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July 29, 2022

Amazon muscles its way further into healthcare with the $3.9bn One Medical deal

Amazon is serious about pursuing a major role in the healthcare industry, which is shown by the acquisition of One Medical.

By GlobalData

Prepare for Amazon to take on the medical industry as its next big disruptor play. Amazon ’s multi-billion dollar planned acquisition of One Medical shook both the healthcare and technology sectors as industry watchers guessed what the net impact would be on current providers and patients.

While the deal is not the retailer’s first foray into healthcare, the transaction’s dollar value and the pairing with Amazon ’s other interests in both brick-and-mortar retail (Whole Foods and Amazon Fresh) and pharmaceuticals (PillPack ) show just how serious the company is about pursuing an outsized role in the healthcare industry.  One Medical, which operates just under 200 clinics, offers patients a subscription-based telehealth service that dovetails with Amazon ’s own Prime model. 

Bringing thousands of employers to the Amazon fold, One Medical could add a new prospect pool for Amazon ’s Cloud services arm.  But this also begs the question of patient privacy with some legislators protesting the deal.  Based on Amazon ’s monopolistic reputation, Senator Amy Klobuchar (D-Minnesota) asked the Federal Trade Commission to investigate the deal. Amazon and One Medical rejected any concerns about patient data privacy saying that both entities would adhere to all Health Insurance Portability and Accountability Act (HIPAA) regulations.

Others flagged potential issues around patient care. Amazon , which has garnered a reputation for poor treatment of its own labour, is well known for hyper-efficiency.  Associating that hypervigilance on removing costs and potentially streamlining patient care to the point of delivering unacceptable healthcare outcomes has critics and some One Medical patients crying foul about the union.

Amazon has made several investments in healthcare over the years including the aborted Haven partnership with Berkshire Hathaway and JP Morgan Chase.  But it may be its brick-and-mortar presence through Whole Foods and Amazon Fresh that has industry watchers questioning how expansive it will get in healthcare.  Amazon could potentially sell pharmaceuticals through those outlets. 

And through its Amazon Web Services unit, Amazon already has abundant access to consumer and corporate data.  If the deal closes successfully, Amazon will now also own the data of three-quarters of a million patients.

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