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Ep02: Jeff Chen on Building and Growing a Successful Startup Within China

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Transcript

00:04 Tony: Welcome to Digital Health Today, Asia Pacific Edition, your go-to podcast to learn about the transformation of health care in a region with over 4.5 billion people across more than 40 countries. I’m your host, Tony Estrella.

Today, I’m very excited to have Jeff Chen join us. He’s normally based in Hong Kong, but we’ve caught him on one of his frequent trips to China. His work has immersed him into this fascinating region with nearly 1.5 billion people who have high demands for health care. As we’ll learn, their needs may be similar to people from other parts of the world, but technology has created new and unique ways to support them. Jeff and I has spoken on various panels together and that’s how he first got to me. I’ve always valued his insights and his engaging manner when he shares his experiences with others. So let’s get started.

Jeff, tell our audience more about yourself.

00:52 Jeff: Hi Tony, thank you for the kind introduction. You know, very glad to be joining this podcast. So funny enough, I was actually born in Taiwan, but grew up mostly in the US, started off my career there. And it was late 2004, when I thought you know what, I’m going to put some international experience on my CV resume. And so I thought I will go to Hong Kong for two years, and then go back to the US. But once I got to Hong Kong, you realize, wow, that was at the crease of China, really, that the whole growth was just starting to happen, so that was 05-06. And it was just such an exciting landscape that I’ve been here ever since.

01:30 Tony: Oh, that’s exciting. I agree that the region is very dynamic in the way that technology has affected the way individuals live their daily lives, and you know, we’ll see that more in digital health. But so when you came here, you started off in the banking sector. Tell us a bit about when you would look at healthcare from the lens of a banker, what made you decide that you wanted to go from a broad technology view to focus more in healthcare specifically?

01:56 Jeff: Yeah. And I think healthcare is interesting, in the sense that you started off, I think, back when I first started in Asia, it was very much your traditional healthcare. So it’s more around offline healthcare services, hospital services. Asia, you didn’t even have that much biotech, right? And forget even talk about digital health or online health care.
And it wasn’t really, really evolved until probably I would say, around post 2010 when you start having the smartphone with the mobile internet revolution started taking off in China. And with the introduction of WeChat, introduction of all the payment system, then healthcare was starting to be one of the sector that people start to explore. And for many, many, many years, healthcare was never disrupted, and I think partly, just because healthcare is very difficult to do. Right?

You think about even today, most of the services is still done offline. So how do you integrate that with a pure so-called online platform or other industries such as retail, where e-commerce predominantly is being done online? There’s still some offline element of fulfillment and delivery, but your core experience and your core timespan is actually online. I think healthcare is actually the reverse, right? Your probably core span of time is offline. But there’s a lot of so-called technology or online element you can add to it to make the overall experience patient journey if you used to so-called that much better, and then over time, really to move forward to focus on how to make you healthy through data analytics.

03:27 Tony: Yeah, and this offline to online transition in healthcare is something that, especially at the doctor’s point of care, has to be carefully thought through from the consumer experience. Because it clearly can affect the interactions that people have with their clinicians. And so the company that you worked with in China, WeDoctor, tell us more give us some history about why you joined that business, and then what did you say in that transition? That was where digital health really started exploding as a result of the influence and impact of that company?

03:59 Jeff: Sure. So the company was starting 2010, the founder is called Jerry. Jerry first started this is because he actually went to a very painful experience himself. So he had this young knees who had a bolt on the leg around the knee. For many, many months, they would go around the hospital and imagine they would go at 3am or 4am in the morning, wait for hours until the registration or the appointment counter opens. Then once they open, they start thinking what doctor should I see, you know, let’s test out this GP referrals have a concept in China.

