Amazon’s acquisition of One Medical brings it closer to the healthcare giant

Amazon’s acquisition of One Medical brings it closer to the healthcare giant

Amazon continues its expansion into healthcare, announced on Thursday that it will buy One Medical, a “technological” combination of primary care and telehealth, for nearly $4 billion. That makes this one of Amazon’s biggest acquisitions to date and indicates that the e-commerce giant is very serious about its plans for consumer-facing healthcare. But with increasing scrutiny over Amazon’s antitrust issues, it’s unclear whether the merger will pass through regulators — and some lawmakers are criticizing the deal.

“I think it’s about getting the consumer experience of shopping for health, which has been talked about for decades, but no one has done it yet,” Chrissy Farr, a health tech investor, told Recode. “Where I think it will be the consumer health player.”

In the United States, health care can be expensive and difficult to obtain — and the quality doesn’t always match the price. It’s possible that tech companies like Amazon have an answer to what ails the industry that should fix what ails us. It’s also possible that their moves in that sector will give them even more power over us and another industry to dominate. And while antitrust regulators are concerned about Big Tech’s growing power and are likely to scrutinize the deal, they may not be able to do much to stop it.

Lawmakers known for their antitrust views criticized the deal.

“Amazon’s purchase of a network of primary care providers should be of deep concern to American families and antitrust regulators,” said Sen. Elizabeth Warren (D-MA). “Amazon already has too much economic power, a terrible record with workers and alarmingly little clinical experience, raising big questions about how this deal could affect consumer prices and health care choices.”

Senator Amy Klobuchar (D-MN), who is trying to get a vote on her anti-self-preference bill, which would prohibit companies like Amazon from favoring their products over those sold by others on Amazon’s platforms, has been subpoenaed by the Federal Trade Commission (FTC). to explore the deal in a letter to the agency.

“This proposed transaction raises questions about potential anticompetitive effects related to the pharmacy services business that Amazon already owns and the preference for suppliers that offer other services through Amazon,” Klobuchar said.

Amazon has been pushing into the healthcare space for years. That bought PillPack, an online pharmacy, in 2018 and then launched Amazon Pharmacy in 2020. Prime members get special discounts on drugs not covered by their insurance. In recent years, Amazon has moved into diagnostics and created its own Covid-19 test (which was recently discontinued). The company is launched Amazon Care, a primary care service, in 2019 for some of its employees before rolling it out to other companies as a workplace benefit earlier this year. Amazon even branched out medical devices and medical wearablesand behind the scenes he also invests in technology development that drives the industry.

So, in just a few short years, Amazon owns (or will own) parts of almost every aspect of the healthcare industry—seemingly everything except hospitals and health insurance.

One Medical is one of several technology-focused telehealth, or virtual care, healthcare companies that have gained traction during the pandemic, when physical visits have been much harder to come by. For up to $199 a year, patients get 24/7 virtual access to providers through a telehealth app, though it’s worth emphasizing that this service is meant to supplement your regular health insurance, not replace it. One Medical also has physical offices in many major cities in the United States. It also made a place for itself as employer privilege for companies including Google and Yelp, although membership is open to anyone.

To non-patients, One Medical is perhaps best known for this accusations that he gave Covid-19 vaccines to people who were not entitled to them at a time when vaccine supplies were in high demand and in short supply. (One doctor denied this.)

Farr also noted that One Medical has a lot of data (the company boasts 767,000 members in its latest earnings report) and owns Iora Health, a primary care service for Medicare patients. One Medical will also bring to Amazon’s portfolio its brick-and-mortar clinics — something Amazon Care lacks — that Amazon believes are essential to the growth of its healthcare ambitions. Just look at how the purchase of Whole Foods, which remains Amazon’s biggest acquisition, gave the company a bigger physical presence.

Amazon’s critics were not thrilled with the news. Stacy Mitchell, co-executive director of the Institute for Local Reliance, describes the proposed acquisition as “Amazon’s latest move to expand its tentacles into health care.”

“As with other moves in this sector, the goal is to mediate healthcare delivery by becoming an intermediary between patients, doctors and insurers,” explained Mitchell. “This is exactly what Amazon has done in other major sectors, including e-commerce, cloud services and voice.”

Again, the deal is pending regulatory approval, which means getting approval from the FTC, which is chaired by Amazon’s critic Lina Khan. During her tenure, the FTC has already dealt with one major Amazon merger: the purchase of MGM Studios, which closed last March after the FTC did nothing to block it. At the time, however, the agency was missing a key vote for a Democratic commissioner. That now there is that commissarand may challenge the MGM merger if not this one.

Mitchell and Krista Brown, a senior policy analyst at the American Economic Liberties Project, an antitrust advocacy group, both said they hope and believe the merger will be challenged by regulators.

“The acquisition of One Medical will solidify Amazon’s growing presence in the healthcare industry, undermining competition,” Brown said. “Amazon has no business being a major player in healthcare, and regulators should block this $4 billion deal to ensure it doesn’t become one.”

But some antitrust experts weren’t so sure regulators would have a case to stop the deal, arguing that Amazon is too new and not a big enough player in the health care industry.

“Although Amazon is currently in the spotlight of antitrust agencies, I would expect this deal to go through since this is a relatively new market for the company,” Kellie Lerner, co-chair of the Antitrust and Trade Regulation Group at Robins Kaplan LLP, said.

But if the agencies viewed the acquisition through a “traditional antitrust lens,” the merger shouldn’t be a problem, according to Abiel Garcia, an antitrust attorney at Kesselman Brantly Stockinger. He added that there could be some problems if enforcers raise concerns about things like collecting patient data.

Klobučar certainly made that point in her letter to the FTC, saying, “I also ask that the FTC consider the role of data, including as a potential barrier to entry, given that this proposed deal could result in the accumulation of highly sensitive personal health information in the hands of a company.” which is already using data.”

In a press release announcing the merger, Amazon Health Services senior vice president Neil Lindsay pitched the acquisition as a way to make people’s lives easier and the health care experience better, with a “human and technology-centric approach.”

Whether that approach will improve healthcare remains to be seen, but it will certainly be in line with how Amazon has taken over everything else.

“It’s a digital front door,” Farr said. “A lot of the way you access care is through a health plan or provider. Amazon could be a one-stop shop for that.”

Update, July 22, 9:30 a.m.: This story has been updated to include statements from Senators Klobuchar and Warren.



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