China’s Internet giants, including Alibaba’s financial arm Ant Financial Services Group, search engine Baidu and on-demand local service company Meituan Dianping, are aiming to provide health care security services to one third of the country’s population within the next five years, according to a new whitepaper.

By 2025 users of China’s online mutual aid industry will increase three times to reach 450 million, according to the whitepaper released by Ant Group on Thursday.

Mutual aid platforms, which operate as a collective claim-sharing mechanism offering basic health plans to assist those facing critical illnesses, are popular among China’s low and middle income households in rural areas which often lack quality hospitals and good medical care.

Participants share the cost of a claim only when it has been verified - so a 1,000 yuan claim for medical treatment by a person would end up as a cost of 1 yuan (61sen) each for a pool of 1,000 people in a mutual aid scheme.

The whitepaper was based on a survey of more than 58,000 users, with the majority living in small cities and rural areas, earning less than 8,333 yuan per month.

Online mutual aid platforms have become a “complementary force” in China’s health care system, according to Zheng Bingwen, director of the World Social Security Center at the Chinese Academy of Social Sciences and an adviser on the whitepaper.

The reimbursement rate for serious diseases under China’s public health care system is capped at 60%, leaving patients to pay the balance themselves, according to the state-run Xinhua New Agency.

Online mutual aid programmes can reduce out-of-pocket expenses from the treatment of critical illnesses from 40% to below 20% for patients solely dependent on public health care coverage, the whitepaper said.

China has dozens of online mutual aid platforms, with the three biggest players each having more than 10 million members. By the end of March, Xiang Hu Bao, the mutual aid health product under Ant Group, had more than 100 million members and helped over 28,000 people in total.

In the same time frame, Waterdrop Mutual and Easy Mutual - both backed by Internet giant Tencent Holdings - had garnered 14 million and 15 million members respectively.

Last year, China’s big Internet companies including Baidu, Meituan Dianping, Didi Chuxing, JD.com, Suning and Qihoo 360 jumped into the online mutual aid industry by setting up their own platforms.

“As awareness and concerns about health care needs grow in China, especially since the Covid-19 outbreak, public demand for more comprehensive and diversified health care coverage will continue to rise,” said Yin Ming, vice-president of Ant Group.

“Online mutual aid platforms will have an increasingly important role to play in providing a basic health plan for people, who can then choose from a wide range of health care services and policies.”

Alibaba is the parent company of the South China Morning Post.

 - SCMP