One Medical's Q1 revenue doubles as primary care company expands into chronic care, behavioral health

Tech-enabled primary care provider One Medical saw its total membership count jump nearly 30% to 767,000 by the end of March, a nearly 30% increase year over year.

The company's top line doubled from a year ago, as One Medical brought in $254 million in revenue in the first quarter, up 109% from $121 million in the first quarter of 2021. The company's first-quarter revenue exceeded the high end of its guidance range by more than $4 million.

Amir Dan Rubin, chair, CEO and president of One Medical, said during the company's first-quarter 2022 earnings call that the revenue boost was driven by membership growth, including 22% growth in consumer and enterprise members and 80% in at-risk membership.

The company saw strong growth in its at-risk business with Medicare revenues contributing $127 million to total net revenue in the first quarter. 

"In addition to delighting our members, we continue delivering outstanding value to existing and new employer accounts, including from national multi-market clients," Rubin said. "As our geographic footprint growth, we continue to see an increase in interest from larger multi-market employers, a positive validation of our national strategy."

He added, "We are also seeing employers further recognize how our primary care hybrid in-person and virtual-based model can deliver differentiated clinical outcomes and value-based care results, addressing backlogs of deferred care to prevent avoidable morbidity and cost down the road."

One Medical is a membership-based and technology-powered primary care model that offers both in-person and virtual care. The company currently operates 188 offices in 29 markets.

The company’s concierge model now supports all ages, too. In June, One Medical acquired Iora Health, another primary care competitor focused on Medicare patients, in a $2.1 billion deal. The company is pushing more members into at-risk arrangements.

Executives said the acquisition will allow it to broaden its market reach to care for people across a widened age range, opening the provider to reach 40% of Americans.

The company is expanding its focus beyond primary care to support chronic condition management and behavioral health. 

Working with large employers, the company rolled out One Medical Healthy Heart, which focuses on metabolic and cardiovascular risk and includes a risk assessment by chronic care providers followed by a series of virtual and in-person interactions with a health coach and exercise guide, executives said. In rolling out Healthy Heart with an employer, 80% of the participants saw a reduction in low-density lipoprotein, or LDL, also known as the bad cholesterol, with 60% of participants experienced a greater than 20% LDL reduction," Rubin said.

The company also developed a behavioral health solution, called One Medical Healthy Mind, to support employees' mental well-being and resilience. Healthy Mind combines primary care visits with cognitive testing, wellness coaching and, when needed, support by a therapist. One Medical is scaling those two programs to additional employers.

Through its One Medical At-Home service, the company combines in-home care teams, in-office providers and virtual team members to provide care to complex patients. "We leverage our analytics and machine learning models to identify vulnerable members who could be well served by this intensive model, and who on average, have nine chronic conditions. One Medical At-Home has allowed us to provide better care while further reducing avoidable costs and complications," Rubin said.

Rubin said One Medical is focused on making its model "the default option for healthcare in the United States."

The company continues to struggle with a high medical loss ratio, at 84%, but the MLR dropped 10 percentage points from the fourth quarter of 2021, according to the company's chief financial officer Bjorn Thaler.

"This is despite the impact from the omicron variant, particularly in January add more over the continued impact of COVID infections, deferred care and missed care throughout the pandemic," he told analysts during the call.

"We believe that the work we are doing to help our members prevent or better manage their illnesses and will use avoidable hospitalizations or other procedures by appropriately documenting their health status, will enable us to continue to drive down this ratio over time," Thaler said.

Yet the primary care provider deepened its losses in the first quarter, with a loss of $91 million, or a loss per share of 47 cents, compared to a loss of $39 million, or 29 cents a share a year ago. One Medical's earnings missed Wall Street estimates, with analysts expecting a loss per share of 46 cents.

Adjusted EBITDA came in at a loss of $29 million in the quarter, compared to a gain of $4 million a year ago.

The company's quarterly revenue beat Wall Street expectations by $8 million.

One Medical's stock price rose 5% in trading Thursday after the earnings call.

The company ended the quarter with $428 million in cash and marketable securities, a decrease of $73 million from the end of 2021. One Medical invested $19 million in capital expenditures over the course of the first quarter as it continues to invest in its geographic expansion and technology, Thaler said.

Executives expect membership to reach between 831,000 and 853,000 members by the end of 2022.

The company guided for second-quarter revenue between $255 million and $270 million, and boosted its full-year revenue guidance by $10 million, now expecting 2022 revenue between $1.055 billion and $1.095 billion.