This is a challenge, but it also creates new development

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Gao Song: In the short term, medical insurance cost control policies such as DRG will have a certain impact on the ICL industry, but in the long run, such policies will drive the growth of outsourcing demand and thereby increase the penetration rate of ICL.

In China, the number of testing items that grassroots hospitals can provide is limited, while leading ICL companies can provide more diversified testing items, which is itself the basic demand of the ICL industry. International experience also shows that the implementation of medical insurance cost control policies often leads to a rapid increase in ICL penetration rate. As cost control efforts increase, hospital laboratories will face losses due to the lack of economies of scale, creating a need for outsourcing.

Moreover, unlike other medical industries that rely more on high fees and high profits, the ICL industry actually conforms to the trend of medical insurance cost control. In the context of medical insurance advertising data cost control, the number of outsourced projects in the laboratory department continues to increase, which not only helps to increase the industry penetration rate and scale, but also maintains a certain profit through economies of scale, and may even increase profits.

Looking into the future, we notice a clear trend: in 2023, the number of laboratories closed in the country exceeded the number of newly registered laboratories for the first time, and this trend continued in the first half of 2024. This means that the domestic ICL industry will show two major characteristics in the future: first, the penetration rate will increase rapidly, and second, leading companies will become increasingly concentrated.


Gelonghui: Yes, we have noticed that with the gradual implementation of the construction of close-knit county-level medical communities, more regional testing center models are being accelerated. In this environment, does ICL face greater competition?

Gao Song: opportunities for the ICL industry.

Building a regional inspection center is not as simple as adding equipment and expanding staff. It is a complex system project covering overall operation management. In this process, ICL companies can help medical communities and regional testing centers improve operational efficiency and quality, especially in terms of cost control.