One Medical, the tech enabled health startup that made headlines when it went public in January, is reporting a 25% year-over-year revenue growth. However, it still came up short of meeting earnings per share expectations.
The company, officially named 1Life Healthcare, uses a hybrid model, its members have access to 24-7 virtual health-services as well as the ability to visit brick-and-mortar clinics for care.
While, the coronavirus has posed several challenges for the company, its CEO Amir Dan Rubin said that it is looking toward digital means for the future.
“In late Q1, our digital platform expanded to offer remote visits. With remote visits, members can now schedule billable video appointments with their primary care providers, supporting continuity of care and social distancing. While still early, we have seen great initial uptake and plan on continuing these services into the future,” he said.
The California-based company reported $78.8 million in net revenue, representing a 25% increase year-over-year. This also meant that it beat its goal by $3.75 million. It also reported a member increase of 25%. However, the earnings per share missed its goal by $0.23.
Membership revenue accounted for $15.2 million of revenue, patient services accounted for $34.1 million and partnerships accounted for $29.5 million.
The Q1 adjusted EBITDA was a loss of $14.5 million, which the company attributes to the coronavirus crisis.
The company is forecasting Q2 revenue at between $56 million and $66 million, attributing the large range to the uncertainty of the times. Noting that the company didn’t have plans to lay off employees, it said it expected an adjusted EBITDA to be between a loss of $36 million and a loss of $26 million.
The company is also expecting a wave of patients seeking care that might have been put off during shelter-in-place orders.
“We continue to expect an influx from deferred care at the appropriate time, although we cannot predict when and how sharply our in-office volumes will return,” Bjorn Thaler, Chief Financial Officer, said in the call. “This will include care for chronic disease management, cancer screening, reproductive health, behavioral health and wellness visits, to name a few. In the long term, COVID-19 may also drive an influx of demand for future vaccinations or other treatments.
The company said that, looking ahead, it is also planning on not hiring any more nonclinical staff for the time being, and has cut most discretionary spending. The company is also holding off on opening some of the new offices that were slated to open in 2020, and defer the opening until the second half of 2021.
As the coronavirus continues to limit patients access to in person care, the provider will be looking for digital revenue streams. However, virtual care has its own obstacles.
“With the recent regulatory changes, remote visits are currently reimbursed at equivalent rates to similar in-office visits,” Thaler said. “That said, remote visits do not involve procedures or the administration of services like vaccines or reproductive care. For this reason, the average remote visits typically result in a lower average fee-for-service reimbursement. Finally, average reimbursement for COVID-19 testing is typically lower than average reimbursement for both remote visits and in-office visits."
Over the last few months One Medical has launched a number of initiatives to address the growing pandemic. One of its major expansion areas was COVID-19 testing.
“In a matter of weeks, we stood up 18 mobile testing sites, along with in-office testing locations across our markets. In Q1, our testing services focused on symptomatic and high-risk individuals, in parallel with CDC guidelines,” Rubin said. In Q2, as the CDC brought in testing guidelines, we expanded testing the frontline responders and essential workers.”
The company also made headway with a new program aimed at getting people back in the workforce.
“During this extraordinary time, we launched our One Medical Healthy Together Worksite Reentry program to support employers as they began to transition workforces back into shared environments,” Rubin said. “Through our program, we can virtually screen employees for key symptoms and clinical risk-factors, offer testing services, and support ongoing digital screening, further testing, and follow-up care as needed.”
During this time the company has also partnered with hospitals and municipalities.