One Medical has quietly rebranded the senior care clinics it acquired from its 2021 buy of Iora Health to “One Medical Seniors” in an effort to better synchronize the two businesses.
The rebrand, and ongoing efforts to expand the ability of One Medical clinics to treat a wider variety of patient populations, are likely to help the primary care provider nab more clients, analysts said.
“People need to know who they’re doing business with or receiving care from. And that’s especially true when you look at the senior population,” said Arielle Trzcinski, a principal analyst at Forrester who focuses on the digital and retail health markets. “So being able to apply the One Medical brand to Iora — it’s a trusted brand. So there’s an opportunity for net new customers.”
Iora evolution
One Medical bought Iora for $2.1 billion in 2021, before Amazon bought One Medical for $3.9 billion in a deal that closed earlier this year.
One Medical’s Iora acquisition confused some market watchers. At the time, the majority of One Medical’s business came from charging commercially insured members per-visit fees, while Iora made money by managing seniors’ care in full-risk arrangements in Medicare.
In the short term, One Medical wanted to enter risk-based arrangements, which can be extremely lucrative, while keeping the Iora brand separate, management said at the time. But in the long term, One Medical was banking on capturing members’ care as they age, from pediatrics to privately insured adults to Medicare seniors.
Now, the eventual goal is that every One Medical location, regardless of whether it’s an original Iora or One Medical site, will be able to serve any type of patient, One Medical VP Natasha Bhuyan told Healthcare Dive at HLTH last week.
Expanding the ability of One Medical offices to treat seniors and Iora offices to treat children and adults is a valuable market expansion opportunity for Amazon, according to Forrester’s Trzcinski.
Currently, One Medical has 46 legacy Iora offices serving Medicare seniors in nine U.S. markets, according to its website.
One Medical finished rebranding those Iora centers as One Medical Seniors in May, a One Medical spokesperson said.
Removing the wall between One Medical and Iora clinics would allow existing locations to serve as an entry point for more types of patients in One Medical’s current markets, without the cost of standing up additional facilities, Trzcinski said.
One Medical and Iora clinics overlap in Atlanta, Houston, Phoenix and Seattle.
One Medical operates only the senior centers in five markets: Cape Cod, Massachusetts; Charlotte, North Carolina; Tucson, Arizona; Denver and the Triad metro area in North Carolina that includes Greensboro, Winston-Salem and High Point.
“If they can take the locations that they have through One Medical’s acquisition of Iora and turn those into additional opportunities to meet those customers where they are, of course they should be optimizing the assets that they have acquired,” Trzcinski said.
Speedbumps
Legacy One Medical and Iora clinics don’t currently have any overlap in patient populations, due to difficulties integrating their disparate electronic medical records systems, One Medical’s Bhuyan said.
Integrating disparate EHRs is a common and costly problem in provider M&A. The average purchase and implementation cost of an EHR is around $32,600 per physician, while maintenance costs can be additional thousands of dollars per doctor a month, according to one study. Meanwhile, migrating to a different EHR can take months to several years.
Another roadblock One Medical could be facing in expanding the ability of legacy Iora and One Medical clinics to serve each other’s respective patient populations is staffing, Trzcinski said — for example, adding pediatricians to Iora sites or geriatricians to One Medical sites.
It’s also difficult to work through the credentialing process to allow One Medical and One Medical Senior offices to accept an expanded set of insurances, which could be delaying acceptance of more members at past Medicare-only sites, according to the analyst.
Despite the speedbumps to integration, the Iora acquisition has already proved a notable asset for One Medical’s topline. In November, the primary care provider reported capitated contracts were to thank for half of its net revenue, despite at-risk members comprising just 5% of total membership. Amazon no longer publicly discloses One Medical’s financial breakdown.
