Internet medical companies with e-commerce genes such as Ping An Good Doctor and Ali Health, the businesses with the highest proportion of revenue are pharmaceutical retail.
At the end of 2020, the homepage of the Good Doctor APP had an entrance to the member channel and began to test the waters of user-side monetization services including commercial insurance. "There are too many people in China who are talking about the idea of selling medicine, but very few people really want to study this service thoroughly and do it well. Wang Hang said at the 15th anniversary celebration.
In any case, Internet medical care has become an industry, and large companies have emerged. JD Health completed its listing during the epidemic, relying on the surge in retail sales of drugs, and its market value once exceeded HK$600 billion, surpassing Baidu. In Sun Hong's view, it is undeniable that the epidemic has brought about a change in the concept of Internet medical treatment for the whole people, which has "changed the order of the industry", but Internet medical care is getting smaller and smaller.
Struggles and games
When he first entered the industry in 2019, he envisioned a vision to break the imbalance in healthcare resources. As an integrator of medical resources, he is eager for the platform to solve the problem of sinking medical resources and effectively improve the infrastructure in areas with underdeveloped medical resources.
Dramatically, the platform data in 2021 shows that a large number of doctors in non-tertiary hospitals in cities below the third tier are active on the doctor side, while the user side is dominated by urban young people. "In the end, it became a doctor in a small city who treated young people in a big city. Sun Hong said that it was completely reversed.
He began to stop being obsessed with words like "breaking" and "subverting", and imagined some new scenarios relatively practically: if the whole process of problems cannot be solved, then part of the problems will be solved, such as 20% of the core services such as diagnosis and surgery will be solved by offline hospitals, and the remaining 80% will be solved by online platforms.
As a result, in 2022, the "80%" was also abandoned. At this time, Internet medical companies are more about "exchanging efficiency for increment", that is, using AI and other technical means to improve the number of doctors' consultations. "With the total number of doctors unchanged, we can expand the capacity and increase the number of consultations. Sun Hong said that if 80% can't be done, then aim for a smaller proportion.
But in the end, this did not materialize, because the platform did not have more resources to give opportunities. In the first half of 2021, the stock prices of several listed internet medical companies began to fall. Sun Hong increasingly felt the urgency of the company's internal demand for medical service business to make money.
From the second half of 2021 to the first half of 2022, various business attempts made by his department were actually to expand revenue sources at a small cost. For example, the launch of various paid products, membership services, etc., including the cutting of tumors and other business lines that rely heavily on doctors, and only do business with a simple chain such as mental health. "Everybody wants medical services to be a source of revenue for the company, not like an 'affiliate' department. ”
But there is a "chasm" in the internal chain. Liu Zhang, who is in charge of "knocking doctors" in a leading company, recalls that the main indicator is the number of consultations brought by doctors, that is, he not only has to expand doctors and complete "doctors with patients", but also consider the operation of the user side. The user's subsequent multiple drug purchases on the platform are managed by the drug retail department, and he has no control at all. He can only "get" some silent users who do not place orders from other departments through personal relationships. Eventually, his department was gradually marginalized.
After many attempts to no avail, Sun Hong said that "in the end, it was difficult". The reality they can't change is that the monetization efficiency of goods is much higher than that of services. From the perspective of enterprises, investing in drugs is to make money, and investing in services is to lose, so enterprises are becoming more and more pragmatic.
During this period, a number of leading companies, including Good Doctor Online, invested in advertising budgets of 100 million yuan, but in hindsight, they had little effect, and it was also considered to be the straw that crushed them.
At that time, major platforms significantly reduced subsidies for Internet medical treatment, and doctors became less and less active. Of course, most public hospitals also have their own Internet hospital platforms, and some doctors have even started to make personal IPs. The QR code stand that was crowded on their desks quickly disappeared, and the "doctor with patient" model was completely abandoned.
"After several years of busyness, we not only failed to create an increase in medical resources, but even caused a waste of medical resources. Sun Hong said.
Those with professional medical backgrounds have left one after another less than a year after being poached into Internet companies, and they have been internally assessed as unsuitable. Sun Hong clearly felt that the "internal professional atmosphere" supported by people with medical backgrounds was getting weaker and weaker.
Still believe
In 2023, Sun Hong also left the industry. The company's e-commerce flavor is getting stronger and stronger, and the vacated personnel positions in medical services are quickly filled by the live broadcast e-commerce team. "Of course, they are not going to give up on medical services, which means directly giving up the imagination of future valuations. Sun Hong still didn't let go, and from time to time he would discuss and review with his old colleagues, and everyone was a little disappointed.
The past two years have been relatively gloomy for the Internet medical industry. In addition to the stable operation of a few trading-oriented rookies such as JD Health and Meituan, most of the seniors like Good Doctor Online are struggling.
Photo: Deng Pan
Good Doctor Online first exposed layoffs and business adjustments in December 2022, and then in 2023, Wang Hang issued an internal letter frankly: Since a series of business adjustments, the company's losses have improved rapidly, but it is still facing great pressure from shareholders to withdraw capital and ask for redemption.
Lilac Garden has become a marketing-oriented company, focusing on content output, brand marketing and other businesses, and Dr. Chunyu has restarted the pentagram model, claiming that he wants to build a one-stop medical full-service platform, but has fallen silent again.
The new story of Internet medical care, only the concept of a large medical model has been popular for a while, which has led to a high-profile voice that has not been seen by the Medical Federation and Lilac Garden for a long time, and there has been no big splash since then.
More people, like Sun Hong, have silently left the industry. Some returned to traditional pharmaceutical companies, some did not give up and jumped to another Internet medical company, and some started their own businesses.
After the past few years, in the eyes of these practitioners, although they are becoming more and more compromised, they are still willing to believe that this process of exploration is not worthless, and it is paving the way for real Internet medical services.
Lu Jie is more practical, and he predicts that the future medical service opportunities will still be offline. He believes that in the next 3 to 5 years, JD.com, Meituan, Alibaba, etc. will gradually lay out offline in order to expand their business scale after establishing a complete enough supply chain for drug sales, but it is different from the service type of the original medical system. "Medical services mainly take place offline, based on the physical medical center to make money, both compliant and continuous. ”
"Can medical insurance pay for Internet medicine?Can prescription drugs circulate on a large scale online?" Liu Zhang, who is still in the industry, is firmly optimistic about the trend of Internet medicine, and he believes that many existing problems cannot be solved by the Internet itself, "Maybe it will be called AI medical care in the future, and it can be confirmed that the value of the Internet of Everything exists, and some diseases have been confirmed to be solved through Internet medicine." ”
Sun Hong also discussed with people in the industry what the future direction of the Internet medical industry will be, perhaps as a propagandist for hierarchical diagnosis and treatment, or AI. Although these scattered small businesses are not yet able to support the Internet medical market, he is still happy to do it: the same doctor resources can treat more patients on the Internet platform, which is a valuable thing.
There is one thing that several interviewees will still sigh when they talk about it. Almost all practitioners will say that Wang Hang and Good Doctor Online are good companies, but they are not commercially successful. Deep down, maybe that's the world they imagined.
At the request of the interviewee, Lu Jie, Sun Hong, and Liu Zhang are pseudonyms