One Medical Will Expand Care With Acquisition of Iora Health

One Medical has announced its plans to acquire human-centric, value-based primary care group Iora Health in an all-stock transaction valued at approximately $2.1 billion.

The agreement will allow One Medical, a human-centered and technology-powered primary care organization, and Iora Health to work together to accelerate and expand their missions to improve healthcare for consumers, employers, payers, providers, and health networks.

“We are delighted to announce plans to combine with Iora Health, a technology-powered primary care leader delivering outstanding member-based, value-based care for adults 65+ enrolled in Medicare Advantage and other at-risk reimbursement models,” Amir Dan Rubin, chair and chief executive officer of One Medical, said in the press release.

“Together we will expand our addressable market to serve more members in more geographies with digital and in-person care across every stage of life, with further capabilities to deliver care within full-risk models. Together with Iora Health, we can deliver better health, better care, and lower costs for children, adults, and seniors.”

The acquisition will create a premier national member-based, technology-powered platform to deliver better health, better care, and lower costs across commercial and Medicare populations, according to the press release.

It will also extend One Medical’s platform to deliver both 24/7 national digital health and in-person care across 28 markets.

“Chris McKown and I founded Iora Health over 10 years ago to build an innovative primary care model that transforms lives and improves outcomes through relationship-based care, and we are excited to take this next exciting step with One Medical,” Rushika Fernandopulle, MD, MPP, co-founder and chief executive officer of Iora Health, said in the release.

“Together, with our aligned cultures, shared mission, and complementary models, we can drive even greater impact for our patients, our teams, and our investors, and most importantly, our shared vision of transforming healthcare.”

With similar models and methods, the joining of the two organizations will increase their ability to use purpose-built technologies to deliver positive member experiences, population health, provider support, and value-based care across every stage of life.

One Medical’s risk-taking capabilities will be extended into full-risk Medicare reimbursement models.

The acquisition will bring financial perks as well, with an estimated $350 million in annual revenue synergies and $30 million in annual net cost synergies by 2025, and $30 million in cumulative capex savings through 2025.

When the transaction closes in late Q3 or Q4 of 2021, Iora Health shareholders will receive 56.1 million shares of One Medical common stock. The transaction is valued at approximately $2.1 billion and Iora Health shareholders are expected to own around 26.75 percent of the shared company.

“One Medical has proven its ability to drive profitable membership growth, engage with members, improve health outcomes and lower costs,” said Bjorn Thaler, chief financial officer of One Medical.

“I am excited at the prospect of creating even more differentiation by adding Iora Health’s Medicare-focused capabilities, expanding our reach to 28 markets, and offering our service experience to the parents and grandparents of our 598 thousand members.

One Medical and Iora Health’s acquisition deal adds to the growing list of healthcare mergers and acquisitions.