Amazon to Buy Primary Care Provider One Medical for $3.9B

An estimated $3.9 billion is being spent by Amazon to acquire One Medical, a primary care organization.

On Thursday, the Seattle-based online retail giant announced that it would acquire One Medical for $18 per share in cash. Just like Amazon’s $13.7 billion purchase of Whole Foods in 2017 and its $8.5 billion acquisition of Hollywood studio MGM earlier this year, this is one of Amazon’s largest acquisitions to date.

Must read-

One Medical is a San Francisco-based membership service that provides both online and in-person medical care from the same parent company, 1Life Healthcare, Inc. It also collaborates with over 8,000 businesses to offer its health benefits to its employees.

Amazon Is Ready to Buy One Medical

According to its first-quarter earnings report, One Medical had about 767,000 members and 188 medical offices in 25 markets as of March. The company also reported a net loss of $90.9 million on revenue of $254.1 million. The debt of One Medical is included in the total deal value announced on Thursday.

According to Amazon Health Services v.p. Neil Lindsay’s statement, the acquisition is meant to revolutionize the health care “experience.” “appointments, trips to the pharmacy, and the like.

Demand for telemedicine and other forms of virtual health care during the COVID-19 pandemic surged. Health care providers and those who foot the bill, such as employers and insurers, are putting in more effort to ensure patients have easy access to the care they need and that they follow doctors’ orders.

Amazon Buy Primary Care Provider One Medical $3.9B
Amazon Buy Primary Care Provider One Medical $3.9B

The cost of providing health insurance to employees has skyrocketed in recent years, far outpacing wage growth and inflation. Businesses and insurance companies hope that by facilitating patients’ access to primary care, they can cut down on the need for expensive hospitalizations and the progression of chronic diseases like diabetes.

The acquisition furthers Amazon’s push into the health care services market, another sector it has targeted for disruption.

After spending $750 million to acquire PillPack in 2018, the company launched its own online pharmacy, where customers could place orders for new prescriptions and have them delivered to their homes within a few days. Amazon Care, its telemedicine service, has been available to businesses across the country since last year. It has been aiming to expand its employer clientele, and this new agreement should help it do that, say industry experts.

“They will have a much bigger footprint in this market immediately,” said Andrew Ching, a Johns Hopkins University professor specializing in the health business.

It comes as no surprise that Amazon is making inroads into the healthcare industry, according to Neil Saunders, managing director at GlobalData Retail. As the company’s retail and cloud-computing businesses mature, it is exploring new growth opportunities, as stated by Saunders. The health care industry is complicated but highly lucrative, making it a promising career path. However, getting noticed can be challenging.

Saunders said in a statement, “Amazon will need to work extremely hard and be extremely innovative if it is to do more than shake things up a little at the margins.” As of right now, it seems doubtful that Amazon will be able to pull this off based on their track record. While it has helped expand the online pharmacy industry, it has not completely transformed the sector. Nor did the company’s largest ever deal, the purchase of Whole Foods, cause any major upheaval.

Amazon also worked briefly with JPMorgan and Berkshire Hathaway to lower health care costs. Haven was founded as a separate company by the aforementioned three corporate giants to enhance the quality of healthcare provided to their employees while also finding more cost-effective solutions to these problems. CEO Atul Gawande is a well-known author and surgeon; the company was founded in 2018. In 2021, however, it quietly faded away.

As a result of their market dominance, lawmakers are keeping a close eye on Amazon and other Big Tech companies, which is why this latest deal is so timely. U.S. regulators were petitioned to block the acquisition shortly after the company announced it on Thursday, with critics citing privacy concerns and the company’s desire to expand into new markets.

“Amazon’s takeover of One Medical is the latest shot in a terrifying new stage in the business model of the world’s largest corporations,” said Barry Lynn, the executive director of Open Markets Institute, an organization that advocates for stricter antitrust regulation. “The deal will expand Amazon’s ability to collect the most intimate and personal of information about individuals, in order to track, target, manipulate, and exploit people in ever more intrusive ways.”

I hope you found the information presented above to be of use. You can also look through our news section, where we normally cover all of the most recent news and happenings around the world. Visit our website if you’d like to learn more about this topic.

You might also like
Leave A Reply

Your email address will not be published.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More