business news in context, analysis with attitude

Amazon yesterday said that it has closed its $3.9 billion acquisition of 1Life Healthcare, owner of primary care organization One Medical, a deal that gives Amazon a strong potential foothold in the healthcare business.

One Medical has about 815,000 members and 214 medical offices in more than 20 markets.

Amazon CEO Andy Jassy trumpeted the acquisition on the website yesterday, with people who signed on to buy something seeing the following letter:

Today, getting great health care is often too difficult and inconvenient. Typically, you have to find a doctor, make an appointment a few weeks in advance, and drive 15-20 minutes or longer to the doctor’s office. When you get there, you wait in the reception area for a while, get called by a nurse into an exam room, wait another 10-15 minutes or so, and eventually see a doctor for only a few minutes who often then prescribes a medication. Finally, you drive 20 minutes or more to the pharmacy and wait for the medication to be ready—all while you or a loved one you’re caring for aren’t feeling well.

It’s a lot of work; and let’s face it, the system isn’t working for customers or clinicians.

At Amazon, we’re trying to improve the health care experience for customers. We started by building Amazon Pharmacy, with a broad selection of medications sent to you with reliable, free delivery. We then added RxPass, a new Prime benefit from Amazon Pharmacy, which for $5/month lets Prime members get as many medications as they need from a list of 60 medications frequently used to treat many common conditions—and shipping is free. We also recently launched Amazon Clinic, which offers a convenient, personalized, and affordable way to get medical advice and treatment for over 20 conditions (like migraines, allergies, sinusitis, and more) simply by messaging with a clinician—no appointments, no travel.

Today, we’re excited to announce that One Medical has joined Amazon and our mission to make it dramatically easier for customers to get what they need to stay healthy. With One Medical, customers can connect with clinicians 24/7 via video chat or messaging if that’s most convenient. Or, customers can choose to make an appointment same day or within days to visit any of One Medical’s offices in many U.S. cities. If you need a specialist, One Medical works closely with lots of hospital systems and can help you get a referral and an appointment quickly. One Medical works with most insurance providers, and while you can of course get your prescription filled anywhere that’s convenient for you, you can also choose to have it delivered to your door by Amazon Pharmacy. This is how primary care should work.

For a limited time, to celebrate One Medical joining Amazon, you can now join One Medical with a discounted annual membership of $144 for the first year (a 28% discount), the equivalent of $12 per month, for new U.S. customers.

We’re just at the beginning of what’s possible. Customers tell us there is a need to radically improve the health care experience, and we think we can help. At Amazon, together with One Medical, we’re determined to help make it easy for you to get the care, the medication, and other products and services you need to get and stay healthy.

Wishing you good health,

Andy Jassy

Amazon CEO

KC's View:

I know that despite all its current, well-chronicled problems, Amazon has to continue to grow and innovate.  That's what this is all about … investing in the future.

As I read Jassy's letter, though, I do find myself wondering if Amazon, which is having issues living up to its two-day-delivery promises, is able at the moment to live up to its healthcare promises.

It has made several forays with various healthcare initiatives, and they haven't quite worked out the way Amazon planned.  Now, maybe this will play out the same way as previous Amazon failures did;  after all, its smart phone was a dismal failure, but it learned a lot of things that allowed it to develop the Alexa-based smart speaker system. 

But I'm not sure that I would've been so high-profile with my promises just hours after closing the deal.  It might've made sense to be a little lower-key … but it also may be that with this level investment, there is outside pressure to show results quickly.  If that's the case, Amazon has other problems.