Will Amazon's One Medical Discount for Prime Members Make a Dent in American Healthcare?

Amazon may be gigantic, but America’s healthcare system is bigger. Here’s what plan sponsors should know about the company’s latest foray into medicine.

Amazon is one of the most ambitious and successful corporate enterprises in American history. But despite an excellent track record in expanding operations into many different lines of business, the company’s recent attempts to enter the healthcare delivery space have been met with more setbacks than triumphs.

First, in 2018, Amazon joined forces with JPMorgan and Berkshire Hathaway in an initiative to improve healthcare delivery and contain costs. This move was followed by the launch of a virtual healthcare clinic called Amazon Care in 2019. However, these initiatives were dissolved in 2021 and 2022 respectively with little to show for them, putting the company back to square one. Last summer, Amazon decided to change tact and acquire One Medical, a thriving mid-sized healthcare provider with dozens of locations across the country.

On November 9th, 2023, Amazon announced that a steeply discounted One Medical membership would be made available to tens of millions of Amazon Prime subscribers.

Then on November 9th, 2023, the company announced that a steeply discounted One Medical membership would be made available to tens of millions of Amazon Prime subscribers, representing the tech giant’s latest effort to disrupt the delivery of healthcare services in the United States. This has been successful in garnering media coverage, but does it actually represent a meaningful change to the healthcare status quo? To begin answering this question, let’s examine the details of what this new offering actually entails.

Amazon Prime members, who already pay $14.99 a month for the service, now have the option of accessing healthcare via One Medical for $9 per month and adding additional plan members for $6 a month. This is a significant discount from the standard One Medical rate of $199 per year. One Medical accepts most major insurance carriers, although members also have the option to pay for services out-of-pocket.

Prime members joining One Medical will gain access to 24/7 virtual health services, pediatric and family care, mental health services, and more. Prime members also have the ability to use Amazon’s subscription drug service, which allows patients to get certain medications delivered directly to their homes. However, members seeking in-person care via One Medical will be limited to the company’s existing physical facilities, which are mostly located in major urban centers.

Key Takeaways for Health Plan Sponsors

Amazon’s second attempt at transforming itself into a healthcare provider appears to have a more solid foundation than its first. The company’s new health initiative is anchored on the One Medical service model, which has a proven track record of success. One Medical has a substantial urban presence, with offices located in large cities across the country. In recent years, they have made great strides in building a virtual care practice for serving members who do not live near a physical One Medical facility.

Employers based in urban centers have already been sponsoring One Medical membership fees for years. Initially, One Medical’s business model primarily catered to urban employers that wanted easily accessible “same day” care for their employees. However, as the COVID-19 pandemic emerged and these workforce populations decentralized away from urban cores, One Medical shifted much of its workload to providing virtual care. This was a welcome development for plan sponsors, as it created a more accessible and equitable benefit for employees who do not live near a brick-and-mortar One Medical center.

The sheer volume of Amazon Prime members and the ability for them to add others to their One Medical subscriptions means that a very large fraction of the American population is now able to access care provided by One Medical at a discounted rate.

Amazon’s new subscription announcement looks to be a play to reach consumers directly. The sheer volume of Amazon Prime members and the ability for them to add others to their One Medical subscription means that a very large fraction of the American population is now able to access care provided by One Medical at a discounted rate. If they are successful in growing the brand nationally, it is quite possible that we could see a trend of employers adding One Medical memberships to their corporate benefit packages regardless of whether they are located near a physical One Medical facility.

While it is unlikely that this development alone will have a significant impact on the delivery of healthcare in America, it could prove to be an important step towards a more pluralistic and competitive healthcare marketplace. It is too soon to know whether Amazon will succeed in establishing itself as a major healthcare provider, but it is possible that the company could eventually disrupt the status quo by undercutting mainstream providers on price and becoming a leader in virtual healthcare delivery. Plan sponsors should continue to monitor the situation and consult with qualified advisors to determine whether One Medical’s health services are a good fit for the needs of their employee populations.

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