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One Medical's clinics are an option for almost 400,000 people. Photo: Smith Collection/Gado/Getty Images

One Medical has filed paperwork to go public, and the growing chain of physician offices has made it clear to prospective investors that large, dominant hospital systems are becoming a lot more crucial to its business.

The bottom line: "Our growth depends on maintaining existing, and developing new, strategic affiliations with health network partners," One Medical executives wrote in their IPO filing.

How it works: One Medical, which preaches convenient and lower-cost primary care, earns money in three main ways.

  • Employers, most notably Google, pay a membership fee so their workers can have unlimited access to One Medical's clinics. Or, a membership on your own costs $199 annually.
  • Hospitals, large medical groups and employers pay fixed monthly rates for a certain population of people, and One Medical is responsible for that group's care.
  • Health insurers create traditional "fee-for-service" agreements where they pay One Medical for each service it provides.

Between the lines: Hospitals are essentially finding a new way to buy patient referrals. They pay fixed sums to One Medical, and patients who need more intensive and expensive care will go to those hospitals instead of competitors down the street.

  • But One Medical benefits, too. In some instances, instead of fixed rates, hospitals "extend their health insurance contracts to us," according to One Medical's filing.
  • One Medical partners with hospital systems that hold a lot of market or brand power — places like Emory Healthcare in Atlanta, Mount Sinai in New York and UCSF Health in San Francisco — which allows One Medical to piggyback on those hospitals' lucrative contracts with insurers.

What they're saying: "Our providers are salaried, and not on a fee-for-service mindset," One Medical CEO Amir Dan Rubin told me in 2018.

  • Having salaried doctors, however, does not mean One Medical is casting aside the current system. It's merely building within it.

Go deeper

SoCalGas agrees to $1.8 billion settlement for 2015 gas blowout

An evacuee with a Save Porter Ranch sign outside Southern California Gas Company's Aliso Canyon gate in Porter Ranch in January 2016 as the gas leak continued. Photos: Al Seib / Los Angeles Times via Getty Images

Southern California Gas Company and its parent company announced Monday they've agreed to pay up to $1.8 billion in settlement claims over the 2015 Aliso Canyon natural gas storage facility blowout.

Why it matters: Some 100,000 tons of methane, ethane and toxic chemicals poured into the air for 112 days, forcing over 8,000 families to evacuate from their Los Angeles-area homes and sickening many with headaches, nausea and nosebleeds, per the L.A. Times.

Updated 5 hours ago - World

North Korea fires short-range missile to sea, slams "hostile" U.S. policy

North Korean leader Kim Jong-un. Photo: API/Gamma-Rapho via Getty Images

South Korea's Joint Chiefs of Staff said Tuesday that North Korea's military had fired a short-range missile toward its eastern sea, per AP.

Why it matters: North Korea's ambassador to the United Nations defended the latest launch in remarks to the UN General Assembly, demanding the U.S. and South Korea end their "hostile policy" against the country.

Arizona Judge: Adding mask mandates ban to budget bill unconstitutional

Arizona Gov. Doug Ducey (R) Photo: Michael Brochstein/SOPA Images/LightRocket via Getty Images

An Arizona judge ruled Monday that the state's ban on mask mandates in schools, and other measures put into the state budget by Republicans, are unconstitutional, the Arizona Republic reports.

Why it matters: The sweeping ruling voids a ban on vaccine requirements for public universities, community colleges and local governments, and strikes down some non-COVID-related measures like a ban on teaching critical race theory in classrooms and anti-fraud measures for ballots.