Carlyle-Backed One Medical Tackles Costs With Hospital Deals
(Bloomberg) -- A private equity-backed medical group that’s been forging ties with hospital systems around the U.S. to better coordinate patient care and control costs has signed a new deal in one of the nation’s most crowded health-care markets.
One Medical, which raised $350 million last year from investment giant Carlyle Group LP, is joining Mount Sinai’s network of independent physicians in New York. The deal will make it easier for patients to move among One Medical’s nine primary-care clinics and Mount Sinai’s specialists and hospitals, executives from both entities said.
One Medical has quietly struck a series of similar arrangements in recent years with other large health systems, including UCSF Health in San Francisco, UC San Diego Health, Dignity Health and Providence St. Joseph Health.
Care providers have been under pressure to rein in costs, especially from large employers who have started trying out unconventional ways to control health spending. Haven, a joint venture of Amazon.com Inc., Berkshire Hathaway Inc. and JPMorgan Chase & Co., has been given a mandate to shrink the companies’ medical bills while improving care for workers.
Primary-care doctors act as gatekeepers for more expensive services including specialist visits, imaging and hospital admissions. The deal will allow doctors to share information and tap into each others’ electronic medical records. One Medical will bill insurers through Mount Sinai’s contracts, which typically include incentives to reduce the total cost of patients’ care.
“Consumers are frustrated with the complexity of accessing care,” said Amir Rubin, chief executive officer of San Francisco-based One Medical. He said his company wants to make it easier for patients to see the doctors they need to see.
Mount Sinai has contracts with insurers that make it responsible for the overall health of about 400,000 patients that get primary care in its network, said Niyum Gandhi, Mount Sinai’s chief population health officer. He expects that bringing One Medical’s primary-care clinicians into the network will increase that total by about 15 percent, or roughly 60,000.
One Medical patients will still be able to see specialists outside of the Mount Sinai system.
For its more high-touch primary care, One Medical charges an annual membership fee of $199 for an individual, or a rate negotiated with an employer. Patients can make same- or next-day appointments and spend more time with doctors than the typical 15-minute visit. A mobile app allows patients to talk to doctors.
Since Carlyle’s investment last year, the company has grown rapidly. In addition to New York, One Medical has clinics in Boston; Washington; Chicago; Los Angeles; Phoenix; San Francisco; and Seattle. It plans to open in three more cities, including in San Diego, in the next year. It also plans to double its footprint in New York by 2020.
More than 3,500 employers offer One Medical membership to their workers. Rubin declined to share the company’s financial information, but he said both revenue and membership have grown by about 50 percent in the past year-and-a-half. Rubin said One Medical planned to remain independent and declined to say whether it is considering an initial public offering.
Recently the company has hired several new executives, including Chief Financial Officer Bjorn Thaler, previously an executive in CVS Health Corp.’s Aetna unit, and Chief Network Officer John Singerling, an executive at Prisma Health in South Carolina, who will work on expanding One Medical’s relationships with health systems.
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