So then they will book appointment initially with, let’s say, a bone doctor in one of the specialists. Then they come to their basically for over a year and a half, finally, he had a surgery, and at the end it was a misdiagnosis. So from there he said, why can’t I just use technology, the internet online to make number one, finding the right doctor easier and then number two, get the appointment out of doctor much more efficiently rather than waiting in line at 3am or 4am in the morning? And so that’s how the business started.
So the core service at the very beginning was online appointment, right? So now you can start looking at, okay, this hospital has these doctors, what do they specialize? What type of so called is the, or what type of condition you may want to see these type of doctors? Then you are able to make appointments of these doctors. So then you always have increased efficiency. So that was the core business since 2010.
And then he evolved into really 2015 when WeDoctor got what we call the internet hospital license, the first internet hospital license in China. That allow them to do online consultation. That allow them to start giving out e-prescription. And so the evolution of online consultation started to take off from there. And then really, I think 2017 was the year when they realized this whole integrated, what we’ve been talking about online to offline experience is very important. So they start working with partners as well as building their own offline GP clinic, primary care clinics, so that they can have that continuous interaction of online first, then go offline, then back to online again. So that loop never breaks.

And really now they continue to move forward into working more directly with government as well. So basically, help alleviate some of the pain points that the government experiencing, which is their strong demand and supply imbalance, right? Everybody wants to go to these top tier three grade a hospital in China. But there’s only 11% of those in China versus 50+% of people want to go there. So how do we use technology to really alleviate that imbalance? So that is something that they work very closely with governments for.

06:44 Tony: Right. And that imbalance and disparity between number of available doctors to population clearly is something that can be helped along with technology. Take a step back from the health care front and look at broader trends in China, it’s a very digital-first, mobile-first society. So can you talk about the impact of how the use of WeChat and Taobao shifted the consumer mindset to create a rapid adoption to say, I will use healthcare on my mobile phone, there’ll be a way that I trust that platform? Because that’s not always the case.

07:19 Jeff: Yeah. No, interesting. So I think what makes China quite different, versus a lot of the other developed countries, whether that’s US or Europe, is that most of the people in China, their first touch point to internet was actually through mobile. So the adoption in terms of using everything on mobile is a lot higher than people, let’s say, from the US, right?

I mean, US people, even myself, where I grew up from a PC era, I still feel more, what do you call safer or comfortable doing, for example, my banking transactions on a PC, or on my MacBook versus mobile, but I think China mindset is totally different. Because I would probably say, majority, or I think the data, if I see was correct is 90% of people, their first touch point to internet was actually mobile.
And because of that, if you look at development of let’s say, WeChat, where it started as a messaging system, but now the ecosystem on WeChat, is so vast. And the interesting thing is, what the WeChat people see us out China is just a very small fraction of the capability of WeChat. In China, you will actually see all the function and services that WeChat can have. You could literally have just WeChat, that one app on your mobile and then go around do your daily life without having to have a wallet, without having to purchase ticket offline, or whether that’s train ticket. So you can call taxis. You can buy train ticket. Or you can see doctors, right? You can order delivery. Or you can play games. You can read books. You can listen to music. Is really, everything you want is around there.
Then there’s also WeChat Work for kind of your work environment communication calendar. It’s amazing. And then WeChat, obviously, Tencent now has Tencent video or Tencent meeting as well, which is basically the China version of Zoom. And so you have everything involved in that one ecosystem.

Alipay very similar, right? You open Alipay, you could literally get everything you want, very similar to… Your day entry to payment, but then now you can get everything around your daily services. Again, you can also see doctors, right? You can also get medicine.
And so the adoption is amazing. I mean, every time I’m in China, I do have zero use of my credit card or cash. I could go around without my wallet, no cash, no credit card, and you’ll be able to survive. Even a little street vendor, they will have a little paper with the QR code of your Alipay, and you just scan and you pay $1 RMB to buy whatever snack that you’re buying. So the adoption is so widely and so vast that you almost can’t live without it on the databases.

09:54 Tony: Yeah, and that’s pretty fantastic. I mean, if you think in terms of payment efficiencies and thinking about some of the challenges of how long it might take for cash to be passed across various parties and stakeholders in the healthcare system. We can contrast that with, yeah, I live in Singapore, and if we look at the GP structure here, there’s so much of it that’s paper based. You know, going to a GP, you have to fill out paperwork still. And then when you are paying for things, you’re still paying by credit card, and everything you get is a paper receipt. Can you talk a little bit about how does that removal of anything paper based influence and impact reimbursement for example, you know, how does reimbursement happen in China?

