Background and Challenge

L.E.K. Consulting was approached by a leading provider of diagnostic and pathology lab equipment to support the development of an innovative telehealth solution focused on digital pathology health IT. These types of services are at the introduction stage in the U.S. and are well-accepted by the market, but there are questions over its readiness in China.

Our client enlisted our help in building a robust view of the structure and segmentation of a fast-evolving market and an understanding of the decision-making processes for healthcare, hospital and diagnostic pathology services in general. The client required these insights in order to identify the most suitable business models and service solutions in China.

Approach and Recommendations

Leveraging our experience, We analyzed China’s remote pathology services market and developed alternative business models based on patient volumes, available resources and the current pathology capabilities of different hospital tiers.

Referencing nearly 50 interviews with lab directors and hospital executives - conducted as part of a bespoke primary research program for the client - we built a robust fact-base strategy that guided the direction of our client’s business in China. Our analysis:

  • Identified key unmet needs faced by both physicians and pathology lab technicians
  • Explored the current referral practice in China for second opinions and consultations for patients facing complex medical conditions
  • Established the likely intensity of competition, both today and in the future
  • Tested potential business models to identify which model would be better suited to the different needs of each segment of the market. These tests included assessments of the economics associated with each model
  • Together with the client, we helped define the business model to best capture the opportunity of introducing this service in China


The project provided the client with a better understanding of the Chinese market and how they can best capture the opportunity. This has been critical in determining the client’s next phase of investment and growth. We delivered:

  • Insightful market segmentation and the relative attractiveness of each segment
  • Current and emerging practice in pathology consultation and second opinions
  • Development and assessment of value-maximizing offers for each segment
  • Specific guidance on a number of execution risks that could impact the market potential for their new service offering
  • A detailed set of recommendations on how to adjust the business models in the China market

Following the project, the client was successfully acquired by a leading global medical equipment supplier. One of the key attractions for the buyer proved to be the huge potential of the client’s emerging remote pathology service model in China. The model has been featured prominently in the buyer’s investor communications post-acquisition.

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