➤ Beijing-based JD Health already uses artificial intelligence to review doctors' prescriptions.

➤ The company plans to focus more on chronic disease management and traditional Chinese medicine.

➤ The growth of online consultations will likely slow down after demand surged amid the pandemic, according to JD Health's general manager of Intelligent Medical Services.

Hong Kong-listed JD Health International Inc., the healthcare arm of e-commerce platform JD.com Inc., saw growing demand for online consultations amid the pandemic. Responding to the Chinese government's push to make healthcare more convenient, as well as demand from medical institutions, the company is also helping public hospitals in China move some of their services online, such as appointment booking and consultations.

China has about 900 licensed online hospitals, according to the National Health Commission. Some operators, like JD Health and Ping An Healthcare and Technology Company Ltd., better known as Ping An Good Doctor, are also selling drugs or insurance products.

Wang Dongyuan, general manager of JD Health's Intelligent Medical Services department, recently spoke to S&P Global Market Intelligence about the outlook of China's online medical consultation businesses and the company's strategy for future growth. The following is an edited transcript of the interview.

S&P Global Market Intelligence: How many online hospitals in China are operated by public hospitals versus private companies? Who will experience faster grow?

Wang Dongyuan: Among the 900 licensed online hospitals, the majority are operated by public hospitals. I think public hospitals, especially those lower-tier public hospitals, will see faster growth in the future because they already have the physical presence needed to apply for an online hospital license. Companies like us, however, will need to either form ties with public hospitals or build private clinics ourselves, which can be costly.

Also, regulators are encouraging public hospitals to expand their online presence. In general, I think online medical consultation businesses will still grow in the future, just not as fast as we have seen amid the pandemic.

What is JD Health's strategy for growing its online medical consulting business?

We will focus more on specialty clinics. So far, we have already started online medical consultations for specialty areas such as cardiovascular diseases and health management services using traditional Chinese medicines.

Traditional Chinese medicine is an area that we want to focus on because we believe it's a great direction for disease prevention and personal health management. It will also be helpful for chronic disease prevention and management, which we want to expand into in the future. Currently, about 70% of China's national health insurance claims go to chronic diseases. We believe we can help lessen the burden on the national medical insurance system by assisting patients to better manage their conditions.

We have also partnered with manufacturers of glucose meters and have the results uploaded to our platform every time a patient uses the device. We can then give suggestions on diet and physical exercise based on analysis of the data.

We will also form ties with public hospitals to enhance their operations [online]. For example, we can help digitalize medical records so doctors can use them more efficiently for future reference.

How will JD Health retain patients for its online consultation business? What are the key areas of competition in the future?

We are forming ties with more hospitals and invite more doctors to our platform, hoping to attract their patients to use our services for follow-ups. These patients are already seen by the doctors we invited and are more likely to follow the doctors to our platform. I also don't think regulators will allow online portals to give a first diagnosis any time soon, so we do need to work with doctors and hospitals. We will also attract more top experts who patients will find it hard to get offline. So far, there are more than 110,000 doctors offering consultation services on our platform and those we operate with public hospitals.

I think there is only limited room for companies to grow their revenue from online medical consultation businesses. Sales of drugs and insurance will be two important sources for revenue growth for most companies. The key advantage for JD Health is our supply chain capacity. We were also already profitable when we listed in 2020.

How are you using AI in your business?

Currently, we are using AI for triage and to review prescriptions. For prescription review, our AI system can now screen for potential side effects that can be caused by the drugs prescribed and alert doctors. That's the first step.

In the future, we hope to train the AI system so it knows what drugs are needed to treat certain diseases and the average costs, which can help reduce the possibility of over-prescribing therapies and bring down medical claims.