10:34 Jeff: No, I could give you a great example of paperless. I entered China three days ago, and at the border, you actually have to scan a QR code in your WeChat, and the customs, immigrations mini program pops out, so you have to fill all your form, do the WeChat mini program, then you will see a QR code. And as you pass the border, they scan your QR code, and then they know that based on your health and whatnot, that you’re good to entry. So there’s no paper, and it’s all done on a third party WeChat platform. So it’s quite amazing.
And I think if you think about what player like Tencent or WeDoctor have done is they enable you so that once you go into a hospital scene, for example, your information is connected, they can recognize who you are. So how much national health insurance is do you have, for example? How much private insurance you have? How much you need to pay out of pocket? That is all within that system.
So as you flow from as a registration to triage, to seeing the doctor to getting medication and the payment, it is all digital. And so there’s nothing you need to do to try to reimburse, for example. You don’t need to get a receipt and then go out and fill out a form and then send it to, let’s say, the insurance or the national health insurance when you get reimbursed, it’s all done electronically. Obviously, may not be the case across the whole country, but at least it’s not a major city like Sensheng, Shanghai, Hong Kong, Beijing. I mean, that is the case. And so the amount of so-called digital, I guess, footprint and ability of using technology to really make that seen this in China, it is quite amazing.

12:19 Tony: No, That’s really fantastic. Anything from a simplicity of the consumer journey, it’s really taken what we have seen in other sectors, whether it’s retail, or any type of commerce to bring it into healthcare, and really simplify the expectations on the individual to know, how do you get this paid for us, not just focusing really on healthcare? So I think from a consumer design and consumer experience, it’s really fantastic.
Are there any drawbacks to having that tight level of integration of your healthcare data with other forms of your data? Or is it all positives in terms of just having really seamless physician and clinician interactions?

13:00 Jeff: Well, that’s a good question. And I think there’s always a tradeoff between convenient-experience versus data privacy, right? So like I always say, to make the user experience, especially from online perspective, very, very, very good, you always need enough data so you can provide very customized type of service to individuals or to users. But the tradeoff of them, obviously is well, and my exposing too much, or I’m giving up too much data?
I would say probably the difference between China and maybe, let’s say US, is these data in the US tend to be controlled by private enterprises, whereas I would say China, it is very closely monitored by the government. Yes, it flows to some of these private enterprises, but the government have access to that as well. And so it’s kind of providing the convenience, but without having to worry about data breach getting for some these experience that you would have in China versus let’s say, the US.

14:02 Tony: Yeah. And I think privacy is always going to be a point of contention. I think regardless of what mechanism is used in whatever country, there’s always, as you said, that tradeoff of who has access to my data? How are they using it? Is there an impact to me as an individual? And I think, for the foreseeable future, we will always be tackling and trying to deal with those challenging questions across not just healthcare, but our daily lives.

So one of the other things that I think is very impactful about that type of experience, is in Asia, one of the common themes is family members really are tightly knit in a household in terms of family care. You see that in terms of many types of intergenerational households: China, Singapore, you know, they really have that. Can you talk a bit about how does data and family care component work in a place like China and WeDoctor?

14:56 Jeff: Yeah. So I always like to say the reason why healthcare so far, and I don’t think in any near future time that we will actually see an AI replace doctor, is because human beings, they’re not standardized, right? So they’re not like chess where there’s X number of moves. You can map out every single move and put it into a computer and they can calculate much faster than any human beings they can.
I think, when it comes to healthcare, let’s say I live in Hong Kong right now, if I move to Beijing next year, over the next three years, in terms of my health, in terms of my long is probably going to be quite different than if I will continue to stay in Hong Kong. My DNA, my background, my parents, kind of what genetic stuff they have also impacts that a lot.
And so as we start to think about, how do we provide a much more targeted individualized, I call it a holistic program or health related holistic program to any individual? Part of their mapping, obviously, is their family history, right, and their family background. And so I see that as an important part of the data input or information to make that mapping on any individual much more accurate. And so that’s important.

