Amazon’s One Medical acquisition brings it closer to being a healthcare giant

Rate this post

Amazon is continuing its expansion into health care, announcing Thursday that it will acquire One Medical, a “technology-powered” combined primary care and telehealth service, for nearly $4 billion. This makes this one of Amazon’s biggest acquisitions to date and indicates that the e-commerce giant is taking its plans for consumer healthcare very seriously. But given the growing scrutiny over Amazon’s antitrust problems, it’s unclear whether the merger will make it past regulators.

“I think it’s about getting the consumer shopping experience for health, which has been talked about for decades, but no one has done it yet,” health tech investor Chrissy Farr told Recode . “Wherever I think they’re going to go will be the consumer health player.”

In the United States, health care can be expensive and difficult to obtain, and quality does not always match cost. Tech companies like Amazon may have the answer to what ails the industry that is supposed to fix what ails us. It is also possible that their moves in this sector will give them even more power over us and another industry to dominate. And while antitrust regulators have grown concerned about Big Tech’s growing power and are likely to scrutinize the deal, there may not be much they can do to stop it.

Amazon has been in the health field for years. It acquired PillPack, an online pharmacy, in 2018 and then launched Amazon Pharmacy in 2020. Prime members get special discounts on drugs not covered by their insurance. Amazon has been moving into diagnostics in recent years and had its own Covid-19 test (which was recently discontinued). The company launched Amazon Care, a primary care service, in 2019 for some of its own employees before rolling it out to other companies as an employee benefit earlier this year. Amazon has even branched out into medical devices and health supplies, and behind the scenes, Amazon is also investing in developing technology that powers the industry.

So, within a few years, Amazon owns (or will have) parts of almost every aspect of the healthcare industry, seemingly everything except hospitals and health insurance.

One Medical is one of several tech and health companies focused on telehealth, or virtual care, that gained traction during the pandemic, when physical visits were much harder to come by. For up to $199 a year, patients get 24-hour access to virtual care at providers through a telehealth app, though it’s worth noting that the service is meant to supplement your health insurance usual, do not replace it. One Medical also has physical offices in many major cities across the United States. It’s also made a place for itself as an employer benefit for companies like Google and Yelp, though membership is open to everyone.

To non-patients, One Medical may be best known for allegations that it gave Covid-19 vaccines to people who were ineligible for them at a time when vaccine supplies were in high demand and in short supply. (A doctor denied it.)

Farr also noted that One Medical has a lot of data — the company had 767,000 members in its most recent earnings report — and owns Iora Health, a primary care service for Medicare patients. One Medical will also bring its brick-and-mortar clinics, a feature Amazon Care lacks, into Amazon’s portfolio, which Amazon may believe is necessary for its healthcare ambitions to grow. Just look at how its purchase of Whole Foods, which remains Amazon’s biggest acquisition, has given the company a bigger brick-and-mortar presence.

Amazon reviewers weren’t thrilled with the news. Stacy Mitchell, co-executive director of the Institute for Local Self-Reliance, describes the proposed acquisition as “Amazon’s latest move to extend its tentacles into health care.”

“As with their other moves in this sector, the goal is to broker the delivery of health care by becoming the middleman between patients, doctors and insurers,” Mitchell explained. “It’s exactly what Amazon has done in other important sectors, such as e-commerce, cloud services and voice.”

Again, the deal is pending regulatory approval, which means getting approval from the Federal Trade Commission, which is chaired by Amazon critic Lina Khan. Under his tenure, the FTC has already dealt with one major Amazon merger: its purchase of MGM Studios, which closed last March after the FTC made no move to block it. At the time, however, the agency was one crucial vote short of breaking the Democratic commissioner’s tie. Now he has that commissioner, and he can challenge the MGM merger if not this one.

Mitchell and Krista Brown, a senior policy analyst at the American Economic Liberties Project, an antitrust advocacy group, said they expected and believed the merger would be challenged by regulators.

“The acquisition of One Medical will solidify Amazon’s growing presence in the healthcare industry, undermining the competition,” Brown said. “Amazon has no business being a major player in the healthcare space, and regulators should block this $4 billion deal to make sure it doesn’t become one.”

But some antitrust experts weren’t so sure regulators had a case to stop the deal, arguing that Amazon was too new and not big enough in the health care industry.

“While Amazon is currently in the crosshairs of antitrust agencies, I would expect this deal to go through as this is a relatively new market for the company,” Kellie Lerner, group co-president of antitrust and commercial regulation by Robins Kaplan LLP. , said

But if the agencies viewed the acquisition through a “traditional antitrust lens,” the merger shouldn’t be a problem, according to Abiel Garcia, an antitrust attorney at Kesselman Brantly Stockinger. He added that there could be some problems if enforcers raise concerns about things like acquiring patient data.

In the press release announcing the merger, Amazon Health Services senior vice president Neil Lindsay framed the acquisition as a way to make people’s lives easier and improve their healthcare experience, with a “ human-centered, technology-driven approach.”

Whether this approach improves health care remains to be seen, but it will certainly be consistent with how Amazon has taken on everything else.

“It’s the digital gateway,” Farr said. “A lot of the way you access care is through a health plan or provider. Amazon could be a one-stop shop for that.”

Source link

Leave a Comment