Amazon to buy One Medical for $3.9 billion in major healthcare expansion

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Amazon will acquire primary care provider One Medical for $3.9 billion, the companies announced Thursday, in a major expansion of the tech giant’s healthcare ambitions.

The move — one of its biggest acquisitions ever — will give Amazon a physical network of offices and healthcare providers, as well as access to the technology the startup has built to enable virtual visits. at the doctor. It adds to the company’s existing healthcare portfolio, which includes an online pharmacy and Amazon Care, a virtual emergency care service.

But already, privacy advocates were worried about the consequences for the tech giant – which already knows what millions of customers have purchased and requested from Alexa – of gaining access to patient health records. And some of Amazon’s healthcare efforts have failed in the past.

“We believe healthcare is high on the list of experiences that need to be reinvented,” Neil Lindsay, senior vice president of Amazon Health Services, said in the statement. The operation will aim to improve the quality of service for customers. (Amazon founder Jeff Bezos owns The Washington Post.)

Amazon’s offer of $18 per share represents a 77% premium for the subscription provider. Shares of 1life health care Inc, the parent company of One Medical, soared more than 68%, to just over $17, after the announcement.

One Medical is a membership-based primary care provider with a focus on digital services and building a seamless relationship with patients. Based in San Francisco, the society operates 188 offices with 767,000 members but is not profitable. The provider lost nearly $91 million in the three months ended March 31. One Medical generated 254.1 million in the first quarter, more than double what it had collected at the same time last year.

Amazon launches an online pharmacy

One Medical uses a subscription model and strategy of locating offices close to the workplace, and markets itself more like a technology company by allowing members to use an app to book appointments and track records health.

The company said about 50% of its revenue comes from Medicare, the government’s insurance program for people over 65, according to the latest quarterly report.

Patients pay an annual fee of $199 with offices serving major metro areas including Atlanta, Chicago, Los Angeles and the District.

In the past, Amazon has turned to acquisitions to rapidly expand its reach and expertise, including with its nearly $14 billion purchase of Whole Foods in 2017 and more recently its $8 billion bid for the studio. of MGM cinema. For years, the company had worked to build its grocery business and studios, and these acquisitions got Amazon off to a quick start.

The acquisition of One Medical – which is considered a boutique service and already follows a subscription business model – is likely to provide a similar boost to Amazon’s existing healthcare business. In 2020, he launched Amazon Pharmacy, two years after acquiring online pharmacy PillPack for $753 million. And he built Amazon Care, which offers telehealth visits to employees of select companies, including Hilton in select cities.

Amazon’s attack on the pharmaceutical industry has begun

In leaked audio from a November show of hands, Amazon Chief Executive Andy Jassy told staff that Amazon Care is one of the company’s key innovations, pointing out that the division aims to grow through partnerships and new services, Insider reported earlier this year.

But Amazon’s earlier healthcare initiatives have also failed. Haven, an ambitious effort by three of America’s largest companies – Amazon, JPMorgan Chase and Berkshire Hathaway – to tackle soaring healthcare costs and improve patient outcomes was shut down last year after two years.

Health data privacy considerations have garnered increased attention in Washington.

Top-tier healthcare company backed by Amazon, JPMorgan and shutters of Berkshire Hathaway

In recent weeks, following the Supreme Court’s decision overturning the landmark abortion rights decision Roe v. Wade, lawyers, lawmakers and ordinary Americans have turned their attention to how personal data could be used by state agencies to monitor and punish people seeking reproductive health services, including abortions.

In a letter Wednesday, six House Democrats asked whether major cloud computing players Oracle and Amazon Web Service were taking steps to “protect the privacy rights of those seeking to exercise their reproductive rights.”

“Data collected and sold by your company could be used by law enforcement and prosecutors in states enforcing aggressive abortion restrictions,” the lawmakers wrote, with particular concern about the collection and disclosure. use of location data.

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