How will Amazon’s acquisition of One Medical affect healthcare?

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Health experts say Amazon’s purchase of telehealth and primary care service One Medical could affect the health landscape in many ways — not all of them good. ANGELA WEISS/AFP via Getty Images
  • Amazon has announced that it will acquire subscription-based healthcare provider One Medical
  • With the new merger, the company plans to improve the way people book appointments and the experience of being seen by a doctor.
  • The acquisition raised questions about drug costs as well as data privacy concerns.

Amazon is a name you probably associate most with e-commerce. Now the retail giant is deepening its presence in healthcare.

On July 21, Amazon announced plans to acquire One Medical, a telehealth and primary care service, in an all-cash deal valued at $3.9 billion. The deal is currently awaiting regulatory approval.

The One Medical platform is provided on a membership basis and gives patients 24/7 access to virtual care through a telehealth application. The company also has 188 physical clinics in the US.

In a press release announcing the acquisition, Amazon Health Services senior vice president Neil Lindsay said healthcare is “high on the list of experiences that need reinvention.”

He said the merger will improve the healthcare experience with a “human-centric and technology-based approach”.

Lindsay added that Amazon hopes to improve the way people book appointments and the experience of being seen by a doctor.

Echoing that sentiment, One Medical CEO Amir Dan Rubin described the merger as “a tremendous opportunity to make the healthcare experience more affordable, accessible and even enjoyable for patients, providers and payers.”

Amazon already has some skin in the healthcare game. In 2017, the company bought the health food chain Whole Foods, and in 2018 it announced the purchase of PillPack Inc. – online pharmacy.

They also offer Amazon Care, a service that offers telehealth care to employees at some companies.

Add to that Amazon Web Services, the company’s cloud computing division, provides healthcare products and offers a healthcare accelerator for startups.

What does this latest acquisition mean for the US healthcare industry and specifically for the patient experience?

Looking at the healthcare industry as a whole, Sebastian Seguer, JD, CEO of Johns Hopkins-backed digital health platform emocha Health, believes the acquisition won’t have much of an impact on the status quo.

“There is no reason to believe that Amazon’s acquisition of One Medical will have a major impact on healthcare. There are thousands and thousands of healthcare facilities in this country and there are many other virtual primary care providers such as Eden Health, Heal and PeopleOne,” he points out.

Ali Parsa, MD, CEO of Babylon, one of One Medical’s main competitors, agrees, but believes the acquisition could cause a “ripple effect” in how other health care providers approach care for customers.

“Amazon has a terrible reputation for the way it manages its workforce, but it has an excellent reputation for the way it focuses on its customers. The focus they bring to the customer will be very valuable in healthcare,” he says.

“We can see a positive impact because other healthcare providers will feel they need to improve the patient experience as well.”

Like Babylon and other telehealth providers, One Medical’s current model allows patients to see a doctor within minutes.

For an annual fee of $199, members can book appointments, renew subscriptions and track health records through the company’s app and website.

Parsa believes that under Amazon, the company will continue to roll out video and text services, which can make getting appointments and referrals faster and more accessible.

According to Lindsey, the merger is an opportunity to “give people back valuable time in their days.”

It suggests it will hopefully replace some of the more inconvenient aspects of seeing your doctor, from securing a quick appointment and a ride to the pharmacy to finding a parking space outside the clinic.

The acquisition could also allow for the integration of Amazon’s other healthcare offerings, including grocery and pharmacy.

In theory, this means Amazon could become a one-stop shop for your healthcare needs, providing primary care, health food retail and prescriptions.

Seiguer isn’t completely sold on the benefits of such a service.

“Combining food choices and medical data seems like it can ultimately only benefit patients’ health,” he says.

“However, the fact remains that the biggest cost drivers in this country are lower-income people with deadly chronic diseases,” he explains.

“These populations aren’t Amazon Prime members, they don’t shop at Whole Foods, and they won’t appreciate the convenience of bundled grocery-pharmacy-primary care subscriptions.”

The acquisition also raised questions about anti-competitive effects as well as data privacy concerns.

While an integrated service combining elements of Amazon’s other healthcare offerings may seem like a plus for some, it may be a concern for others who worry about how their sensitive medical data is being shared.

Fortunately, Seiguer says there are laws in place to protect your medical data, including the Health Insurance Portability and Accountability Act (HIPAA).

“With most health technology startups hosted on Amazon Web Services, there is no change in the scope of data that Amazon holds as a custodian,” Seguer says.

“The fact that Amazon owns these lines of business does not change the obligations of either One Medical or Amazon Web Services to comply with HIPAA.”

Amazon says data privacy fears are unfounded.

“Both One Medical and Amazon have strong policies to protect customer privacy in compliance with HIPAA and all other applicable privacy laws and regulations,” Amazon spokeswoman Angie Quenell said in a statement.

While the acquisition has the potential to improve patient access to primary care, Seiguer believes it may not be enough for the people who need it most.

He says Amazon’s health strategy lacks an approach to chronic disease management for the most expensive and vulnerable populations.

“Drugs are a critical element in the management of chronic disease, and ever-increasing drug costs will only increase if Amazon’s approach as a whole succeeds,” he says.

“Convenience in prescribing and delivery has artificially inflated the demand for drugs and led to a spike in drug prices. These price increases benefit the entire drug supply chain, including Amazon.

People with chronic conditions may also feel they benefit more from in-person visits with a regular doctor they know and trust, a convenience that could be eliminated if One Medical takes a telehealth-first approach.

Much remains to be seen about how Amazon’s acquisition of One Medical will affect healthcare in the United States.

There are concerns about the effect it could have on data privacy and rising drug costs.

On the other hand, it could mean that having 24/7 access to doctors and getting seen – and indeed referred – more quickly becomes the norm.

Fast and convenient health service will be a welcome improvement to long appointment wait times, but Seiguer says that shouldn’t come at the expense of quality patient care.

“More choices for accessing health care can only be good for the consumer experience,” he suggests.

“But healthcare is not a commodity, and there are limitations in valuing the experience of customers or ‘users’ over the quality of care.”

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