The health care IT sector appears to be booming in the U.S. with EHRs, medical apps, and artificial intelligence software like Watson that are popular with both clinicians and patients. But according to a report by Bloomberg, China’s hopes to cash in on online and digital health care platforms have yet to catch on. It appears that lack of data and too much regulation have forced the global economic titan to reconsider its strategy if companies hope to make money.

Three years ago, Jack Ma retail magnate and founder of Alibaba, China’s largest e-commerce site, launched an initiative called Ali Health to bolster the country’s health systems by streamlining processes with drug-tracking software. For example, patients could have a remote consultation with a doctor, and then prescriptions could be delivered directly to them. No visits to the doctor’s office, no need to run to the pharmacy with China’s large, aging population developing chronic diseases such as cancer, this seemed like a no-lose proposition.

Around the same time, other major companies began to develop their mHealth solutions. Baidu, China’s version of Google, followed suit and created a chatbot that performs basic medical triage to help make better diagnosis for patients and lessen in-office visits for overburdened physicians.

But all of these companies are losing money. Ali Health alone claimed a $30 billion loss last year.


Ali Health’s woes began after regulators pulled out of a contract for a drug enforcement and tracking system the company created. This paired with the fact that Chinese insurers, many of which are government run, are less willing to work with internet firms, opting instead to stick with state-run hospitals.

Lack of patient data is the main problem for Baidu’s AI platforms. Much of China’s health information has yet to make its way online, and that’s made it difficult to develop algorithms that are of any use to consumers. According to Bloomberg, the company will close most of its medical businesses, including online doctors’ appointments, and focus on AI.

There’s still hope among investors and developers that mHealth will rebound for companies working within the current parameters. And, importantly, the Chinese government has shown increasing support for online ventures.