A new grievous healthcare abuse has been introduced by private equity backed companies. Simply confirming one's primary care provider could get a patient enrolled in an "at risk" Medicare plan without their knowledge. The program is called Medicare Direct Contracting.
Private equity underwriters (PEU) behind Iora Health (Fortis, F Prime, Flare Capital) and One Medical (The Carlyle Group) joined the two companies in September 2021. Executives spoke to Wall Street analysts last summer about the deal.
One Medical announced its intention to acquire Iora Health. In combination, we will transform healthcare and deliver a human-centered and technology powered care across every stage of life. Iora Health is a leading member-centric, value-based primary care organization with built-for-purpose technology, salary providers, service-oriented dedicated locations and virtual care services. Iora Health primarily serves seniors in full risk contracting relationships such as Medicare Advantage and Medicare Direct Contracting in 10 markets across the US.
What's exciting is, it allows us to serve about 40 million Medicare members who are not in Medicare Advantage plans, and nothing stops us from doing this anywhere in the country. We don't need permission, we just simply need to register to do it.
Like One Medical, our bet is that we're going to actually change how actual people get actual care by building, built-for-purpose practices that engage people digitally, that build team base models, that have a fundamentally different clinical model, and we're going to take full-risk content through their contracting program and that leads to great experience and outcomes for the patient and leads to really spending economics as well, as we take this waste in the healthcare system and rationalize it and then because it's full risk we get to keep that difference and invest it into better primary care.
There's tremendous opportunities as we noted to expand the TAM from about $170 million in the commercial segment to $870 billion in the combined commercial and Medicare, Medicare Advantage, and now with direct contracting really getting to original Medicare patients as well even before or without needing to get into Medicare Advantage relationships.
So this is just a tremendous built-in growth opportunity. We're very excited about direct contracting,
As you know, in direct contracting there's a great channel called voluntary alignment where we simply ask our patients to report that you are our patients [indiscernible] (01:03:14) we are your patient, and then they flip into the full-risk model, and that's what we continue to intend to do.
And we are rapidly putting our patients and signing them up for direct contracting that's what we will continue to do.
Direct contracting began in April 2021. Iora converted over half of their original Medicare patients to at risk contracts by the end of April.
Iora estimates that as of April 30, 2021, approximately 57% of its Original Medicare patients have been aligned to the Direct Contracting Program under Iora’s DCE.
In PEU healthcare people get aligned to an risk healthcare plan. Imaging clicking on a link that confirms you are a patient of OneMedical or Iora and you are automatically enrolled in a plan that will make life and death decisions on your behalf.
Iora has shown a 27% point improvement over four years on their medical expense ratio.
Both companies use technology to cut costs.
Iora Health had 19 engagements per member per year for a senior population and One Medical had 10 engagements per member per year, and across both of those models that's largely digital.
I don't want to be touched 19 times by my primary care provider and don't consider anything digital as touching.
The greed and leverage boys are re-defining healthcare on their terms. You are but a pawn in their profit plans.
