Over the past decade, the cross-border medical intermediary industry has experienced a boom, followed by a sharp decline during the pandemic. It has only been after the pandemic that the industry began to recover, but very few companies have managed to endure to this point.

Recently, the company Shengnuo Yijia announced a partnership with the Hong Kong Yanghe Medical Group, launching a patient service center in the Yanghe facility to assist critically ill patients from mainland China in seeking medical treatment in Hong Kong.

Previously, Shengnuo Yijia focused on bringing patients to the U.S., U.K., Japan, and other overseas regions for treatment. Now, they are increasing efforts to explore the Hong Kong medical market. How should we view this change?

According to Shengnuo Yijia Chairman Cai Qiang, cross-border medical services have entered their next phase. The key question remains: Where are the new opportunities in this industry?

Seeking Treatment in Hong Kong

Founded in Beijing in 2011, Shengnuo Yijia emerged amidst a surge in cross-border medical services, with thousands of intermediary agencies popping up—some focused on cancer treatment, while others delved into high-end health checks, assisted reproduction, and cosmetic procedures, fueled by both significant capital investments from firms like Sequoia Capital and market demand from patients seeking advanced treatments.

The pandemic, however, brought the industry to a standstill. Travel restrictions meant many patients were unable to go abroad, severely impacting the cross-border medical services sector. Shengnuo Yijia, among others, faced substantial losses, with revenues plummeting and some institutions exiting the market.

Post-pandemic, Shengnuo Yijia's business has gradually recovered. "By 2023, our revenue has returned to pre-pandemic levels," Cai said in an interview with Yicai Global.

Yet, compared to before the pandemic, significant changes have occurred in the industry. "Before the pandemic, there were only about five or six agencies focused on critical patient services in cross-border medical care. Now, very few remain, making this a tough sector to operate in," Cai noted.

The patient demographic is also shifting. Traditionally serving high-net-worth individuals, the decision-making process for seeking overseas care has lengthened due to cost considerations. Patients who once decided in two weeks may now take a month or more.

On the other hand, the trend of mainland Chinese patients seeking treatment in Hong Kong is increasing.

For instance, the Yanghe Hospital in Hong Kong, which provides proton therapy specifically for cancer patients, has seen a rise in the proportion of mainland patients receiving this treatment—from 10% to 14% recently.

"Hong Kong has distinct geographic advantages, such as convenience of transportation and cultural similarities, making it closer to mainland patients. Additionally, the rise in high-end insurance purchases by mainland tourists means that some of these policies can be used in Hong Kong private healthcare, significantly alleviating the financial burden on critically ill patients," Cai explained.

Not Just for Chinese Patients

In terms of introducing new drugs, Hong Kong’s pharmaceutical approval system is now fully aligned with international standards, which allows for faster introduction of overseas drugs to the market. Typically, a new cancer drug approved in the U.S. can become available in Hong Kong within months.

Cai believes that national policies have emphasized strengthening healthcare cooperation in the Guangdong-Hong Kong-Macau Greater Bay Area, simplifying cross-border medical procedures and promoting the flow of medical resources. This development presents new opportunities for cross-border healthcare services.

It’s worth noting that, as China’s regulatory reforms continue to facilitate the approval of innovative drugs, the time it takes for advanced drugs to enter the mainland market has significantly decreased.

On September 8, the Chinese Ministry of Commerce, the National Health Commission, and the National Medical Products Administration jointly announced a pilot program to expand foreign-funded hospitals in cities like Beijing, Shanghai, and Guangzhou.

While these developments may not signal favorable conditions for cross-border intermediaries, Cai asserts that opportunities still exist. When patients choose cross-border healthcare, they not only seek the latest medications and technologies but also a superior healthcare experience, especially high-net-worth clients who demand confidentiality and high-quality medical service.

"The demand for top-tier medical resources in fighting major diseases, especially advanced cancers, will always exist—much like studying abroad or tourism," Cai said. Moving forward, the collaboration with Yanghe Medical Group aims to provide greater convenience for mainland patients seeking treatment in Hong Kong and to introduce more international medical technologies and solutions.

The newly launched patient service center at Yanghe will offer comprehensive management services for mainland patients traveling for treatment. It can also initiate international multidisciplinary consultations as needed.

"The current medical tourism market is enormous," Cai emphasized. While the cross-border medical industry has entered its next phase, Shengnuo Yijia is not only focusing on Chinese patients but is also exploring opportunities to integrate medical resources, seeking to attract patients from Australia, Vietnam, Malaysia, and beyond to seek treatment in Hong Kong.

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