How Will Amazon’s Acquisition of One Medical Impact Healthcare?

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Health experts say Amazon’s purchase of the telehealth and primary care service One Medical could affect the healthcare landscape in many ways – not all good. ANGELA WEISS/AFP via Getty Images
  • Amazon has announced it will acquire subscription-based healthcare provider One Medical
  • Under the new merger, the company plans to improve how people book appointments and the experience of being seen by a physician.
  • The acquisition has raised questions about medication costs, as well as concerns about data privacy.

Amazon is a name you probably most associate with e-commerce. Now, the retail giant is deepening its presence in healthcare.

On July 21st, Amazon announced plans to acquire One Medical, a telehealth and primary care service, in an all-cash deal worth $3.9 billion. The deal is currently pending regulatory approval.

The One Medical platform is provided on a membership basis and gives patients 24/7 virtual care access via a telehealth app. The company also has 188 brick-and-mortar clinics across the US.

In a press release announcing the acquisition, Amazon Health Services senior vice president Neil Lindsay said healthcare is “high on the list of experiences that need reinvention.”

He said the merger would improve the healthcare experience with a “human-centered and technology-powered approach.”

Lindsay added that Amazon hopes to improve how people book appointments and the experience of being seen by a physician.

Echoing that sentiment, One Medical CEO Amir Dan Rubin, described the merger as “an immense opportunity to make the healthcare experience more accessible, affordable and even enjoyable for patients, providers, and payers.”

Amazon already has some skin in the healthcare game. In 2017, the company bought health food chain Whole Foods, and in 2018, they announced the purchase of PillPack Inc. – an online pharmacy.

They also offer Amazon Care – a service that offers telehealth care to employees in some companies.

Add to that, Amazon Web Services, the company’s cloud computing division, provides products for healthcare and offers a healthcare accelerator for start-ups.

What does this latest acquisition mean for the healthcare industry in the US, and more specifically, the patient experience?

Looking at the healthcare industry as a whole, Sebastian Seiguer, JD, CEO of Johns Hopkins-backed digital health platform emocha Health, believes the acquisition will have little impact on the status quo.

“There is no reason to believe that Amazon’s acquisition of One Medical will have any major impact on healthcare. There are thousands and thousands of healthcare facilities in this country, and there are many other virtual primary care providers, such as Eden Health, Heal, and PeopleOne,” he points out.

Ali Parsa, PhD, CEO of Babylon, one of One Medical’s main competitors, agrees but believes the acquisition may prompt a ‘ripple effect’ in how other healthcare providers approach customer care.

“Amazon has a dreadful reputation for the way it manages its workforce but has an excellent reputation in the way it focuses on its customers. The focus they bring to the customer is going to be very valuable in healthcare,” he says.

“We could see a positive impact because other healthcare providers will think they also need to improve the patient experience.”

Like Babylon, and other telehealth providers, the current One Medical model allows patients to see a doctor within minutes.

For an annual fee of $199, members can book appointments, renew subscriptions, and track health records via the company’s app and website.

Parsa believes under Amazon, the company will continue the rollout of video and text services, which could make getting appointments and referrals quicker and more accessible.

According to Lindsay, the merger is an opportunity to “give people back valuable time in their days.”

He suggests that it will hopefully replace some of the more inconvenient aspects of seeing your physician, from securing a quick appointment and trekking to the pharmacy, to finding a parking spot outside the clinic.

The acquisition may also allow for the integration of Amazon’s other healthcare offerings, including grocery and pharmacy.

In theory, that means Amazon could become a one-stop shop for your healthcare needs, providing primary care, health food retail, and prescriptions.

Seiguer isn’t totally sold on the benefits of such a service.

“Having food choices and medical data combined seems like it could eventually only benefit patient health,” he says.

“However, the fact remains that the highest cost drivers in this country are people with lower incomes with deadly chronic diseases,” he explains.

“These populations are not Amazon Prime members, they are not shopping at Whole Foods, and will not value the convenience of bundled grocery-pharmacy-primary care subscriptions.”

The acquisition has also raised questions about anti-competitive effects, as well as concerns about data privacy.

While an integrated service combining elements from Amazon’s other healthcare offerings may seem like a plus for some, it may be worrying to others who are concerned about how their sensitive medical data is shared.

Fortunately, Seiguer says there are laws in place to protect your medical data, including the Health Insurance Portability and Accountability Act (HIPAA).

“With most health tech startups hosted on Amazon Web Services, there is no change in the scope of data that Amazon holds as a custodian,” says Seiguer.

“The fact that Amazon owns these business lines does not change the obligations of either One Medical or Amazon Web Services to abide by HIPAA.”

Amazon says data privacy fears are unfounded.

“Both One Medical and Amazon have stringent policies protecting customer privacy in accordance with HIPAA and all other applicable privacy laws and regulations,” Amazon spokeswoman Angie Quennell said in a statement.

While the acquisition has the potential to improve patient access to primary care, Seiguer believes it may fall short for the people who need medical care most.

He says an approach to managing chronic conditions for the most costly and vulnerable populations is missing from Amazon’s health strategy.

“Medication is a critical element in the management of chronic diseases and the ever-rising cost of medications will only increase if Amazon’s approach broadly succeeds,” he says.

“Prescribing and delivery convenience has artificially-inflated medication demand and caused medication prices to spike. These price increases benefit the entire medication supply chain, including Amazon.”

Those with chronic conditions may also feel they benefit more from in-person visits to a regular physician they know and trust, a comfort that may be removed if One Medical takes a telehealth-first approach.

Much remains to be seen about how Amazon’s acquisition of One Medical will affect healthcare across the United States.

There are concerns about the effect it could have on data privacy and the rising cost of medications.

On the other hand, it could mean that having 24/7 access to physicians and getting seen – and indeed referred – more quickly becomes the norm.

A quick and convenient healthcare service will be a welcome improvement on lengthy appointment wait times, but Seiguer says it shouldn’t come at the expense of quality patient care.

“More choices for healthcare access can only be good for the customer experience,” he surmises.

“But healthcare is not a commodity and there are limits to customer or “user” experience being valued over quality of care.”

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