I think that’s something that China, I know quite a bit of, the various players are trying to do. And then also a lot of various players are trying to basically provide these packages where it is really family based. Because in China, private health insurance, penetration is still very low. We’re talking about like miss single digits. And so a lot of so-called more innovative or leveraging technology, online healthcare players, I tried to come up with these, I would say, almost quasi insurance or HMO type of product. It’s much more light touch. It doesn’t have to cover all the elements like someone like Kaiser Permanente would have from the very initial GP touch point all way to the hospital. But it’s about, wait, can I help to cover your daily or annual needs on general health care without the critical illness, without the life savings type of services? And that tend to be offered to a family plan in China without these players?

17:15 Tony: And what about the role of traditional Chinese medicine TCM? How does that get incorporated or excluded when it comes to the holistic care that families either seek out as based on their cultural preference or what’s provided by the clinician? How is that intertwined or separated?

17:35 Jeff: That’s an interesting question. And I tell you, last time when I was in China, when I saw a doctor just for simple cough, runny nose, the medication I got was, and this was a Western internal medicine practitioner, the medication I got was part Western medication as well as TCM medication.

So I think TCM is an element that it plays an important part in the overall Chinese culture. So I don’t think you can really separate out and say, hey, it’s all Western, it’s all TCM. WeDoctor previously when we were working, we were working on a TCM AI enabler. So what that means is, the traditional TCM is you put your arm on the table, someone would put their fingers on your wrist, and then try to figure out what your body type is, what you need. Is it too cold? Is it too hot? Is it too humid? Is it too dry? And then they try to give you the various TCM medication to balance your body.

And so what we created was we went and spoke to a number of very highly regard, leading TCM practitioner, and then just asked him, what are some things you look for? And I try to put that into a context of a question. And so then you just have to answer these questions and they come up with similar results as what a TCM doctor would do if they put their hand on your wrist. So that was quite interesting.
But I do think TCM there is also an element of could be disrupted over time by healthcare services. And I think in China, it’s going to be quite integrated, and not very separate from each other.

19:12 Tony: Yeah. And you can see that outside of China as well, where there’s a large Chinese cultural influence, say Singapore or Malaysia, you know, you do certainly see widespread use of TCM as an available treatment option or care option and preventative medicine option for people. You know, you’ve had this broad view as a banker working in a technology, disrupter like WeDoctor working in healthcare systems, what are your thoughts on trends for the next two to four years? What are some of the bigger picture takeaways that you would say people should be tracking as to what to expect?

19:48 Jeff: I think one thing that’s happened is that adoption is increasingly accelerating. And when I say adoption, not just on the user side, but also on the social providers’ side or the doctors, right? The difference between I think health care or ride sharing, if I take that example is that ride sharing, you could offer an incentive of, today, I give you $50 saying, I give the driver to drive for me. So everybody will go from, let’s say, Gojek and/or Grab to go and drive for Grab today, because of that $50 seeing incentive. Tomorrow, if Gojek does the same thing, everybody go drive for Gojek tomorrow. And now they use the same thing where I give you a $10 off coupon for your first ride, and people will try it, so that adoption is always much easier.

But when it comes to healthcare, it is quite different. Because imagine a doctor that $50 sent to him is probably just not as important, as well as they probably care more about, okay, what is the platform I’m looking for? What is the reputation? With this potentially hurt my reputation? What is the medical liability? So there’s a lot of things that go down the checklist before I even think about the money.
So adoption on service providers has always been fairly low, or fairly slow. And then on the user side, I think it’s similarly, historically, it has always been okay, yeah, I see a doctor even do a video online. But how much can you really solve my problem would? Plus you haven’t seen my throat, you haven’t listened to my breathing, you haven’t done all these vital sign collection, so how accurate can it be? Or is this just more like an assessment. And so the user adoption also tend to be I mean, it’s higher than the service providers’ side, but it’s still not as high as I would say the other industry that’s been disrupted. But then I think because of various reasons, one of the key thing, I think it’s because of COVID, you got both users as well as service providers are starting to adopt to that.

