China Times (chinatimes.net.cn) reporter Cui Xiaotian reported from Beijing
The medical industry has come to the forefront, and capital is competing. Even if the overall investment and financing are sluggish due to the impact of the epidemic, the medical industry is still performing well.
According to the big data on investment and financing released by Tianyancha recently, the number of financing events in January-February 2020 fell by 49.77% compared with the same period last year. However, the medical and health industry is popular with capital, accounting for the largest proportion of financing events, reaching 121, with an amount of about 15.894 billion yuan. Most of them are equity financing and B-round financing.
A number of brokerages are optimistic about the performance of the medical industry. Zhongtai Securities believes that the global spread of the new crown epidemic, the demand for epidemic prevention materials has risen rapidly, there may be a shortage of overseas masks, body temperature detectors, monitors, ventilators and other epidemic prevention supplies and equipment in the future, the number of overseas orders of many domestic medical device companies has begun to rise, and domestic medical devices have ushered in export opportunities. In addition, if the epidemic continues to ferment, overseas API production capacity may be affected, while the epidemic situation in China is basically stable, and API companies are gradually resuming production, which is expected to further enhance its position in the global industrial chain.
Guosen Securities believes that the overseas epidemic has driven the increase in demand for medical devices, and the public health system will become an important part of the "new infrastructure", focusing on the field of medical equipment.
In the short term, the epidemic has spawned new opportunities and new formats in the medical industry, looking at the long term, under the background of aging, the medical industry is more promising, huge scale, and favored by capital. However, it is worth noting that the high cost of the medical industry and the long recovery cycle have led to the "Waterloo" after some capital has entered.
In the face of such a huge market potential, how should capital "dig gold"? On March 21, Cao Jian, director of the Institute of Medical Service Index of Shanghai Jiao Tong University and deputy secretary-general of the China Medical and Health Culture Association, accepted an exclusive interview with a reporter from China Times.
The outlet has come
Cao Jian told the "China Times" reporter that the huge market potential of the medical industry comes from China's huge population base, and the other comes from the rapid aging trend. Any market segment related to the "old" may become an outlet.
Cao Jian said: "Chinese mouth reached 1.4 billion, no matter how low the incidence multiplied by 1.4 billion is a large amount, coupled with the aging trend." By 2030, China's aging population will be about 370 million, many diseases will break out in large numbers during the aging stage, and the medical expenses spent on the elderly population will be very large. We can see that there are various opportunities around aging, such as geriatric diseases, rehabilitation nursing, daily care, etc., on the one hand, around the needs of elderly treatment and rehabilitation, on the other hand, around the prevention of non-morbidity. ”
"This all shows that the market potential of the medical industry is very large, but we can't call it market capacity," Cao Jian said, because we often face the second problem, that is, consumption power. Before the start of the new medical reform, for example, in 2006, the average bed occupancy rate of hospitals in the country was only 64.9%, which was a very large gap compared with now. Because our ability to pay can not keep up, although there are many potential patients, a large number of patients are subject to economic factors and cannot get effective treatment.
Therefore, social capital needs to dig deep into the market. Not only to see the potential demand, but to really tap its effective demand, with the ability to transform the potential into effective. "Capital must be a market with large effective demand, not a market with large potential demand, which are two concepts. Because any industry in China multiplied by a base of 1.4 billion, it would be a big market. But how many people in this market have real ability to pay, and he is willing to pay you, is worth scrutinizing. Cao Jian said.
At the same time, Cao Jian also reminded capital that although the medical industry is a "gold mine", it is not a profiteering industry. Unlike the Internet, which can show exponential rapid growth, its users will grow a lot overnight, and the medical industry often has to go through a long-term development process. In the medical industry, it is facing the problem of technological maturity and acceptance, including the acceptance of doctors, the acceptance of patients, and the acceptance of medical insurance, which need to be gradually penetrated. So in the entire medical industry, we rarely see companies that explode quickly, and capital also needs to be prepared for steady, long-term investment.
The puzzle remains to be solved
The outlet has come, but in the process of practice, capital often faces various difficulties and challenges, and lacks a good business model.
At present, the market segments under the medical industry are very extensive, including five categories: medical services (hospitals), medicines and medical devices, health care products, health management services and pensions.
