In April, One Medical, a San Francisco-based primary care company revealed a mind-blowing compensation package for its CEO and Chairman, Amir Dan Rubin. His $ 199 million salary, particularly notable 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 salary is in stock options. For Rubin to get all that money, One Medical’s stock, listed as 1Life Healthcare, must rise sharply over the next seven years, almost tripling its current price.
In short, his pay is less of a quick jackpot than a general statement of One Medical’s ambitious vision of more accessible, technologically compatible and patient-friendly primary care for patients, while reducing healthcare costs for employers and individuals.
Many other companies, ranging from small start-ups to larger, more established businesses, are selling similar new and improved primary care concepts.
Some offer it directly to individuals; others target Medicare registrants. Perhaps the most promising clients are employers, who provide estimated at 157 million American workers and their dependents, and have long been frustrated by inconsistent primary care and ever-increasing healthcare costs.
âDirectâ primary care companies, as they are often referred to, face stiff competition from each other as well as from 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 due to growing frustration with the medical status quo and because they currently hold only a tiny share of the 260 billion dollars US primary care market.
“I think that ultimately they are going to become more and more accepted, rack up patients and attract clinicians who want to provide a different level of care,” said Richard Close, general manager of equity research. in health at Canaccord Genuity in Nashville, Tennessee. But he added that “all these companies combined could grow very significantly and only hamper the overall system.”
Emergency care centers and walk-in clinics at retail are also competing for a share of the primary care market. such as target and pharmacies such as CVS, in addition to telehealth companies like Teladoc and Doctors on Demand.
As a reminder of the competitive challenges ahead, the share price of One Medical and Teladoc sank in mid-March after Amazon plans announced to begin offering its telehealth and home visiting service as a benefit to employees nationwide.
âAmazon is a threat because Amazon knows how to appeal to consumers,â said Gary Kurtzman, lecturer at the Wharton Business School and CEO of Prostasia Health, a healthcare technology investment consultancy.
The attractiveness 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 expenses on expensive medical services such as emergency room visits, surgeries and hospitalizations. Yet in the United States, primary care accounts for only about 5 to 7% of total health expenditure, compared to 14% in the 36 member countries of the Organization for Economic Co-operation and Development.
The big bet for One Medical and similar companies is that an increase in spending on primary care will increase their bottom line while lowering overall healthcare costs for their clients.
A study published last year in the JAMA Network Open showed that employees at Hawthorne, Calif., SpaceX who received most of their primary care at One Medical’s on-site health clinic were generating 109% more in spending from primary care but 45% less in general health care than those who used One Medical little or not at all.
These direct primary care companies typically offer a digital platform as their first point of contact, which allows members to make appointments and chat via text, email or video 24/7 with their medical providers. .
They have paired this technology with physical clinics staffed with doctors, nurse practitioners, and medical staff, where members can go for exams, prescription drugs, lab tests, scans, vaccinations, therapy. physical and mental health visits. Patients generally spend more time with their providers than in a traditional doctor’s office.
One Medical’s goal is to improve healthcare for “multiple stakeholders simultaneously,” Rubin said in a recent interview with KHN. âHow to delight consumers, serve employers and payers? How to make medicine the best environment for providers? “
Part of the company’s response is to pay physicians instead of paying fees for each visit. This takes the pressure off of booking many visits, which Rubin says helps doctors spend more time with each patient.
One Medical will offer its combination of telehealth and in-person visits to 22 metropolitan areas across the United States within about a year, up from nine in 2020, Rubin said. It had nearly 600,000 members at the end of March, up 31% from the previous year. When One Medical started in 2007, it only sold individual memberships, for which it currently charges $ 199 per year. But since then, it has more and more established itself in the employer market. For the record, his patients are satisfied with the care they receive.
âOne Medical says your appointment is at 10 am, and my nurse practitioner comes out at 10 am to pick me up,â said Kathleen Wiegand, 63, a member of One Medical in Washington, DC. never had to wait for a date. “
Premise Health, based in Brentwood, Tennessee, is the largest player in the employer segment in the direct care market, with over $ 1 billion in annual revenue, 11 million employer sponsored members through 1 600 large companies and municipal employers and around 850 health centers. Most of these centers are located on the sites of its corporate and local government customers.
âOur bet for the future is that it is the combination of digital and physical access that will generate lasting value and a better experience for the member, instead of pure digital or pure physical,â said Jami Doucette, president of Premise.
Doucette said his company provides an entry point to medicine that is “an alternative to hospital-owned primary care physicians who are dragged down by the volume of expensive procedures.”
Eden Health, a New York-based start-up, provides a similar service to small and medium-sized businesses, and also contracts directly with commercial real estate companies who wish to provide on-site medical facilities to businesses that are their tenants.
As the pandemic eases and many workers return to the office with safety in mind, providing on-site medical care can help business owners raise rents, said Matt McCambridge, co-founder and CEO of Eden Health, 29 years. âWhat the owners are trying to do is create a set of amenities that allows them to be a premium Class A location, and health is really a key part of that,â he said. .
Start-up based in San Francisco Advanced health, on the other hand, is sold exclusively to individuals. It charges a flat monthly fee of $ 149 for digital health access, in-person visits, and Technology the company says it can look for signs of skin cancer, perform genetic testing and return full blood test results within 12 minutes.
While positioning themselves as âdisruptorsâ in an industry that prioritizes volume of health services, many direct care companies nonetheless participate in their members’ health plan networks, and some receive fee-for-service payments. these diets.
One Medical, for example, is moving 37% of its turnover of these payments.
âIt’s just the way the American health care system is organized. If you want to serve people easily, you say, ‘Hey, I take your assurance. And if you want to easily serve employers, you say, âI’m part of your network,â Rubin said.
âBut what is powerful is that without changing the way the system pays, we can still reduce the cost of care,â he added. “We don’t have to wait for a mythical unicorn from a reimbursement system to get these kinds of results.”
This article was reprinted from khn.org courtesy of the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorial independent news service, is a program of the Kaiser Family Foundation, a non-partisan health policy research organization not affiliated with Kaiser Permanente.