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 provider, in an all-cash deal valued at $3.9 billion. The agreement is currently awaiting regulatory approval.
The One Medical platform is offered on a membership basis and provides patients with 24/7 virtual treatment access via a telehealth app. The company also has 188 physical clinics across the United States.
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 would improve the healthcare experience with a “people-centric and technology-driven approach.”
Lindsay added that Amazon hopes to improve how 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 accessible, affordable and even enjoyable for patients, providers and payers.”
Amazon already has some skin in the health game. In 2017, the company acquired the health food chain Whole Foods, and in 2018 they announced the purchase of PillPack Inc. – an online pharmacy.
They also offer Amazon Care – a service that offers telehealth services to employees of certain companies.
In addition, Amazon Web Services, the company’s cloud computing division, offers products for healthcare and offers a healthcare accelerator for start-ups.
What does this latest acquisition mean for the healthcare sector in the US, and more specifically the patient experience?
Looking at the healthcare sector as a whole, Sebastian Seiguer, JD, CEO of Johns Hopkins-backed digital health platform emocha Health, believes the acquisition will have little impact on the status quo.
“There is no reason to believe that Amazon’s acquisition of One Medical will have any major impact on healthcare. There are thousands and thousands of healthcare providers in this country, and there are many other virtual primary care providers, such as Eden Health, Heal and PeopleOne,” he points out.
Ali Parsa, PhD, CEO of Babylon, one of One Medical’s main competitors, agrees, but believes the acquisition could lead to a “ripple effect” in how other healthcare providers approach customer care.
“Amazon has a terrible reputation for the way they manage their workforce, but an excellent reputation for the way they focus on their customers. The focus they bring to the customer will be very valuable in the healthcare system, he says.
“We can see a positive impact because other health care providers will believe that they also need to improve the patient experience.”
Like Babylon and other telehealth providers, the current One Medical 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 could make getting appointments and referrals faster and more accessible.
According to Lindsay, the merger is an opportunity to “give people back valuable time in their days.”
He suggests it will hopefully replace some of the more inconvenient aspects of seeing your doctor, from securing a quick appointment and hauling 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, that means Amazon could become a one-stop shop for your health needs, offering primary care, health food shopping and prescriptions.
Seiguer is not entirely sold on the benefits of such a service.
“Having food choices and medical data combined seems like it can ultimately only benefit the patient’s health,” he says.
“But the fact is that the highest cost drivers in this country are lower-income people with deadly chronic diseases,” he explains.
“These populations are not Amazon Prime members, they do not shop at Whole Foods, and will not value the convenience of packaged grocery-pharmacy-primary care subscriptions.”
The acquisition has also raised questions about anti-competitive effects, as well as concerns about privacy.
While an integrated service that combines elements of Amazon’s other health offerings may seem like a plus to some, it could be worrisome to others concerned about how their sensitive medical data is 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 has as a steward,” says Seiguer.
“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 privacy fears are unfounded.
“Both One Medical and Amazon have strict policies that protect customer privacy in compliance with HIPAA and all other applicable privacy laws and regulations,” Amazon spokeswoman Angie Quennell said in a statement.
Although the acquisition has the potential to improve patient access to primary care, Seiguer believes that it may fall short of those who need medical care the most.
He says an approach to managing chronic conditions for the most costly and vulnerable populations is missing from Amazon’s health strategy.
“Drugs are a critical element in the treatment of chronic diseases, and the ever-increasing cost of drugs will only increase if Amazon’s approach is largely successful,” he says.
“Prescribing and ease of delivery have artificially increased the demand for medicine and caused medicine prices to rise. These price increases benefit the entire drug supply chain, including Amazon.”
Those with chronic conditions may also feel they benefit more from in-person visits with a regular doctor they know and trust, a comfort that could be removed if One Medical takes a telehealth-first approach.
Much remains to be seen about how Amazon’s acquisition of One Medical will affect healthcare across the United States.
There are concerns about the effect it could have on privacy and the rising cost of medicines.
On the other hand, it could mean that having 24/7 access to doctors and being seen – and indeed referred – will more quickly become the norm.
A quick and convenient health service would be a welcome improvement to long waiting times for appointments, but Seiguer says it should not come at the expense of good patient care.
“More choices for accessing healthcare can only be good for the customer experience,” he surmises.
“But healthcare is not a commodity, and there are limits to which customer or ‘user’ experience is valued over the quality of care.”