In Cao Jian's view, hospitals are the market segment with the highest threshold in the entire medical industry, and it needs long-term and patient operation. Social medical services first need to find a good positioning. The first is to be a general hospital or a specialized hospital. It is unrealistic to be a large and comprehensive general hospital, because the ability of doctors and the ability to support disciplines are relatively weak. It may be relatively better to go to a specialized hospital, and in the fields of obstetrics and dentistry, which have weak medical technology attributes, social hospitals can be well developed. Even if social capital is positioned in a comprehensive hospital, do not covet scale and seek perfection. Internationally, the expansion of hospitals has basically come to an end, and the future will be transformed into miniaturization. For comprehensive social hospitals, maintaining about 500 beds can effectively streamline personnel, reduce management difficulties, and control hard costs. Moreover, through day surgery and other means to improve efficiency, improve the turnover rate of hospitalized patients, and maintain a large number of admitted patients.
The second is to do high-end medical treatment, or to take the basic medical care of medical insurance. High-end hospitals can grasp the pricing power, and the attributes of basic medical public welfare are a little stronger. When capital wants to enter the basic medical market, many times there is a dislocation of market positioning, want to attract medical insurance patients, but also cooperate with multinational large hospitals, buy a lot of high-end equipment, which will pull the cost very high, resulting in a very long payback period of capital, often taking more than ten years.
"Why is it that high-end obstetric hospitals run by the society have relatively small risks and are easy to recover costs? Because now public hospitals in the maternity market can not effectively meet the needs of pregnant women. For example, better medical conditions, single rooms, comfortable environment, good service. And giving birth to a child is a one-time, now pregnant women at home status is also relatively high, go to high-end obstetric hospitals to spend tens of thousands of dollars, this market is easy to enter, many high-end obstetric hospitals business is better, so it is in line with demand. Cao Jian said.
It is worth noting that the epidemic has revitalized the Internet medical care relying on physical hospitals, and it is also worthy of capital attention. Analysys Qianfan's statistics show that during this year's Spring Festival, the daily active peak of independent apps in the field of Online Consultation on the Internet reached 6.712 million, and the maximum increase was nearly 1.6 million, an increase of 31.28%.
In addition to the sharp increase in the number of patients, Internet medical care has also been able to connect with medical insurance, and heavy policies have gradually landed. In Cao Jian's view, in the post-epidemic era, Internet medical treatment may play a more important role in the isolation and diagnosis and treatment of infectious diseases, the combination of AI for auxiliary diagnosis, and 5G-enabled telemedicine.
Cao Jian said that the overall pattern of the medical industry in the future should be a process of complementarity and integration of traditional medical treatment and innovative medical treatment. For Internet medical treatment, the most potential development direction should be to focus on online diagnosis and treatment, explore how to use the development of information technology (such as the use of 5g/6g) and other means to obtain more basis for disease diagnosis (reduce and reduce the necessity of patients going to medical institutions for examination), so as to achieve the diagnosis and treatment, rehabilitation, health management and monitoring of chronic diseases, common diseases, and multiple diseases (gynecological, pediatric, dermatological diseases), and play the role of primary diagnosis and treatment, family doctors and community doctors. Provide users with personalized treatment and health management services.
In the field of old-age care, many old-age institutions are at two extremes, one is that some low-cost public nursing homes are difficult to find; the other is that many social nursing homes are vacant. The reason behind this is that there are not enough people in the pension market with the ability to pay, but the hard cost of pension institutions is very high, the recycling cycle is long, and it is difficult to operate without government subsidies, so most of the capital entering the pension field lacks a good business model. For this contradiction, the state is piloting long-term care insurance to solve the problem of weak ability to pay. At the same time, the government should also reduce land costs and financing costs for social pension institutions, and introduce corresponding policies to solve the problem of high costs.
In the field of medicine and medical devices, they are more capitalized and more mature. Many pharmaceutical companies can ensure very good profits while taking care of public welfare. It operates through marketization, once it develops a marketable and targeted new drug, it is very cost-effective, has a strong enthusiasm for drugs, the cost of effective treatment is relatively low, and it can also receive strong economic benefits. Many of these blockbuster products, a single product, can reach billions of dollars in global sales. The same is true in the medical device field.
