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.
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.
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.
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.
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
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