One Medical and Iora serve radically different populations. Here s why the $2.1B tie-up might make sense.
With its multibillion-dollar acquisition of value-based Iora, One Medical is betting on longitudinal care and the profitability of risk. Published June 9, 2021 One Medical
Digital health market watchers were surprised when concierge medical network One Medical announced plans to acquire value-based chain Iora Health for $2.1 billion on Monday, with some airing concerns the deal represents a marriage of two diametrically opposed operational models.
One Medical is a fee-for-service machine, with the majority of its business coming from charging commercially insured members per-visit fees. The San Francisco-based primary care group s clientele is mostly comprised of the so-called wealthy well, which it captures through direct-to-consumer arrangements along with contracts with employers like Google.
Dive Brief:
>Sentara Healthcare and Cone Health are scrapping plans to merge after signing a letter of intent in August 2020. The deal was expected to close in the middle of this year pending regulatory approval, and would have created a 17-hospital, $11.5 billion system.
Norfolk, Virginia-based Sentara is a nonprofit system with 12 hospitals in Virginia and North Carolina and its health plans serve over 800,000 members in Virginia, North Carolina and Ohio. Greensboro, North Carolina-based Cone Health is also a nonprofit with five hospitals in the state, and its two health plans serve 15,000 members.
North Carolina Attorney General Josh Stein held a comment period in late April to gauge feedback on the merger, and received more than 40 responses, many touching on potential reduced competition in the market.