Published on: July 21, 2022
Amazon said this morning that it will spend $3.9 billion to acquire 1Life Healthcare Inc., which under the name One Medical provides membership-based primary healthcare services to employees for more than 8,000 companies in a dozen major US markets.
Underlining the strategic importance of the move for Amazon is the fact that it is its third largest acquisition, after only Whole Foods ($13.7 billion in 2017) and MGM ($8.5 billion earlier this year).
StatNews reports that "The news comes just a few months after Amazon announced plans to grow its network of brick-and-mortar clinics in 20 U.S. cities, following the expansion of its virtual care services through Amazon Care … Primary care is just Amazon’s latest play in health care. The company acquired online pharmacy PillPack in 2018 for about $753 million and launched its own online prescription delivery service Amazon Pharmacy in 2020."
One Medical describes itself as a "a human-centered, technology-powered U.S. primary care organization on a mission to make quality healthcare more affordable, accessible, and enjoyable through a seamless combination of in-person, digital, and virtual care services. One Medical combines in-person care in inviting offices across the country with digital health and virtual care services, making it easier for patients to schedule appointments, renew prescriptions, access up-to-date health records, and advance health outcomes."
"We see lots of opportunity to both improve the quality of the experience and give people back valuable time in their days,” said Neil Lindsay, SVP of Amazon Health Services, in a prepared statement. “We love inventing to make what should be easy easier and we want to be one of the companies that helps dramatically improve the healthcare experience over the next several years … We believe we can and will help more people get better care, when and how they need it. We look forward to delivering on that long-term mission.”
Individual memberships also are available at One medical for people whose companies do not have a relationship with One Medical.
On its website, One Medical says, "This is no ordinary doctor’s office. Rather than do things the typical way, we’ve created a membership-based primary care practice truly designed around our patients’ needs. We work with your insurance just like a regular doctor's office would, but we offer so much more. A One Medical membership makes it faster, easier, and more enjoyable to look after your health. All for just $199 a year."
One Medical posted the following video on YouTube to highlight its approach to the traditional doctor's office visit:
One Medical, according to its website, prides itself on "same-or-next-day appointments … appointments start on time … seamless care at 125_ offices nationwide … 24/7 virtual care … on-site lab services … (and) longer, non-rushed appointments."
- KC's View:
Health care has long been a priority for Amazon, which has made a number of moves - some successful, some not so much - into the segment.
It is interesting to me that when I read the announcement and go on One Medical's website, there is a lot of emphasis on the areas in which it seems to be trying to reduce friction in what can be a system that is loaded with it.
It also is interesting that as part of that, One Medical seems to be creating what often is called a concierge approach to medicine, but making it more affordable - which strikes me as sensible and offering a lot of runway for future growth.
As retailers with greater bricks-and-mortar presences - Walmart, CVS, Walgreens - develop stronger instore and insurance-centric health care offerings that look to take them beyond what retailers traditionally offer, it was inevitable that Amazon would make a move like this one, and we can expect the dominoes to continue to fall.