Ed note: One Medical Clinics have popped up all around Seattle, some catering to seniors. In July 2022, it was announced that Amazon, Inc. agreed to acquire One Medical for about $3.9 billion in an all-cash deal. Prior to the announcement, pharmacy chain CVS Health had also bid for the company. Amazon formally acquired One Medical on February 22, 2023. This continues a trend in corporate for-profit entities owning health care delivery systems. The company, of course, has a highly compensated executive team and is beholden to its stockholders as well as to the customers (patients) they serve. Two promotional posters have appeared in our mail room bulletin board. Time will tell as to whether Amazon can deliver health care. Caveat emptor!
Amazon’s relentless push to become a primary care provider reached a milestone recently when the e-commerce giant completed its acquisition of One Medical for $3.9 billion.
But as is the case with most activities involving retailers trying to transform health care, the story is just beginning. Now comes the more difficult work of assimilating the concierge medicine provider’s services into Amazon’s operations and building out plans to meet consumers’ needs across the care continuum.
How successful Amazon is at integrating One Medical — with its prior acquisitions in pharmacy, consumer and employee health, diagnostics and therapeutics, care coordination and remote monitoring, and enterprise health IT — will go a long way in determining how great an impact the company can have in care delivery.
5 Takeaways from the One Medical Purchase (from the American Hospital Association)
1 | Amazon is still playing catch-up.
The transition to becoming a provider will broaden Amazon’s considerable health care portfolio, but the company has a long way to go if it plans to catch retail primary care providers like CVS Health and Walgreens Boots Alliance.
Takeaway
One Medical gives Amazon access to more than 200 brick-and-mortar physicians’ offices with about 815,000 members, according to its latest financial statement. That’s a far cry from the more than 1,100 Minute Clinics and 900-plus HealthHUBs CVS Health now operates and the 680 VillageMD clinics co-located near Walgreens stores. Walmart, meanwhile, now operates 32 health centers in five states with 16 more locations expected to open this year and 28 more locations in 2024. Many analysts believe the retailer will rapidly scale its health clinics nationally as it gains more operational experience.
2 | The real deal: Building trust with consumers.
The game changer may be Amazon’s ability to attain and keep consumer trust and permission because it offers products and services that are relevant, valued and hyperconvenient, notes Jim Fields, a partner at Oliver Wyman, in a recent report.
Takeaway
Amazon is looking to redefine consumer expectations of care. If Amazon’s bet pays off, it could require providers to invest significantly and redesign their delivery models to keep up with higher consumer expectations created by the One Medical-Amazon model. For consumers, this allows Amazon to blend its primary care doctor relationship with health care information and apps that offer suggestions and recommendations for health activities, prescription delivery (through PillPack), healthy food (through Whole Foods and Amazon Fresh) and have it all connected to a patient’s primary care physician.
3 | Expanding a model for more convenient, affordable care.
One Medical already has thousands of employer relationships for its tech-enabled primary care platform.
Takeaway
This deal gives Amazon the ability to present a relevant story to employers who are looking to shape a different, more efficient and affordable health care journey for their employees.
4 | A springboard to tackle price transparency.
Some believe the One Medical acquisition will be a key piece of the holy grail Amazon has been after for years now — unraveling price transparency.
Takeaway
One Medical has a strong relationship with health systems, which could give Amazon a path to see the true costs of referrals, Christina Farr, an investor at the venture capital firm OMERS Ventures, said in a recent Modern Healthcare report. Amazon could combine One Medical data with data it has from prescriptions and expenditures to develop a fuller picture of patient care costs.
5 | The Federal Trade Commission (FTC) isn’t done investigating Amazon.
Despite not pursuing a court case to block the One Medical purchase, the FTC still could challenge the deal.
Takeaway
The FTC continues to investigate the deal over concerns about possible harm to competitors as well as to consumers that may result from Amazon’s control and use of sensitive consumer health information held by One Medical, FTC spokesman Douglas Farrar recently told CNN. FTC concerns include the potential for Amazon to assert its economic dominance and misuse patient information for other purposes such as targeted advertising or e-commerce.