China's Online Healthcare Industry [PT 1]: Tech-Driven Medical Waste Management

China’s online healthcare industry has maintained rapid growth in recent years. According to consulting firm Frost & Sullivan, China’s online medical service market was worth RMB11bn in 2016, and is expected to reach RMB33bn in 2020 and RMB200bn in 2026. Data company 36Kr’s research division sees that the country’s online healthcare industry has gone through multiple phases from slower stages of development to revitalized expansion, caused by the ongoing COVID-19 pandemic, presented in the chart below.

Five Phases of Online Healthcare Industrial Development
*Citing 36Kr Research*

From 2000 to 2010, a period that 36Kr refers to as the embryonic stage of China’s online healthcare industry, various internet medical platforms including DXY.cn began offering services such as online appointments, consultation, etc. DXY.cn is an online community for Chinese healthcare professionals, engaging in medical information sharing service and data management as well as the operation of wholly-owned clinics.

Later, promoted by internet development and tech advances, the Chinese online medical industry saw booming development and peaked in around 2016 with a growing number of financing and investment deals made in the sector.

However, as most of such platforms failed in forming a sustainable business model to retain customers, the sector experienced sharply reduced market players since 2017. According to Yicai, citing market experts, less than 1% of online medical services providers survived from the increasingly fierce competition before the COVID-19 pandemic.

At the beginning of 2020, the sudden outbreak of the global health crisis revitalized the industry. Social distancing measures such as transportation limits and other approaches to slow the spread of the pandemic restricted patients with other health issues from going to hospitals and thus increased the demand for online inquires. Online healthcare consultation hence became a more viable, and safer alternative for patients during the nationwide lockdown. For instance, Ping An Healthcare and Technology [1833:HK], also known as Ping An Good Doctor, recorded 1.11bn visits to its online platform during the pandemic period as of February 10. The number of newly registered users on its mobile app also surged by 10 times during the same period.

Development of online healthcare services and technology facilitates better medical waste management

Hazardous medical waste generation saw an increase in volume in China, particularly, amid the COVID-19 pandemic. Because the global epidemic created more situations to produce medical waste such as diagnoses, treatments, and daily use of facemasks, this significantly increased the need for better management of medical waste. Hence, Chinese top policymakers have been offering support to enhance the country’s capability of collecting and disposing of medical waste. For instance, regulators launched an action plan in February, urging each city above prefecture-level to build at least one qualified disposal facility by year-end 2020.

From January 20 to March 10, the country disposed of 6,022 tons of medical garbage per day, up by 23% compared to the national capacity prior to the health crisis. Though China has made improvement in overall medical waste management, many cities still are incompetent in properly handling and processing such garbage. China Fortune Land Development’s [600340:CH] thinktank estimated that the amount of medical waste generated nationwide in 2018 was approximately 2.3m tons. However, 200 large and medium-sized cities only disposed 816,000 tons of waste in a non-hazardous manner in the same year, indicating a large portion of improperly handled waste.

Presently, incineration and landfills are the two most common approaches for medical waste management in China (for more information, refer to Overview of How China’s Municipal Waste is Managed). According to the World Health Organization, improper handling of such waste may release pathogens and toxic pollutants, thereby indirectly adding health risks. Specifically, the flawed construction of landfill sites might contaminate drinking water, and the burning of waste emits pollutants and produces ash. Additionally, China’s medical waste treatment sector primarily adopts traditional supervision methods, which require supervisors to conduct on-site investigations to monitor the entire process involving waste collection, storage, transportation, and disposal. However, the process, which takes a longer period and involves various parties, is under relatively loose regulation in China. This might trigger illegal practices such as trading waste for self-interest or arbitrarily discarding the waste.

The online healthcare industry has begun to use technologies such as big data, and internet of things to enable digital monitoring, which has been more effective in overseeing the entire waste treatment process. Specifically, smart medical platforms are capable of tracking sources of waste, automatically operating disposal equipment, and even allowing the public to participate in monitoring. Hospitals can also form an internal mechanism for waste management, keeping electronic records for each item of trash.

Hence, many regulators have incorporated emerging tech into medical projects, in order to improve the efficiency of governing medical waste management. For instance, in 2017, local authorities in Suzhou city launched an internet-driven project for medical waste management, aiming to leverage online monitoring platforms and mobile apps to trace the entire treatment process. In another example, the Guiyang municipal government has been piloting a monitoring program since 2017, tracking barcoded medical waste.

Look out for Part II, which will address medical resource imbalances.

References:

https://www.tmtpost.com/3818152.html

http://www.21jingji.com/2020/3-12/xNMDEzODFfMTU0MjIxNQ.html

http://huanbao.bjx.com.cn/news/20200320/1056269.shtml

https://www.yicai.com/news/100524994.html

https://www.who.int/zh/news-room/fact-sheets/detail/health-care-waste

http://finance.eastmoney.com/a/202011281718187486.html

https://www.cn-healthcare.com/article/20180828/content-507406.html

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