One Medical Goes Public in Bid to Transform Primary Care

January 31, 2020
One Medical got off to a strong start on Friday after launching its IPO at $14 per share. The membership-based primary care provider came to the table with an ambitious business proposition: that primary care, the ugly duckling of the healthcare industry, can use technology and high-end customer service to draw in patients willing to pay a little extra.
"If you want to keep people healthier, happier, and frankly give them the option to be their healthiest self, as healthy as they can be, you've got to start with primary care, and in order to do that you've got to make it accessible," CFO Bjorn Thaler told Cheddar.
Primary care in the U.S.has gained a reputation in recent years for long wait times, difficult scheduling, and overworked doctors who don't have enough time for patients.
One Medical's pitch is that for $200 per year members get access to a calm and comfortable patient experience through modernized doctors' offices and proprietary software and apps that streamline scheduling and provide easier access to health records.
The company, founded in 2007, built its reputation in the San Francisco-Bay Area before expanding to 77 locations in eight cities with a total of 397,000 members and 6,000 employer partners.
Several rounds of investment from the likes Google Ventures and The Carlyle Group lifted One Medical's value to nearly $2 billion over the last two years, but an ambitious and expensive growth plan pushed the company to go public.
"We're taking this model to 12 different geographics, including places like Atlanta, Portland and Orange County, over the next 18 months," Thaler said. "In order to do that and continue to fuel our growth, we decided to raise capital, and we decided to raise capital in the public markets."
The stock surged to over $20 per share at midday — a robust opening that came despite the fact that One Medical posted net losses of $32 million in 2017 and $46 million in 2018.
Talk of tech and convenience, however, can make it easy to forget that One Medical is still operating in the costly and highly regulated health care space.
"We are in this to disrupt healthcare," Thaler said. "It's not something that we are going to do in a month or a year. This is going to take time. We are in this for the long-run."
What if health care gets disrupted first? Thaler is confident that One Medical can weather any major reforms, including Democratic candidate Sen. Bernie Sanders' plan to implement a single-payer health insurance program.
Regardless of how health care is financed, he said, people still want a comfortable and convenient primary care experience.
"I think we are on the right side of healthcare reform, regardless of which way it goes," he said.
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