New Episode: What a Series investor sees AI Use Differs in the US and China

Ray Yang is betting on AI health in China, believing a AI-powered post-surgery care offers great value to patients and a large room for growth.

During our discussions, Ray first compares the difference in AI use between the United States and China:

The United States – Business-Oriented AI (ToB)

AI applications in healthcare are primarily B2B such as:

Healthcare information systems: EMR, ambient scribe solutions (e.g., Epic Systems, Abridge).

• Insurance and claims processing.

• Drug discovery and pharma R&D.

Which means that:

• Hospitals, insurers, and pharmaceutical companies are clear buyers of AI solutions.

• Business models are anchored in institutional payment and reimbursement.

In China – Consumer-Oriented AI (ToC)

• AI applications in healthcare focus more on B2C:

  • Diagnostics (symptom checking, second opinions).

  • Online consultation, especially due to lack of robust primary care infrastructure.

  • Health report interpretation (routine physical exams are common).

• Fewer enterprise buyers, so companies lean toward consumer traffic and freemium models.

• Major platforms such as Baidu, Alibaba Group, Tencent Holdings, ByteDance are the main players.

2. AI in Healthcare Applications

Post-surgery Management Example (PCI)

• High demand for AI-enabled patient monitoring post-surgery, especially after stent implantation (PCI).

• Example: Chengdun-based Heart Med uses wearables + AI models to track patient recovery at low monthly cost (~200 RMB or $27).

• Doctors gain new revenue streams after value-based purchasing reduced device margins.

• Patients show high willingness to pay out-of-pocket.

3. Data Privacy and Infrastructure

• Regulatory barriers are less of a bottleneck than:

  • Fragmented hospital data systems.

  • Local hospital control of patient data.

• Patients in China are generally more willing to trade privacy for convenience.

• AI firms face major data cleaning and integration challenges.

4. Pricing and Business Models

U.S.

• Enterprise-based pricing and reimbursement.

• Insurance companies play a key role in funding and scaling.

China

• Freemium models dominate consumer-facing health AI.

• Traffic aggregation by tech giants mirrors the early mobile internet era.

• Payment largely out-of-pocket, especially for non-reimbursed services.

• 50% of healthcare spending is not covered by insurance.

5. Insurance Innovation & Market Shifts

Role of HuiMinbao:

• Low-cost (~100 RMB/year), widely adopted supplementary commercial insurance. to city residents in Beijing, Shanghai, Guangzhou, etc.

• Provides meaningful coverage for new drugs (e.g., oncology drugs, cell therapies).

• Operates with extremely low sales costs (<5%) vs traditional insurance (~45%).

• Acts as a bridge between public and private insurance, enabling more flexible care options.

• Demonstrates how scale can keep premiums low and expand coverage.

Growth of InsurTech in China

• Demographic pressures on social insurance funds create demand for commercial health insurance integration with hospitals.

• AI can facilitate claims processing, coverage matching, and cost control.

• Hui Minbao’s success is seen as a gateway for private insurance expansion.

6. Industry Ecosystem and Funding

• U.S. investment in AI (compute, chips, venture funding) is much higher than China.

• In China, major funding comes from government and internet giants.

• Open foundation models like DeepSeek power many hospital applications, while consumer applications are dominated by proprietary models (e.g., Doubao by ByteDance).

• Emerging collaborations between base model providers, consumer platforms, and vertical healthcare startups (e.g., in PCI, dermatology, chronic disease management).

Key Takeaways

• U.S. = B2B, infrastructure-driven, focused on hospitals, insurers, pharma.

• China = B2C, platform-driven, focused on consumer health tools, traffic monetization, and out-of-pocket payment.

• Insurance innovation (Hui Minbao) is reshaping China’s health AI business models, potentially integrating commercial insurance with care delivery.

• AI in health is growing fastest in vertical, high-need niches like post-surgery management.

Thanks for reading and listening,

-Brian

#AI #DigitalHealth #HealthTech #InsurTech #HealthcareInnovation #AIFuture #MedTech #AITrends #FutureOfHealth #HealthAI #AIDrivenHealthcare #SmartHealth #AITransformation