The acquisition will allow One Medical to expand its clinics and services to the Medicare population
M&A activities in the healthtech sector have exploded in the last year and a half, despite or precisely because of COVID: According to Mercom Capital, there were 184 M&A transactions in 2020, an increase of 9 percent compared to 169 in 2019 and only in the In the first three months of 2021, 30 companies were acquired in the area.
The latest healthcare merger is between two companies that offer similar services, but for very different populations.
On Monday it was announced that Iora Health, a company that works with insurers and employers to create private practices tailored to specific communities, particularly Medicare patients over 65 years of age, has been acquired by primary care platform One Medical.
Pursuant to the acquisition, Iora Health shareholders will receive 56.1 million common shares of One Medical based on the closing price of One Medical common stock of $ 35.59 last Friday, equating to a transaction value of approximately $ 2.1 billion Dollar equals.
When the transaction is completed, which is expected to occur either late in the third or fourth quarter of this year after approval by One Medical and Iora Health shareholders, an undisclosed Iora Health agent will join the One Medical Board, while Rushika Fernandopulle, Iora, the current CEO of Health, will become Chief Innovation Officer at One Medical.
Founded in 2011 and based in Cambridge, Massachusetts, Iora Health is committed to “treating the whole person,” which means creating a deeper relationship with every patient. That means setting goals together with the patient, “enabling them to actively participate in their own well-being”.
Each practice she creates is set up to meet the needs of that specific community. For example, it created one in Phoenix, Arizona that cares for the elderly on Medicare so it has earlier hours, more bathrooms, wider waiting rooms, and more geriatricians.
Each practice has a team made up of a provider, health coach, behavioral practitioner, team nurse, clinical team manager, and surgical assistant, all of whom work with each person. Each practice also includes a telemedicine platform and a payment system in which patients are billed based on care rather than transaction.
“Iora teams see fewer patients than traditional general practitioners. Our providers have panels that are a third the size of traditional general practitioners’ practices. We can achieve this because of our relationship based care model are able to keep our patients healthier and save all medical costs. This often saves money for patients and the healthcare system, “Fernandopulle said in a 2018 interview with VatorNews.
One Medical also operates its own practices; For less than $ 200 a year, patients can have access to healthcare professionals, 24/7 virtual care, and same-day appointments. You can spend more time with your provider for longer appointments, you can send your provider an e-mail with follow-up questions, receive telephone support around the clock and stay in touch with the One Medical mobile phone and have an overview of your health app . Patients can also make appointments for the same or the next day by phone, app or online.
The company currently has offices in Atlanta, Austin, Boston, Chicago, Los Angeles, New York, Orange County, Phoenix, Portland, San Diego, Seattle, the Bay Area and Washington, DC, and soon in Dallas-Ft. Worth, Columbus, Houston, Miami and Raleigh.
In a blog post, Amir Dan Rubin, Chairman and CEO of One Medical, noted that in addition to running and running their own clinics, both companies share a common vision of what the future of healthcare should be like.
“One Medical and Iora both believe that to truly transform healthcare we must simultaneously meet the needs of several key healthcare stakeholders including consumers, employers and payers, providers and health networks, and technology-enabled models position us to simultaneously addressing the needs and frustrations of these key stakeholders, “he wrote.
The difference between the two companies lies in the audiences they serve, with One Medical primarily serving the commercially insured and Iora Health primarily serving seniors in vulnerable contractual relationships such as Medicare Advantage and Medicare Direct Contracting. A key aspect of this acquisition will therefore allow One Medical to continue serving its users when they retire from commercial insurance.
“For One Medical members entering Medicare eligibility and for non-elderly One Medical members with Medicare-eligible parents and grandparents, we would be looking at ways to extend their participation in our senior services. We might as well Iora family members are inviting patients to explore membership with One Medical, “said Rubin.
Although he focused on different populations, he also noticed the similarities in the way One Medical and Iora approached their patients.
“While each organization has focused on different patient populations, both have equally focused on developing a mission-centric culture with support teams to deliver transformative patient experiences and value-based care using dedicated technology and digital health services, and inviting personal care . “
Prior to that acquisition, Iora Health had raised over $ 343 million in venture funding, most recently a $ 126 million round last February. The company’s investors include Premji Invest, Cox Enterprises, Temasek, F-Prime Capital, Devonshire Investors, .406 Ventures, Flare Capital Partners, Polaris Partners, GE Ventures, KHosla Ventures, and Khosla Ventures.
This is the second acquisition by One Medical after purchasing the health coaching platform Rise in 2016.
Health acquisitions 2021
So far, 2021 has been a busy year for healthcare M&A, with some of the big companies making acquisitions.
These include insurance companies such as Evernorth, Cigna’s portfolio of healthcare services, who are buying the MDLIVE virtual care platform; UnitedHealthCare’s Optum to Acquire Change Healthcare, a healthcare technology company focused on accelerating healthcare transformation; and Centene acquires Magellan Health, a health management organization focused on the administration of behavioral medicine and diagnostic imaging.
Other startups that have made acquisitions include microbial science company Seed Health, which has bought Auggi, a company that uses artificial intelligence and machine learning to track and analyze digestive health; GetWellNetwork patient engagement platform, which acquired Docent Health, a corporate consumer engagement platform; and Ro, a telemedicine startup that runs digital health clinics for men’s and women’s health, along with smoking cessation that acquired reproductive health company Modern Fertility.
One Medical wasn’t even the only healthcare company to announce an acquisition on Monday:
Probo, a provider of medical imaging equipment, parts, repair, and service, has acquired Tenvision, a provider of sales, service, maintenance, repair, and training of medical equipment, while Well Health Technologies, owner and operator of a portfolio of primary health care facilities, announced for acquiring MyHealth, a specialist care, telemedicine and accredited diagnostic health services provider that owns and operates 48 locations across Ontario.
This follows Well’s acquisition earlier this year of CRH Medical Corporation, a provider of anesthesia to patients undergoing endoscopic procedures.
(Image source: onemedical.com)