Alibaba to create the first “cloud hospital”

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Already running the world’s biggest online marketplace incorporating an online infrastructure for commerce and data technology that touches the lives of millions of consumers and traders worldwide, Alibaba is now moving into healthcare.Alibaba’s cloud computing subsidiary, has entered a deal to build what it calls the first “cloud hospital” in China, reports TechCrunch. According to the article Aliyun has partnered with Xi’an International Medical Investment and DHC Software to create a hospital administration platform with the aim to improve the quality of medical care by making it easier for organizations to manage individual patient cases and analyze aggregated health data. Aliyun is Alibaba’s cloud subsidiary.

Xi’an International Medical Investment, which manages department stores and real estate as well as medical facilities, will be in charge of bringing the “cloud hospital” platform to market, while DHC Software will focus on its development. Aliyun, meanwhile, will contribute data analysis, cloud computing services, online-to-offline healthcare, and online payment support.

In a prepared statement, Xi’an International Medical Investment’s chairman Jin Shi said that the new platform will allow hospitals to share information more quickly and reduce the amount of time patients spend in waiting rooms by allowing them to register for appointments or make payments online. The software’s analytic tools may also eventually help doctors make accurate diagnoses by making it easier for them to access a patient’s medical records from other hospitals and also check family health information.

Healthcare reform gaps create huge opportunity

Before the onset of healthcare reform in China at the start of the twenty-first century, the scope and quality of healthcare was poor. The healthcare system was underfunded, urban and rural service inequalities prevailed, and products and services were overprice and of low-quality. Much of the population had little or no access to medical care.

With active government intervention healthcare reform in China has made significant progress. According to the McKinsey report Health care in China: Entering ‘uncharted waters’ expenditure on healthcare is projected to grow from $357 billion in 2011 to $1 trillion in 2020. China’s government insurance programs have extended coverage to more than 95% of the population.

Coverage remains basic, however and migrant workers can only claim benefits if they travel back to their villages that they come from. China also has a fragmented medical supply chain and a shortage of physical pharmacies in less developed areas. All these factors create opportunities for innovators like Alibaba to tap into the healthcare needs of the Chinese population.

Other Alibaba healthcare initiatives

Alibaba sits on a wealth of consumer data which the company has always said it wants to take advantage of and put to good use. The plan is to leverage the loads of data on its platforms like Taobao to help reinvent China’s healthcare system.

Last year, Alibaba invested in pharmaceutical data business CITIC 21CN, later renamed Alibaba Health Information Technology. Following the investment, Alibaba began introducing healthcare-related functions into its mobile shopping and e-payment apps.

Earlier this month the Alibaba Group announced it will transfer its online pharmacy business to Hong Kong-listed Alibaba Health Information Technology. In a $2.5 billion deal, Alibaba Group will inject the e-pharmacy operations of its shopping website into Alibaba Health in exchange for majority ownership in the digital healthcare company.

By integrating Tmall’s online pharmacy marketplace, called, Alibaba Health will be able to offer consumers the widest range of pharmaceutical and healthcare products available in China, company officials said.

The company foresees that the integration of Alibaba Health will enable it to build a healthcare ecosystem that can utilize e-commerce, big data and other technologies to improve the healthcare supply chain and better healthcare experience Alibaba Group COO Daniel Zhang said in a statement.

Alibaba Health has a website that among other services offers an appointment-booking and medical information platform for doctors and clinics. Consumers can download a mobile healthcare app called Alijk to locate drugs available at nearby pharmacies, consult online with pharmacists and place orders.