Amazon to Provide Healthcare to 300 Million Customers?

Amazon has 300 million customers to whom it sells every conceivable consumer product. Now it wants to add a massive new service to its business model—healthcare.

Seattle, Washington-based Amazon has bet $3.9 billion on San Francisco, California-based 1Life Healthcare, Inc. (One Medical)—one of the leading suppliers of health care services in the United States.

Nine months ago, Amazon announced that it intended to buy One Medical for $18 per share in an all-cash transaction valued at approximately $3.9 billion, including One Medical’s net debt. The purchase is Amazon’s third largest, after its $13.7 billion acquisition of Whole Foods and its $8.5 billion acquisition of MGM Studios.

From its beginning, One Medical’s mission was to, according to CEO Amir Dan Rubin, “Transform health care through its human-centered and technology-powered model to delight people with better health, better care, and better value, within a better team environment.”

Now owned by Amazon and with access to Amazon’s customer base, Rubin is now “Setting our sights on delivering even further positive impacts for consumers, employers, care teams, and health networks, as we join Amazon with its long-term orientation, history of invention, and passion for reimagining a better future.”

What Healthcare Services Does One Medical Offer?

One Medical’s primary care services are:

• Same/next-day appointments, in person or over video
• Longer appointments
• Drop-in lab services at One Medical offices
• A broad range of care including physical, chronic care, and mental health
• Over 125 locations across the U.S.
• ‘Compassionate’ (per the company) providers

What Do Those Services Cost?

One Medical charges an annual membership fee which starts at $144 per year and averages around $199/year. Each member receives access to the above listed primary care services. In addition, members can also receive virtual care services through the One Medical app 24/7/365. As One Medical described it, these services allow members to “continue their care from the comfort of home or on the go, whether it’s for acute needs at odd-hours, or to simply manage follow-up needs and prescription renewals.”

In 2021 One Medical bought Iora Health, a Medicare-focused primary healthcare chain that serves people 65 and older.

Essentially, Amazon’s existing consumers will now have access to One Medical’s primary care services, including Medicare provider care.

Amazon Targets the Healthcare Industry

Amazon hasn’t been shy about its intentions with the healthcare industry. It has a long history of healthcare related offerings and acquisitions. Some of its health-related service offerings include HealthLake, Halo, and PillPack.

One of its most recent forays in the healthcare space was with Amazon Care. Amazon Care was a primary care service for employees that incorporated telehealth and in-person medical services. In 2022, it announced that it would cease operations of the services by the end of 2022. For OTW’s coverage of the original launch of Amazon Care, as well as for a brief timeline of Amazon’s dive into healthcare, see “Is Amazon Getting Into the Healthcare Delivery Business?”

Amazon Care isn’t the first time that Amazon has started and stopped a healthcare operation. In 2018, OTW covered a partnership between Amazon, Berkshire Hathaway, and JPMorgan Chase & Co. The three had announced that they were forming an independent healthcare company to serve their U.S.-based employees. For the full story, see “Amazon, Warren Buffet and JP Morgan in Healthcare. Why?” The venture, called Haven, disbanded just three years after its launch.

Amazon Wants to Disrupt Primary Care

Regardless of its past experiences, Amazon remains confident with this acquisition. There is no doubt that Amazon is a power player and has the ability to disrupt. Whether or not it can disrupt the healthcare industry remains to be seen.

Amazon was clear about its goals for the primary care industry in its press release regarding the acquisition. In the press release, Amazon CEO Andy Jassy commented, “If you fast forward 10 years from now, people are not going to believe how primary care was administered. For decades, you called your doctor, made an appointment three or four weeks out, drove 15-20 minutes to the doctor, parked your car, signed in and waited several minutes in reception, eventually were placed in an exam room, where you waited another 10-15 minutes before the doctor came in, saw you for five to ten minutes and prescribed medicine, and then you drove 20 minutes to the pharmacy to pick it up—and that’s if you didn’t have to then go see a specialist for additional evaluation, where the process repeated and could take even longer for an appointment.”

Jassy continued, “Customers want and deserve better, and that’s what One Medical has been working and innovating on for more than a decade. Together, we believe we can make the health care experience easier, faster, more personal, and more convenient for everyone.”

Amazon – A Prime Purchaser

Only time will tell when it comes to Amazon and its healthcare goals. Additionally, only time will tell what Amazon’s efforts will mean for patients and providers. The more Amazon dives into the healthcare space, the more we wonder if it’s not a question of how, but simply when, it will disrupt the space.

Amazon seems like a prime (get it) purchaser for a subscription-based healthcare service provider. Its subscription-based model has served it well in the ecommerce industry. How it will leverage this expertise with its most recent acquisition will be interesting to observe.

Amazon also understands how automation and artificial intelligence can be leveraged to benefit the consumer. In this instance, the consumers will be the patients. There are countless applications in the healthcare industry that may benefit from this type of technology. How Amazon will incorporate automation and artificial intelligence into healthcare delivery will also be something to watch out for.

In the press release, Amazon Health Services Senior Vice President Neil Lindsay commented, “We’re on a mission to make it dramatically easier for people to find, choose, afford, and engage with the services, products, and professionals they need to get and stay healthy, and coming together with One Medical is a big step on that journey.”

Lindsay continued, “One Medical has set the bar for what a quality, convenient, and affordable primary care experience should be like. We’re inspired by their human-centered, technology-forward approach and excited to help them continue to grow and serve more patients.”

Virtual medical care options have been growing in popularity, especially since the COVID-19 pandemic. Virtual care is one of the many services that One Medical provides. If Amazon is able to grow, it will need to increase its network of healthcare providers. Especially those willing and able to provide virtual care services. It will be interesting to see how Amazon will develop relationships with providers to make these services available to patients.

If Amazon is able to scale its primary care service offerings it will also acquire data. Lots and lots of data. Data is vulnerable. We have written countless articles on healthcare companies being hacked and the costs of data breaches. How will Amazon manage the security of patient data? Will Amazon’s data expertise help it manage the security of data differently from what others are doing?

Data is also powerful. It can be leveraged in so many ways. Amazon has experience leveraging data in the ecommerce industry. Will it be able to leverage data in the same way in the healthcare space?

As our readers can tell, we have a lot of questions. What are your thoughts on Amazon’s acquisition of One Medical? Let us know in the comments below.