China's National Health Commission (NHC), the authority responsible for the medical industry, issued a new policy that calls for the regulation of China's fast-growing internet healthcare industry on Oct. 27. The policy is expected to lift regulatory constraints on China's internet healthcare industry and push the sector into the era of standardized development.

According to the NHC, as of June 2021, the number of internet hospitals in China had exceeded 1,600. The internet hospital is the provider of online medical services such as online consultations. The first internet hospital in China was established in 2015 in Wuzhen, Zhejiang province by digital medical service platform WeDoctor.

The regulatory policy on online medical consultation has been well received within the industry, with the release of the policy seen as beneficial to the development of the internet healthcare industry, especially for some large digital medical platforms that engage in online medical services.

The document, titled "Rules on the Regulation of Online Medical Consultation (Draft for Comments)," states that physicians are required to authenticate their identity before providing consultations to ensure that such online consultations are provided by certified doctors. Other people, AI software, etc. are not allowed to impersonate or replace the physicians themselves. As a result, some companies that focus on using AI technology to provide consultation services may be impacted.

China does not allow internet healthcare platforms to use consultations as a tool for the sale of prescription drugs. The policy proposes that the occurrence of unified prescriptions and prescription refills is prohibited, that the personal income of healthcare workers must not be linked to profits from drugs and medical examinations, and that doctors must not designate locations to purchase drugs and consumables.

In a report published by the People's Daily, Liao Jieyuan, founder of China's digital medical service platform WeDoctor, said he believes that the policy has released a clear signal that online medical consultation should be of the same quality as that provided by physical institutions. He added that the policy reflects China's determination to develop digital medical services, which is essential for the sound development of the internet healthcare industry.

China's 1.4 billion people have a huge demand for healthcare services, whereas physical hospitals fail to meet this demand. Platforms such as WeDoctor have leveraged technologies to help address the demand and supply imbalance in China's healthcare industry. 

According to a research report by CICC, with the regulatory policies for internet healthcare becoming more transparent and standardized, companies providing actual medical services with a sound regulatory compliance system are expected to benefit the most.

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