"China has established a support system for hi-tech enterprises, from policy to funding, to help develop its own intellectual property rights system, and Digimedex benefited a lot from this," said Xu. He has obtained five state patents for his TPA service and he hopes to build Digimedex into the model for the industry. "Digimedex's standard will be the standard for China's TPA industry in the future," Xu said.

During the past three years, Digimedex has seen 300-percent annual growth. As of 2008, the company had already signed up 28 leading insurance companies as its customers, including China PICC Life Insurance Co. and China Pacific Insurance Co.

Twenty PPO hospitals have already been set up all around Beijing, and Xu hopes that with more than 4,000 locations and a powerful IT platform, Digimedex can administer its TPA service anywhere in China.

In December 2008, Xu obtained $5 million in investment from VIVO, an American venture capital firm. He intends to use the money to help speed up his plan. He will expand his business to Shanghai, Guangzhou, capital city of Guangdong Province and Chengdu, capital of Sichuan Province, and set up more branches.

"In 2009, my company will have 500-percent growth and realize a profit of 30 million yuan ($4.4 million)," Xu said.

In the past five years, China's insurance industry has seen fast and steady growth. Amid the economic recession, the Chinese Government has released a series of macroeconomic control polices, including vigorously expanding the insurance penetration rate, which should produce a new upsurge in the insurance industry.

According to the China Insurance Regulatory Commission, the health insurance industry made a profit of 58.6 billion yuan ($8.6 billion) in 2008, a year-on-year increase of 52.4 percent.

"The fast development of the insurance industry will provide a vast market for TPA," said Xu.