When Tom Lee was a medical student, he was taught that sleep is the most important thing to help patients recover, and yet he and his fellow residents were also asked to wake their patients in the middle of the night to check up on them, among other such paradoxes he observed. He later told himself that if we was admitted into Stanford’s MBA program, he would work on a solution for better patient-centric care.
Today, Lee runs One Medical, an eight-year-old company he founded whose health care clinics promise shorter wait times in the office, same-day appointments in most cases, lab tests at the doctor’s office, and digital tools, including electronic health records and a mobile app, that facilitate it all. On Tuesday, the company revealed it has raised $65 million in new funding.
In part, One Medical will use the money to expand its network of local clinics, both in the cities where it already operates (San Francisco, New York, Chicago, D.C., Boston, Phoenix, and Los Angeles), and into new ones. For $149 to $199 per year, patients can access small local clinics that aim to provide them a much more convenient and luxurious experience, and that work with most major insurance carriers. They can also use One Medical’s mobile app for help and even remote care 24 hours a day, seven days a week. Some employers, like Adobe (ADBE), Percolate, Lyft, and the Arizona Diamondbacks, provide One Medical memberships to their employees as part of their benefits packages.
And counter to how we usually think of fancy services, One Medical’s approach is actually about making health care more affordable, not pricey.
“Our panel sizes are what we call ‘right-sized,’” Lee tells Fortune of the number of patients each primary care doctor is assigned. “Too few, health care isn’t affordable enough, too many it’s not high-quality,” he says.
Moreover, when doctors are overloaded with patients and only get a few minutes for each visit, they end up referring them to other specialists instead of better diagnosing them during the initial visits, according to Lee. These additional appointments end up adding a lot of unnecessary additional costs. Of course, the annual membership fee is high enough that it might not be affordable to just anyone.
And though One Medical’s model is reminiscent at first glance of Kaiser Permanente’s network of hospitals, there are fundamental differences, according to Lee.
“Kaiser is one of the national standards for reasonably good care. They do well on care overall, and on affordability, overall,” he says. But “we’re, let’s call it, a smaller and more personalized model.” Unlike Kaiser’s large hospitals, One Medical’s offices are small and located throughout each of its cities. And unlike Kaiser, One Medical isn’t a closed system: It has relationships with local experts to whom its doctors refer patients when needed. Lee says that allows his company and its patients to have more options when it comes to their care.
This localized approach is also what Lee hopes will allow One Medical to someday provide health care services even to rural areas. Lee isn’t sure yet what that will look like, but it most likely won’t resemble the small colonies of offices it currently manages in high-density cities like San Francisco and New York.
Nevertheless, technology is sure to play a role, especially with telemedicine—delivering health care remotely via video calls, for example—gaining so much attention lately. That’s another area One Medical will invest some of its new funding into further developing, says Lee.
This latest round was led by J.P. Morgan Asset Management on behalf of PEG Digital Growth Fund II L.P. and AARP Innovation Fund L.P., with additional funding from existing and other new investors. To date, One Medical has raised $181.5 million in funding.
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Kaiser Permanente’s CEO talks about the Affordable Care Act in this Fortune video:
