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Amazon makes further healthcare inroads with $3.9B One Medical deal

Amazon and One Medical announced their plans to merge on Thursday morning, in a $3.9 billion mega deal that would see the retail giant continue its ambitious string of healthcare acquisitions.

Under terms of the merger agreement, which is subject to customary closing conditions, Amazon will acquire One Medical for $18 per share in an all-cash transaction. 

San Francisco-based One Medical is a technology-focused primary care organization offering in-person, digital and virtual care services that it says are designed to improve the healthcare experience for its customers.

“The opportunity to transform health care and improve outcomes by combining One Medical’s human-centered and technology-powered model and exceptional team with Amazon’s customer obsession, history of invention, and willingness to invest in the long-term is so exciting,” said One Medical CEO Amir Dan Rubin, who will remain in that role, in a statement. 

He said the deal represents an opportunity to help build a primary care experience with Amazon that’s “more accessible, affordable, and even enjoyable for patients, providers, and payers.”

Amazon has been investing big in healthcare over the past few years, and this is one of its biggest statements yet that it plans to be a big player in the provision of both telehealth and in-person care across the U.S. going forward.

“We think health care is high on the list of experiences that need reinvention,” said Neil Lindsay, SVP of Amazon Health Services, in a statement. 

“Booking an appointment, waiting weeks or even months to be seen, taking time off work, driving to a clinic, finding a parking spot, waiting in the waiting room then the exam room for what is too often a rushed few minutes with a doctor, then making another trip to a pharmacy – we see lots of opportunity to both improve the quality of the experience and give people back valuable time in their days,” he said.

Industry analysts say the deal makes sense, on paper at least, for both companies.

“With the recent restructuring of the healthcare business and consolidating all the various units such as Pillpack and AmazonCare under one leader, Amazon is digging in for the next phase of growth,” said Damo Consulting CEO Paddy Padmanabhan, who has written extensively about Amazon, Big Tech, digital transformation and the consumerization of healthcare, in a statement sent to Healthcare IT News.

“The One Medical acquisition not only fits with AmazonCare to enhance the primary care offering, it also helps alleviate the scaling problems AmazonCare has had in a tight labor market,” said Padmanabhan. “In addition, this is one way for OneMedical to sidestep the uncertain economic outlook and financial markets and secure some stability for the long term”

For OneMedical, getting scooped up by the ecommerce and cloud services offers a “path to sustained growth in a market where the battle for primary care is intensifying and leading health systems step up their consumer digital efforts to focus on growth and retention,” he added.

He cautioned, however, that the acquisition “raises interesting questions” about how more traditional health system clients of AWS will view Amazon’s bold move into the primary care business.

“Among other big tech firms, only Oracle’s acquisition of Cerner comes this close to the core healthcare services business,” said Padmanabhan.

Twitter: @MikeMiliardHITN
Email the writer: [email protected]

Healthcare IT News is a HIMSS publication.

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