Amazon Targets Primary Care Space With One Medical Acquisition

Amazon has announced plans to buy concierge care company One Medical for almost $4 billion, positioning the retail giant right in the middle of an ever-growing battleground for primary care.

Amazon is getting into the primary care business.

The retail giant has announced that it is acquiring One Medical, the concierge-styled primary care company with a telehealth platform and more than 125 brick-and-mortar locations scattered across the country. The deal, valued at roughly $3.9 billion, would be Amazon's third-largest acquisition, giving the company a physical footprint alongside Amazon Pharmacy and Amazon Care, a virtual care platform for businesses.

“We think healthcare is high on the list of experiences that need reinvention,” Neil Lindsay, Amazon's senior vice president of Amazon Health Services, said in a press release. “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 rushed few 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.”

“There is an immense opportunity to make the health care experience more accessible, affordable, and even enjoyable for patients, providers, and payers," added One Medical CEO Amir Dan Rubin, who will continue as CEO.

The announcement fits with the idea that primary care is becoming a hotly contested battleground, featuring competition from traditional healthcare organizations as well as telehealth companies and payers with their own provider networks and retail behemoths like Amazon, Google, Walmart and Walgreens.

All are trying to lay the groundwork for on-demand primary care services, either in person or through virtual care channels. Amazon's strategy is to make that encounter as ubiquitous as buying something on its website.

Nathan Ray, a partner in the healthcare segment of national management and technology consultant West Monroe, said the deal makes Amazon a major player in the ever-shifting healthcare market.

"Amazon continues to make forward progress towards being a broad and dynamic healthcare entity with the acquisition of One Medical, their activity here and in recent past within many of the most actively evolving areas of healthcare has shown they have an evolving strategy towards developing their role in the healthcare marketplace and now entering primary care (and risk contracting) the true center of focus and change after incrementally building relevance in DME, pharmacy, virtual care and employer health," he said in an e-mail to HealthLeaders.

"Amazon and One Medical will have some great opportunities to continue to improve on today’s technology and in particular evolving digital intelligence and engagement technologies that drive intervention, clinician effectiveness, and action based on both historic and real-time data and analytics that underpin the ability to develop and scale successful care models," he added.

Ray noted further that the deal does have some concerns.

"This move tells us both that Amazon is aware of what they lack, but also that they really may not have a grand strategy as of yet but are continuing to find value buying (particularly on the downbeat of the market here) and developing both solutions and services within the healthcare space that give them options," he said.

"The biggest questions I have are when will we begin to see more of Amazon’s signature of technology enablement, easy access, low cost and service quality begin to reveal itself within healthcare through this acquisition, and how might Amazon’s skill with those design elements yield market advantage," he added. "Primary care is a highly dynamic space with payers, providers, and healthcare services and technology organizations all focused on many of the same population health and risk attribution tools and concerns and a slow war of care models, utilization, and financial performance playing out as significant capital has entered from both private and public markets over the last 3-5 years particularly motivated by growth coming from managed care, particularly Medicare Advantage."