Home > IT Monitoring > Healthcare IT Monitoring > Amazon buys One Medical, subscription health services company
After Oracle’s largest acquisition completed in June, in a process valued at US$28.3 billion to acquire Cerner, a company that provides information systems for hospitals and other organizations in the health area, now it’s time for another shot from Amazon. Big Tech has just announced the purchase of One Medical for US$ 3.9 billion, the third largest acquisition – it only loses for the Whole Foods acquisition for US$ 13.7 billion and MGM for US$ 8.5 billion – and the largest in the health segment, where Amazon sees huge business opportunities.
One Medical is a network of primary care clinics that operate under a subscription model and mainly serve companies, in a similar way to the health insurance plans here, taking services to more than 700,000 users in more than 8,000 companies. From January to March, One Medical invoiced US$ 252 million, but recorded a loss of 90 million.
By joining One Medical with the purchase of online pharmacy PillPack in 2018 and the creation of the Amazon Care teleconsultation service in 2019, Amazon is establishing an ecosystem where it is able to meet customers’ needs from one end to the other. The person makes the appointment with the specialist, has the prescription online, orders and receives it at home – in a journey of very low friction. The development of medical diagnostic solutions without the patient leaving home closes the circle.
In the view of Neil Lindsay, senior vice president of Amazon Health Services, healthcare is at the top of the list of experiences in need of reinvention. There are many opportunities to improve the experience at medical appointments and exams and give people back valuable time. “By relying on One Medical’s human-centric, technology-driven approach, we believe we can and will help more people get better healthcare, when and how they need it,” explains the Amazon executive.
Amazon will acquire One Medical for $18 per share in a cash transaction valued at approximately $3.9 billion, including One Medical’s net debt. Completion of the transaction is subject to customary deal terms, regulatory and One Medical shareholder approval.
Amazon’s other previous forays into healthcare include a $1 billion deal to gain the ability to ship drugs across the United States and a venture to remake the healthcare offered by companies to their employees. Both were not very successful, according to the story.
According to an article in the New York Times, this latest acquisition will give Amazon access to more data, as One Medical has built its own electronic medical records system with 15 years of medical and health system data. Amazon’s expertise in big data analytics could be very useful in healthcare, for example to predict costs and develop drugs and treatments.
What’s more, The Washington Post (incidentally, owned by Amazon founder Jeff Bezos) points out that One Medical has an app and a website that members can use to book appointments, track medical records and renew prescriptions, plus a suite of services, such as video-on-demand health consultations available anytime. For that, they pay an annual fee of $199 – somewhat reminiscent of Amazon Prime, Amazon’s exclusive subscription benefits system, right?
Amazon is likely to run One Medical as an independently branded, brick-and-mortar subsidiary––like Whole Foods––hoping to bundle healthcare services with its Prime offering and/or create unique, in-person experiences by integrating One Medical, Whole Foods, and pharmacy services. In any scenario, Amazon is likely to walk before it runs with One Medical. By scaling the service first across its own employee base, much of it in distribution centers co-located near existing One Medical facilities, Amazon potentially could ramp into healthcare services––a market that “Big Tech” historically has failed to penetrate.
Another big name getting involved with healthcare is Google. Last week, Google Cloud announced a partnership with the Health Information Sharing and Analysis Center (Health-ISAC) as an ambassador. The company is the first and only major cloud provider to join this non-profit organisation that provides healthcare stakeholders with a community and forum to coordinate, collaborate and share vital information on physical and cyber threats and best practices.
As an ambassador partner, Google Cloud will bring experts and resources to the group, including the Threat Horizon Report and the Google Cybersecurity Action Team. The so-called Googlers will work closely with leaders in the global healthcare industry, sharing knowledge and implementing secure technologies.
“Partnering with Health-ISAC makes perfect sense, as we share the same vision that building a safe and trusted healthcare ecosystem is our collective responsibility and helps uphold the values of mutual respect and protection. This partnership should inspire other organisations with other skills and resources to join us,” says Phil Venables, Director of Security at Google Cloud.