Portrait of female doctor smiling over white background. Confident healthcare worker is wearing lab … [+] coat in studio. Professional is with stethoscope.
It was not a great week to come public, as seen with the bearish move in the overall markets. Yet the IPO from One Medical turned out quite well. On Friday, the company’s shares soared by 58% to $22–putting the market cap at over $2.4 billion.
Tom Lee, a board-certified internist, started the company in 2007 by creating a clinic in San Francisco. He wanted to find ways to deal with the many issues for the key stakeholders in the healthcare industry:
Consumers: Problems with long wait times, in-office delays, and inconvenient locations.
Employers: Struggles with providing compelling benefits at affordable rates that allow for healthier employees.
Providers: Difficulties with burnout because of the tedious administrative matters.
Health Networks: Challenges with coordination for care services.
Then what has One Medical done to solve these problems? Well, the company has upended many of the traditional approaches. In fact, some of the ideas are not particularly obvious either
So let’s take a look:
Business Model: One Medical has a simple fee model, which involves an annual membership. This gives 24/7 access to digital health care services with in-office visits. One Medical’s service providers are also paid on salary basis—not on a fee-for-service model.
And yes, the sophisticated technology infrastructure has meant that there is much less need for administrative tasks with EHRs (44% fewer tasks compared to the industry average).
Distribution: In the early days, One Medical sold directly to consumers. But this proved extremely expensive and did not scale. This is why the company would eventually transition to partnering with companies—that is, the visits would be billed under a health insurance benefit program.
Note that there are currently about 6,000 enterprise clients and the retention rate is 97%. Then again, One Medical has been shown to reduce emergency visits by 41% and to lower employer costs by 8% or more.
Health Networks: They are not competitors; rather, they are critical partners for One Medical. To this end, there has been much investment in integrating platforms to deliver a more seamless experience, such as access to specialists and facilities.
Analytics: One Medical has a team of data scientists that crunch the huge amounts of data to gain insights. Because of this, members get more personalized digital experiences. Employers also get a better sense of the outcomes.
Process Improvement: One Medical essentially started with a blank slate and looked to find ways to optimize the workflows for healthcare management. The company leveraged Lean methodologies for human processes and Agile practices for software development.
According to the S-1: “Our operational processes, software development and staffing models, including our virtual medical team, are designed to work together to create efficiencies and uniquely achieve our objectives. Moreover, we standardize our processes and practices so we can efficiently deliver consistent outcomes at scale across existing and new markets, which we believe will further drive our financial performance.”
Customer Focus: With the website and mobile apps, One Medical has been proactive with its members. The technology has made it easier to manage prescriptions, lab results, and other communications. There is also a major focus on taking preventive measures.
For example, for the year ended September 30th, 2019, One Medical’s technology platform created 1.3 million health action items for members and about 69% of them were completed.
But One Medical is much more than just technology. The company also designed its locations to be aesthetically pleasant–almost like health spas!
As a result, the member satisfaction levels are off the charts. Consider that the Net Promoter Score (NPS) is 90. To put this into perspective, the score for Apple is 73.
Tom (@ttaulli) is the author of the book, Artificial Intelligence Basics: A Non-Technical Introduction, as well as the upcoming book, The Robotic Process Automation Handbook: A Guide to Implementing RPA Systems.