Retail and tech giants on Thursday Amazon The next step is to enter the field of health care, announcing the agreement Access to a Primary Care Provider a doctor A deal worth about $3.9 billion. Experts say the deal will help Amazon diversify its healthcare division, a sign of the company’s long-term entry into the space. But they believe it’s still not a real threat to the health system.
If the deal goes through, it would be Amazon’s third most expensive acquisition ever, second only to Whole Foods 2017 and MGM earlier this year.This is the company’s first major acquisition announced under CEO Andy Jassy, who has vowed to make Grow the company’s healthcare sector priority.
The deal is the latest in a growing list of moves by Amazon in the healthcare industry.These include buying pill packthe company’s online pharmacy, and emission Amazon Carethe telehealth affairs of its employer.
“This move tells us that Amazon knows what they’re lacking, but they may not have a grand strategy yet, but continue to find value buys — especially in a down market — and develop both solutions and Services within healthcare give them options,” said Nathan Ray, a partner at consulting firm West Monroe.
Michael Greeley, a partner at Flare Capital Partners, agreed.He said the bets the company made may not yield significant results in five years or so, but it was clear that Amazon was trying to “stand together” A more comprehensive healthcare business. “
Greeley noted that moving into primary care would allow Amazon to catch people at the very beginning of their healthcare journey. He said the company chose to partner with One Medical because it is the most developed of the scarce branded, independent primary care assets in the market.
Still, One Medical isn’t without its problems.In March last year, the company under fire There are reports that it lets people who are ineligible for the Covid-19 vaccine jump the line early in the vaccine rollout.Five months later, its employees trying to unionize As a response to alleged poor working conditions, poor quality of patient care and poor corporate management of the pandemic response.Plus, One Medical is still losing money — it recorded a net loss Nearly $91 million in the first quarter of this year.
Deena Shakir, a partner at Lux Capital, said One Medical’s status as a well-known early player with strong brand equity outweighed these shortcomings. She noted that she has seen many startups being advertised as “the unified healthcare of X, Y, and Z.”
While One Medical primarily makes money by charging employers, it also has a strong consumer brand and has consistently positioned itself as the “digital front door” to healthcare. That, combined with its commitment to technology (One Medical has a native EMR and user-friendly app), makes it look like a good fit for Amazon, Shakir said. She added that Iora’s piece of the pie also has a significant advantage – One Medical get Iora Health, a primary care provider for adults enrolled in Medicare, last September.
Now that Amazon has a foothold in pharmacies, grocery stores and now primary care, there are “interesting synergies” to consider, said Alyssa Jaffee, a partner at 7wire Ventures. That could make Amazon a key player in healthcare, given the growing importance of social determinants of health, she said.
She sees the deal as further validation of Big Tech’s role in healthcare. But this should not be a direct source of anxiety in the health system. The type of care Amazon offers is transactional—it’s not vertical, and certainly not acute. Jaffee said the deal simply pushes the health system to make it more convenient for patients.
“The role of provider organizations is still very strong because these are multidisciplinary facilities that treat all kinds of people,” Jaffe said. “While this is an interesting acquisition, we must remember that One Medical currently serves less than a portion of the U.S. population. The health system needs to exist. That said, the stakes are higher now.”
The deal could also push retail companies like CVS and Walgreens Strengthen their primary care services. With Amazon now entering the market, Shakir said, “a delightful consumer experience” will become a key must-have, not a icing on the cake. She also said the chains may choose to focus more on the broader market beyond high-income urban professionals — especially in areas with large populations covered by Medicaid.
CVS and Walgreens did not respond to requests for comment on the deal, as did One Medical and Amazon.
One of One Medical’s competitors said they saw the deal as a net positive because it brought to light the value of primary care, although some say the end result could mean consumers pay more for convenience.
Fay Rotenberg, CEO of virtual primary care startup Firefly Health, said she believes the deal is focused on convenience and may not address the value issue. While the deal could be very successful in providing convenient care to a small segment of the population, she believes that care could be expensive.
In contrast, Rotenberg sees Firefly Health as a company focused on reducing costs and serving a larger population rather than improving convenience.
The jury is out on the effectiveness of this merger in improving outcomes and reducing costs for a while, but one thing is clear. As this move moves into primary care, Amazon is serious about creating an integrated health care unit — in stark contrast to Google, shut down its Google Health divisionWhat excites experts most about the deal is that it allows the company to integrate its livelihoods — tech support, convenience and low cost — into primary care to increase patient access across the country.
Photos: Flickr, Cerillion Skyline
