Amazon Acquires One Medical For $3.9 Billion

Amazon has announced that an agreement has been made for Amazon to acquire primary care network One Medical. The deal is valued at $3.9 billion and will include up to 190 clinics, a subscription telehealth service, and contracts with thousands of employer clients under Amazon’s authority. The acquisition is said to accelerate the tech giant’s ambition to develop a healthcare business capable of entering the employer market.

The agreement comes as Amazon continues to enter several various health markets. Amazon now has a hand in telehealth, primary care, grocery, wearables, pharmacy. And diagnostics. The tech giant will try to integrate medical information with applications that can assist patients and their clinicians. These applications advise suitable health activities and products, reduce clinical visits, and provide food to patients through Amazon Fresh. 

One Medical will become a component of Amazon Care. The hybrid primary care program was developed to provide care to groups of healthcare providers in accordance with each patient based on their needs. The program consists of two fundamental elements: primary and immediate telehealth care with a nurse or clinician via an application, and in-person care, with prescription delivery, to the home. However, after a year since the program’s launch, its in-person service has not seen a huge uptake. Shortages in the labor market and lack of track record can be identified as the reasons. 

Despite a common problem of staff shortages, Amazon believes that One Medical is worth a hefty sum of $3.9 billion. For One Medical, the benefits to joining Amazon are clear. In 2020, the network reported consistent net losses throughout the year. The primary care market is progressively competitive. In order to develop their networks of physical clinics, behemoths like CVS Health and UnitedHealthcare are competing with independent providers like One Medical, Oak Street Health, and VillageMD. In some circumstances, these providers even cooperate with them. The acquisition will help provide stability to One Medical as they receive financial support from the tech giant. 

Furthermore, as One Medical embraces more value-based care contracts, Amazon could provide assistance in risk management. Since purchasing Iora last year, One Medical has expanded its patient base to include Medicare recipients, encouraging them to enter into full-risk contracts and generating income through savings. Amazon will help One Medical in providing value-based care through their extensive data management experience.