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On August 15, media reported that Ant Group was planning to acquire Good Doctor Online and merge its business into Alipay's healthcare division. On the 15th, Good Doctor Online told the National Business Daily that it would not comment on the news and that the official announcement should be taken as the standard. Alipay also did not give a clear response.

As one of the earliest companies involved in Internet medical care, Haodafu Online received a round of financing led by Tencent in 2017, with a valuation of US$1.3 billion to US$1.4 billion at the time. According to reports, in 2022, the company's CEO Wang Hang issued a "Letter to All Employees", clearly proposing to "get rid of dependence on financing and decisively become a self-sustaining company."

The outside world does not know whether Good Doctor Online, which has experienced large-scale layoffs, has become a self-sustaining enterprise. However, with the capital market cooling down, the early leaders of Internet medical consultation are not having a smooth life now.

Image source: Alipay screenshot

"Good Doctor" appears on Alipay, the most expensive doctor charges hundreds of yuan for a one-minute telephone consultation

Although the news of the acquisition between Haodaifu Online and Ant Group has not been confirmed, the cooperation between the two parties has already begun.

On the afternoon of August 15, a reporter from the Daily Economic News entered "medical health" on the Alipay homepage and entered the relevant channel. After selecting "consultation", the words "Good Doctors Select National Experts" can be seen in the scrolling poster in the middle of the screen, with the three words "Good Doctors" in eye-catching red.

After clicking to enter, the content presented on the page is exactly the same as the "Expert Consultation" interface in the Haodaifu Online App. The online consultation services provided by doctors mainly include text and picture consultations and telephone consultations.

Image source: Alipay screenshot

The reporter sorted the prices from highest to lowest and found that the most expensive doctor's text and picture consultation price is 1,200 yuan/2 days, and the price of telephone consultation is 1,500 yuan/10 minutes; the cheapest doctor's text and picture consultation price is 0 yuan/1 day for exclusive follow-up examinations for postoperative patients, and the price of telephone consultation is 100 yuan/10 minutes.

For patients who are used to offline medical treatment, online consultation is "time is like gold", but from the slogan of Good Doctor Online "make medical practice simple and seeing a doctor is not difficult", the company's pursuit is to improve the efficiency of patients' medical treatment rather than reduce the price of services. However, is this sentimental business easy to do?

One question is, has the company explored a relatively stable business model? Wang Hang said in an interview with the media that the company's revenue was once mainly from online diagnosis and consultation service fees. After April 2022, the company began to increase platform service fees. The diagnosis and consultation service fees belonged to the doctors in full, and the platform service fees belonged to Good Doctor Online. In March 2023, Good Doctor Online launched a follow-up service package for internal medicine physicians, mainly for patients with chronic diseases.

On the other hand, online consultations have many restrictions and it is difficult to satisfy everyone. According to Heimao Complaints, in the past 30 days, Haodaifu Online has received 40 complaints. The main reasons are: first, in the limited online consultation time, the doctor did not respond in time, resulting in a short communication time; second, the doctor's reply was not helpful to the patient, and the customer service was not helpful; third, the platform disclosed the patient's information without the patient's consent, infringing on personal privacy.

After the layoffs in December 2022, Good Doctor Online achieved a break-even in the first quarter of 2023. According to reports, Wang Hang issued a "Latest Company Situation Statement" within the company in June 2023, which mentioned that the company's losses were improving rapidly. However, facing the huge pressure of shareholders withdrawing their capital and demanding redemption, the adjustment plan did not meet expectations.

According to an industry insider, the profit model may be the most important thing now. He analyzed: "Internet giants now have little motivation to acquire loss-making targets, unless the transaction price is really appropriate or it is helpful to their own business."

Industry insiders: Good Doctor Online will not become an upstream prescription tool for medical e-commerce

Around 2015, Internet medical services were divided into two camps: "selling medicine" and "seeking medical advice". Among them, companies represented by JD Health and Ali Health belong to the former, which are mainly engaged in medical e-commerce and are the first to achieve profitability; companies represented by Good Doctor Online, WeDoctor and Chunyu Doctor belong to the latter, which focus on improving the quality of medical services and constantly explore business models.

Up to now, almost all the "seeking medical advice" groups have not achieved "self-sustaining blood". For example, WeDoctor has failed to achieve IPO many times. According to multiple media reports, its prospectus shows that the company's adjusted net losses from 2018 to 2020 were 415 million yuan, 757 million yuan, and 869 million yuan, respectively, with a cumulative loss of 2.041 billion yuan. Ping An Good Doctor (HK01833), a subsidiary of Ping An of China, has not made a profit since its listing. In 2023, the company suffered a net loss of 335 million yuan; Pharmacist Bang (HK09885) lost 3.207 billion yuan in 2023; 1 Pharmacy Network (NASDAQ: YI) had a net profit of -393 million yuan in 2023.

This also lowered the capital market's expectations for online diagnosis and treatment. In July this year, after the Internet chronic disease management platform Ark Health (HK06086) landed on the Hong Kong Stock Exchange, it fell 44.62% on the first day. But it is worth noting that from 2021 to 2023, Ark Health's revenue increased from 1.759 billion yuan to 2.434 billion yuan, and the adjusted net profit in the three years was -207 million yuan, -89 million yuan and 7.165 million yuan respectively, that is, the company turned losses into profits in 2023.

A reporter from "Daily Economic News" noticed that although Ark Health claimed that it had transformed into an online chronic disease management platform, from 2021 to 2023, the company's online retail pharmacy service revenue was 1.011 billion yuan, 1.252 billion yuan and 1.297 billion yuan respectively, accounting for more than half of the total revenue.

Has such a transformation occurred within Good Doctor Online in the past few years? The answer is probably no.

According to Wang Hang’s internal speech in 2021, in order to ensure that the business does not deviate from its vision, Haodaifu Online has "three don'ts": do not make profits from the drug sales link, do not open physical hospitals or invest in physical hospitals, and do not engage in medical advertising business for patients.

The "three no's" are also likely to be important criteria for Good Doctor Online to select partners. On August 15, an insider told reporters that although there is no definite acquisition news, based on his understanding of Good Doctor Online, Good Doctor Online should stick to the medical service track and may not get too close to medical e-commerce to avoid becoming an upstream prescription tool for medical e-commerce.

Daily Economic News