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Amazon Acquires Primary Care Provider One Medical in Bold Move Pushing Deeper Into Healthcare

Amazon Buys One Medical, Driving a New Outlook for the Future of Healthcare and Employee Benefits

Massive news broke in late July detailing the purchase of Primary Care Provider One Medical by the well-known business behemoth Amazon. The total price tag cost 3.9 billion dollars. Amazon has dipped a toe into the healthcare waters before; however, this time around, it feels different.

Amazon’s purchase of One Medical epitomizes the double-edged sword our trusted clients witness every day in healthcare. Consumers and companies are looking for quality benefits and healthcare from trusted professionals, yet conflicts of interest abound at almost every turn. Incentives can often be misaligned, and employees are left disengaged.

Amazon Moves Deeper Into Healthcare

For some historical context, Amazon acquired PillPack, an online pharmacy, in 2018, followed up by partnering with Berkshire Hathaway and JPMorgan Chase on a non-profit healthcare organization known as ‘Haven’ in 2019. Haven fell flat and dissolved in 2021 after only three years on the scene.

While Amazon has become the household name in global e-commerce, web services, online groceries, and many other industries, its influence is felt in almost every sector of the economy. Healthcare proves to be a challenging foe for one of the most innovative companies of our time. Wading through the myriad of healthcare providers, networks, and insurance companies is like navigating the Bering Sea in the winter. Discovery channel fans out there will catch my drift. You can count on unpredictability and challenges to arise. Amazon sees an opportunity for disruption. Newly appointed CEO Andy Jassy is not content with wading into the water; Amazon is jumping in headfirst.

Neil Lindsay, SVP of Amazon Health Services, detailed the company’s vision in a press release stating,

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 few rushed 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.

Timing is everything and the Coronavirus pandemic has led Americans and the world down a path of more zoom calls and virtual meetings than ever before. Acceptance of telehealth services has accelerated along with the remote workforce.

According to the findings by McKinsey & Company, a top global management consulting firm, telehealth is here to stay,

Telehealth utilization has stabilized at levels 38X higher than before the pandemic. After an initial spike to more than 32 percent of office and outpatient visits occurring via telehealth in April 2020, utilization levels have largely stabilized, ranging from 13 to 17 percent across all specialties.

Amazon has been running its own primary and urgent care service, Amazon Care, for employees across the United States. Amazon Care focuses on virtual and telehealth meetings with healthcare providers, although they do offer home visits as well. The One Medical acquisition adds substantial reach, including 767,000 members and 8,500 employers to the fold. The partnership between the two looks to capitalize on an outdated healthcare system and consumers embracing mobile service.

Questions Abound

Naturally, this announcement has raised some serious questions regarding anti-trust laws and privacy concerns. While HIPAA laws provide formidable layers of legal protection for patients, we know consumer data has driven the success of Amazon’s e-commerce revolution. The biggest question I have is: how will these ingredients mix?

Outlook in the Healthcare Industry

It can be hard to know who is watching out for our best interest through the myriad of different options available in the market. To combat the misalignment and confusion, many forward-thinking employers are adopting one holistic strategy that encompasses health insurance, retirement and streamlined HR processes. There’s no doubt that the benefits decisions employers make will become more critical as new advancements enter the market over the next decade.

Will Amazon’s emergence put the healthcare industry on notice and push the industry to improve experiences for the consumer? Time will tell; it feels like there are more questions than answers at this point. Jeff Bezos’ customer-centric mission will be put to the test. As he said, "if we can keep our competitors focused on us while we stay focused on the customer, ultimately we'll turn out alright."

I cannot help but think Amazon’s new competitors have taken notice.

Want to learn more about how to enhance employee benefits and reduce the added stress on your workforce? Check out this article, “Employers Enhance Benefits To Address Growing Stress in the Workforce.”