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A subscription model may be the answer to America’s primary healthcare problems.

In April, San Francisco-based primary care company One Medical revealed an eye-popping compensation package for its chief executive and chairman, Amir Dan Rubin. His $199 million payday, particularly noteworthy at a company that has yet to turn a profit, made Rubin the second-highest-paid CEO in the United States last year — but only on paper.

About $197.5 million of his pay is in stock options. For Rubin to get all that cash, the stock of One Medical, traded as 1Life Healthcare, must rise sharply over the next seven years, to nearly triple its current price.

In short, his compensation is less a quick jackpot than a general statement of One Medical’s ambitious vision of primary care that is more accessible, technologically enabled and patient-friendly, while cutting health costs for employers and individuals.

Loads of other firms, ranging from small start-ups to larger, more established companies, are selling similar concepts of new and improved primary care.

Some offer it directly to individuals; others target Medicare enrollees. Perhaps the most promising customers are employers, who insure an estimated 157 million U.S. workers and their dependents, and have long been frustrated with spotty primary care and perpetually rising health costs.

The “direct” primary care companies, as they are often called, face stiff competition from one another as well as the large regional health systems and their affiliated physician groups, which still dominate the field.

Analysts say these emerging primary care companies have significant room for growth because of mounting frustration with the medical status quo and because they currently have only a tiny share of the $260 billion U.S. primary care market.

“I think that, ultimately, they’re going to grow in acceptance and accumulate patients and attract clinicians that want to provide a different level of care,” said Richard Close, managing director of health equity research at Canaccord Genuity in Nashville, Tennessee. But he added that “all of these companies combined could grow very significantly and just put a dent in the overall system.”


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Also vying for a share of the primary care market are urgent care centers and walk-in clinics at retailers such as Target and pharmacies such as  CVS, in addition to telehealth companies like Teladoc and Doctors on Demand.

In a sharp reminder of the competitive challenges ahead, the share prices of One Medical and Teladoc sank in mid-March after Amazon announced plans to begin offering its telehealth and home visit service as an employee benefit nationwide.

“Amazon is a threat, because Amazon knows how to appeal to consumers,” said Gary Kurtzman, a Wharton Business School lecturer and managing director of Prostasia Health, a health tech investment advisory firm.

The appeal of these companies has grown as employers increasingly seek to address a shortage of high-quality primary care and reduce spending on the health of their workforce, said Ellen Kelsay, CEO and president of the Business Group on Health, which represents large employers.

Studies show a strong correlation between access to primary care and lower spending on expensive medical services such as ER visits, surgeries and hospital admissions. Yet in the United States, primary care accounts for only around 5% to 7% of total health spending, compared with 14% in the 36 member nations of the Organization for Economic Cooperation and Development.

The big bet of One Medical and companies like it is that greater spending on primary care will fatten their bottom lines while reducing overall health costs for their clients.

study published last year in JAMA Network Open showed that employees of Hawthorne, California-based SpaceX who got most of their primary care at One Medical’s on-site health clinic generated 109% more in spending on primary care but 45% less on health care overall than those who used One Medical infrequently or not at all.

These direct primary care companies typically offer a digital platform as the first point of contact, which enables members to make appointments and text, email or video chat 24/7 with their medical providers.

They wed that technology to brick-and-mortar clinics staffed by doctors, nurse practitioners and medical staff, where members can go for checkups, prescription drugs, lab tests, scans, vaccinations, physical therapy and mental health visits. The patients generally get more time with their providers than in a traditional medical office.

One Medical’s focus is improving health care for “multiple stakeholders simultaneously,” Rubin said in a recent interview with KHN. “How do we delight consumers, serve employers and payers? How do we make medicine the best environment for providers to work in?”

Part of the company’s answer is to put doctors on salary rather than paying a fee for every visit. That eliminates the pressure to book a lot of visits, which Rubin said helps physicians spend more time with each patient.

One Medical will offer its combination of telehealth and in-person visits in 22 metropolitan areas around the United States within a year or so, up from nine in 2020, Rubin said. It had nearly 600,000 members at the end of March, up 31% from a year earlier. When One Medical started in 2007, it sold only individual memberships, for which it currently charges $199 a year. But it has since moved increasingly into the employer market. Anecdotally, its patients are happy with the care they get.


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