And then second, you also seem to have more and more technology, especially whether it’s wearable, was now the hardware that can collect a lot more of a person’s vital sign, so that remote online consultation is going to become more and more accurate over time. Because the more vital or the more data these doctors can have whenever they do consultation with you, the more accurate is going to be. And so with that, I think, you look at Apple Watch now, right, the new Apple Watch 6, you can get EKG, you can get blood oxygen level. So there is an element, more information being collected to these wearables and other hardware devices. And so that will make remote consultation better.
And so in the next two to four years, in my mind is going to be adoption of online healthcare or online consultation is going to be much more widely adopted. That’s number one. We’re going to see more and more technology investment in ability to collect these key vital signs, whether that’s wearables, or to some of these hardwares. And then I do think that we will also see more and more data driven or AI enablers where they can make the consultation even more accurate, more efficient for service providers. So I do see that as next two to four years.
And what I would love to see, and I think this is probably still a question mark, is that there would be a lot more integration, whether that is information sharing, or data sharing between various public, private hospital clinics. So that as a user, if I go into clinic A, that’s under a different group, and I go to a public hospital after that, that data and that integration happens, right? So I don’t have to redo the test over again. And then post me visiting there, I still have all those data on my healthcare super app plan, for example, right? So the data is now sits with me, it just goes everywhere with me. So in case I moved somewhere else, I see a new doctor, doctor has a history of you. So my history, my profile is out there.

I would love to see that. I’m not sure that will happen in the next two to four years. That’s always a very contentious topic. But I think that would be great if you see something like that.

23:56 Tony: Right. Well, I think those are all relevant trends that we can keep our eye on. And one last question for you in terms of broader China trends, in technology, in the general sector for we look at mobile devices or consumer services, business models, and the actual business company leaders tend to be very Chinese, right, entire ecosystem inside of China of Chinese companies. Do you see that healthcare will follow that pattern? Or do you see that there’s way that companies outside of China can also play a meaningful role in helping to disrupt and improve health outcomes for individuals?

24:35 Jeff: That’s a very good question. And I don’t think there is a direct answer, in the sense that I think the thing you have to remember is there is a lot of sensitive data, as in healthcare data, individual healthcare data is considered very sensitive. For example, would there be let’s say Amazon health come in, and then also it can really disrupt overall healthcare system and be able to collect all these data of individuals in China? I don’t think that’s likely. I think likely, is probably less than the giant like WeDoctor who has that platform, but they leverage technology that outside of China, whether that is from US from Israel, and then retake that to service the people within China.
Then I think that is probably something and a trend that you see that’s more doable. Because my experience on WeDoctor is, I can tell you that the data relating to health care of individuals is considered highly sensitive. And so I think it’s less likely that you’re going to have any big technology platform or players from outside China to be able to come in and do everything by themselves. I think very much is going to have we have local players that are local partners, and then we leverage our technology to service them. I think that’s going to be how the structure will look like.

25:55 Tony: Okay. So the interventions themselves, whether it’s prevention, or digital therapeutics, will have the likelihood of having success in China then?

26:02 Jeff: Yeah.

26:03 Tony: Very helpful, Jeff. Thanks. And how can our audience get in touch with you?

26:07 Jeff: Feel free to find me on LinkedIn. I would love to share and chat with people be interested in this sector.

26:14 Tony: That’s great, Jeff. We’ll include a link to your profile in the show notes. I wanted to thank you again for joining us. It’s been incredibly insightful, and I look forward to having you on again in the future.

26:24 Jeff: Thank you. Thank you, Tony, for inviting me to the show.

26:27 Tony: And that’s a wrap on this episode. Before I go, here’s how you can help us. Please share this podcast with others, and if you subscribe, you’ll get updates on new episodes and other content. You can also get in touch with me on twitter at EstrellaVino using the spelling of my last name, or email at [email protected] if you have any questions, suggestions, or ideas for future episodes.
And finally, please visit our website at digitalhealthtoday.com. We’re on our second home at Health Podcast Network to hear other episodes from a podcasting team including Dan Kendall and Eugene Borukhovich. The show was researched and written by Taliossa and is produced by Mission Based Media. The sound of music was by Ivan Yurich. And until next time, I’m Tony Estrella and thank you for listening.

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