Amazon is expanding its healthcare footprint with the acquisition of One Medical, a membership-based primary care practice. Amazon agreed to purchase the company for $18 per share, approximately $3.9 billion, in an all-cash transaction, including One Medical’s net debt. The multi-billion-dollar deal is subject to customary closing conditions, and it needs the approval of regulatory agencies and One Medical’s shareholders. As part of the deal, One Medical CEO Amir Dan Rubin will remain in his current position.
Neil Lindsay, senior vice president of Amazon Health Services, commented on the acquisition.
“We think health care is high on the list of experiences that need reinvention. 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,” said Lindsay in a July 21, 2022 news release.
“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. Together with One Medical’s human-centered and technology-powered approach to health care, 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,” Lindsay added.
Membership-based healthcare model
According to the news release, One Medical’s mission is to make quality healthcare more accessible and more affordable while also improving the patient experience. One Medical focuses on making it easier for patients to make appointments, renew prescriptions, access their health records, and reach their personal healthcare goals. One Medical is a membership program with personal, direct-to-consumers memberships and employer-sponsored memberships for $199 a year. One Medical works with over 8,000 companies to provide health benefits to their employees.
“A modern approach to primary care,” says One Medical’s website. “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,” the company says.
With a One Medical membership, patients receive:
- Same- or next-day appointments
- Appointments that start on time
- Seamless care at over 188 offices in 25 U.S. markets, including San Francisco, Atlanta, Boston, Chicago, Los Angeles and New York
- 24/7 virtual care
- On-site lab services
- Longer appointments that are not rushed
“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 Rubin. “There is an immense opportunity to make the health care experience more accessible, affordable, and even enjoyable for patients, providers, and payers. We look forward to innovating and expanding access to quality healthcare services, together.”
According to the Washington Post, One Medical went public in 2020, but has not yet turned a profit. In the first quarter of 2022, the company posted losses of $90 million. Though it lost significant sums of cash, the company generated total revenue of $254 million during the same period, a 110% increase over the first quarter of 2021, reports The Post.
So why a health care company? Amazon has been moving into the healthcare space through acquisitions and other strategies over the last several years. For example, in November 2020, Amazon launched its own online pharmacy to provide door-to-door delivery of prescription medications and refills in certain markets. Amazon Prime members can save money on prescriptions whether they utilize their health insurance or access Amazon’s own savings. This became a helpful service for Amazon Prime members during the pandemic because they didn’t need to leave home to get their prescriptions, and the prescriptions are often delivered faster than local pharmacies can fill the same orders.
Amazon is expanding its footprint into healthcare by changing how healthcare works. One Medical seems well aligned with this mission, putting members’ and patients’ needs first while using the membership model which has worked so well for Amazon. While One Medical may not yet be profitable, Amazon doesn’t typically make frivolous purchases. They wouldn’t buy the company if they didn’t think it was worth the investment. How they use that investment remains to be seen.