In the eastern Chinese city of Hangzhou, an ambulance speeds through traffic on a wave of green lights, helped along by an artificial intelligence (AI) system and big data.
The system, which involves sending information to a centralized computer linked to the city’s transport networks, is part of a trial by Alibaba Group Holding Ltd. The Chinese tech giant is hoping to use its cloud and data systems to tackle issues hobbling China’s healthcare system like snarled city traffic, long patient queues and a lack of doctors.
Alibaba’s push into healthcare reflects a wider trend in China, where technology firms are racing to shake up a creaking state-run health sector and take a slice of spending that McKinsey & Co estimates will hit US$1 trillion by 2020.
Tencent-backed WeDoctor, which offers online consultations and doctor appointments, raised US$500 million in May at a valuation of US$5.5 billion. Ping An Good Doctor, a similar platform backed by Ping An Insurance, raised US$1.1 billion in an IPO this year.
“The opportunity is growing very fast,” said Min Wanli, the Hangzhou-based chief machine intelligence scientist at Alibaba’s cloud division.
Alibaba is working with a hospital in Shanghai using data to predict patient demand and allocate doctors. In Zhejiang province, the company is working on AI-assisted diagnosis tools to help analyze medical images such as CT scans and MRIs.
“You need to go through very specialized training in order to read these images, but we know that experts are a very scarce resource,” said Min.
Chinese hospitals are increasingly using technology to bridge the gap between urban centers and remote parts of the country where doctors are in short supply. Using document-sharing systems and livestreaming video, specialists can direct more junior medical staff on-site doing patient diagnoses.
DXY, one of China’s biggest online networks of doctors, offers consultations on the WeChat social media platform for patients with chronic diseases such as diabetes, with a team of nurses and doctors providing medical advice.
China is pressing to reduce healthcare costs that are soaring as the population ages, putting huge strains on the state insurance system.
At the same time, Beijing has been promising better access to healthcare and improved grass-roots care – despite a lack of family doctors – which has brought technology into the spotlight as a way of maximizing stretched resources.
“Educating doctors is going to take too long,” said Rogier Janssens, Beijing-based general manager of Germany’s Merck KGaA’s biopharma business in China. He added that smartphones could help deliver primary care faster and cheaper.
“There are hundreds of millions of people who still go without care for relatively simple diseases.”
China’s healthcare system has long grappled with a shortage of doctors, exacerbated by low wages and a dearth of local clinics and general practitioners. That means patients often crowd into large, specialist hospitals for even minor ailments.
Beijing has been trying to fix the problem, setting targets to increase the number of family doctors across the country.
However, the government has been slow to embrace technology within the healthcare system, held back by the challenge of digitalizing a sprawling, fragmented hospital system still dominated by public hospitals and state-run firms.
The policy winds may be starting to change. Beijing has enacted legislation over the last two years that has included strong support for internet-based basic healthcare services.
Premier Li Keqiang said this year that healthcare tech could “help alleviate the problem of inaccessible and expensive public health services that have long been a big concern”.
Now, Beijing may be about approve the sale of some prescription drugs online, creating a major opportunity for local and global firms, according to companies in the sector.
Janssens of Merck KGaA said the company had “good indications” that policymakers were addressing the issue of pharmaceutical e-commerce “as we speak”.
Li Tiantian, the founder and chairman of DXY, said the health ministry had met with healthcare companies like his own and planned to soon release a policy on “internet hospitals”, which would open up some online sales.
“I think the new policy will be released very soon, potentially in July,” he said.
The policy would allow approved hospitals to consult, prescribe and sell drugs to chronic disease patients online. However, regulatory concerns over safety and pushback from state-run distributors sank a similar plan several years ago.