Cao Jian said that the medical industry has a high entry threshold and requires a lot of front-end funds and strong talents. Most of the medical industry is a long-term project, such as drug research and development may last for five years, ten years cycle, the construction of hospitals, nursing homes the upfront cost is very high, the need for continuous investment, the operating pressure on the enterprise is also very large.
The entry of capital, first, solves the problem of shortage of funds in the process of enterprise development. Through the design of a good financing model, business model, to attract external capital, can help enterprises share risks, accelerate the research and development process; second, capital promotes the emergence of more market segments; third, capital to promote the integration of the industry, to the pharmaceutical industry as an example, the number of Chinese pharmaceutical companies is about 4000-5000, the average sales of each pharmaceutical company is not high, there is no heavy products, homogenization competition is serious, and the top ten pharmaceutical giants in the United States occupy about 60% of the market. Industry integration can avoid low-level competition and promote enterprises to conduct research and development and quality control; fourth, after the companies in the medical industry are listed, they can improve their visibility and transparency, better accept market supervision, and do mergers and acquisitions.
Wide into the tight pipe
Capital has a good positioning within itself, and the factors of the social environment cannot be ignored.
In recent years, the state has issued many policies to encourage social forces to enter the medical industry, but it has also led to chaos such as insurance fraud, false publicity, and excessive medical treatment.
In Cao Jian's view, the government needs to "widely enter and strictly manage" social medical services, that is, to make the entry threshold lower, the follow-up supervision more stringent, and make the illegal cost of enterprises higher. "Now the common situation is that the cost of breaking the law is low, the cost of abiding by the law is high, and many hospitals may be fined hundreds of thousands of dollars for violating the law." Many companies do it for three years and two years for profit, especially some short-term enterprises, and then open another one elsewhere. The penalty does not matter, even if the top penalty is imposed, the profit obtained is much higher than the fine. Cao Jian said.
At present, in all industries of medical care, it is necessary to strengthen the supervision of the government in the later stage, and the whole government needs to strengthen and innovate the continuous supervision of the medical industry in the later stage. To implement the co-governance model, not only the government must play a regulatory function, but the whole society needs to supervise, as well as the autonomy of enterprises and the self-discipline of industries.
At the same time, Cao Jian also put forward his own suggestions from the perspective of capital and medical industry.
Cao Jian said that for capital, entering the medical industry should not be greedy for perfection, the larger the scale, the higher the risk. Now many listed companies will buy a large number of hospitals, although this can achieve rapid expansion, but if the operational ability and risk control can not keep up, like a horse, the horse runs fast, but you can not control, you will be thrown by the horse.
For enterprises, when choosing capital, they also need to pay attention, not only look at the funds it gives you, but also see the support it gives you. Each capital has different capabilities, some capital only money, no other help; some professional capital will provide more help to enterprises, whether it is the standardization of management, or the collocation of the industrial chain, can give you certain resources. Like Hillhouse Capital, it is not investing in a company, but an industrial cluster. For example, it invests in many hospitals, and some pharmaceutical companies as upstream and downstream, forming a mutual cooperation internally. There are also some industrial fund companies, which focus on chain operations when investing in hospitals, such as investing in a number of maternity hospitals, and forming a chain group of obstetrics and gynecology departments, forming mutual support and sharing of resources.
According to the "China Times" reporter, at the beginning of this year, Cao Jian and Dr. Wu Zhiyin of the Medical and Health Science and Technology Development Research Center of the National Health Commission, Li Bing, president of China Resources Medical Group, and Professor Bao Yong of Shanghai Jiao Tong University, jointly wrote the book "Medical Investment: How Capital Empowers the Medical Industry (Case Article)", which as a case study about the development of China's local medical industry, its purpose is to provide a localized reference and reference for practitioners and investors in China's medical industry. The book has three major characteristics: originality, locality and comprehensiveness. Through the research and analysis of 12 cases covering five major medical segments such as hospitals and hospital groups, biopharmaceuticals, health and pensions, Internet medical care, and medical devices, the process of the development of China's local medical industry is described, and it provides localized reference and reference for practitioners and investors in China's medical industry.
Editor-in-Charge: Yunxi Xu Editor-in-Chief: Chen Yanpeng